China's Development and the Construction of the Community with a Shared Future for Mankind (Research Series on the Chinese Dream and China’s Development Path) [1st ed. 2023] 9811974225, 9789811974229

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Research Series on the Chinese Dream and China’s Development Path

Linggui Wang   Editor

China’s Development and the Construction of the Community with a Shared Future for Mankind

Research Series on the Chinese Dream and China’s Development Path Series Editors Yang Li, Chinese Academy of Social Sciences, Beijing, China Peilin Li, Chinese Academy of Social Sciences, Beijing, China

Drawing on a large body of empirical studies done over the last two decades, this Series provides its readers with in-depth analyses of the past and present and forecasts for the future course of China’s development. It contains the latest research results made by members of the Chinese Academy of Social Sciences. This series is an invaluable companion to every researcher who is trying to gain a deeper understanding of the development model, path and experience unique to China. Thanks to the adoption of Socialism with Chinese characteristics, and the implementation of comprehensive reform and opening-up, China has made tremendous achievements in areas such as political reform, economic development, and social construction, and is making great strides towards the realization of the Chinese dream of national rejuvenation. In addition to presenting a detailed account of many of these achievements, the authors also discuss what lessons other countries can learn from China’s experience. Project Director Shouguang Xie, President, Social Sciences Academic Press Academic Advisors Fang Cai, Peiyong Gao, Lin Li, Qiang Li, Huaide Ma, Jiahua Pan, Changhong Pei, Ye Qi, Lei Wang, Ming Wang, Yuyan Zhang, Yongnian Zheng, Hong Zhou

Linggui Wang Editor

China’s Development and the Construction of the Community with a Shared Future for Mankind

Editor Linggui Wang Chinese Academy of Social Sciences Beijing, China With Contribution by Malcolm Thompson Vancouver, Canada

ISSN 2363-6866 ISSN 2363-6874 (electronic) Research Series on the Chinese Dream and China’s Development Path ISBN 978-981-19-7422-9 ISBN 978-981-19-7423-6 (eBook) https://doi.org/10.1007/978-981-19-7423-6 Jointly published with Social Sciences Academic Press The print edition is not for sale in China Mainland. Customers from China Mainland please order the print book from: Social Sciences Academic Press. © Social Sciences Academic Press 2023 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publishers, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publishers nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publishers remain neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Singapore Pte Ltd. The registered company address is: 152 Beach Road, #21-01/04 Gateway East, Singapore 189721, Singapore

Series Preface

Since China’s reform and opening began in 1978, the country has come a long way on the path of socialism with Chinese characteristics, under the leadership of the Communist Party of China. Over 30 years of reform, efforts and sustained spectacular economic growth have turned China into the world’s second-largest economy and wrought many profound changes in the Chinese society. These historically significant developments have been garnering increasing attention from scholars, governments, and the general public alike around the world since the 1990s, when the newest wave of China studies began to gather steam. Some of the hottest topics have included the so-called China miracle, Chinese phenomenon, Chinese experience, Chinese path, and the Chinese model. Homegrown researchers have soon followed suit. Already hugely productive, this vibrant field is putting out a large number of books each year, with Social Sciences Academic Press alone having published hundreds of titles on a wide range of subjects. Because most of these books have been written and published in Chinese; however, readership has been limited outside China—even among many who study China—for whom English is still the lingua franca. This language barrier has been an impediment to efforts by academia, business communities, and policy-makers in other countries to form a thorough understanding of contemporary China, of what is distinct about China’s past and present may mean not only for her future but also for the future of the world. The need to remove such an impediment is both real and urgent, and the Research Series on the Chinese Dream and China’s Development Path is my answer to the call. This series features some of the most notable achievements from the last 20 years by scholars in China in a variety of research topics related to reform and opening. They include both theoretical explorations and empirical studies and cover economy, society, politics, law, culture, and ecology, the six areas in which reform and opening policies have had the deepest impact and farthest-reaching consequences for the country. Authors for the series have also tried to articulate their visions of the “Chinese Dream” and how the country can realize it in these fields and beyond. All of the editors and authors for the Research Series on the Chinese Dream and China’s Development Path are both longtime students of reform and opening and v

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recognized authorities in their respective academic fields. Their credentials and expertise lend credibility to these books, each of which having been subject to a rigorous peer-review process for inclusion in the series. As part of the Reform and Development Program under the State Administration of Press, Publication, Radio, Film, and Television of the People’s Republic of China, the series is published by Springer, a Germany-based academic publisher of international repute, and distributed overseas. I am confident that it will help fill a lacuna in studies of China in the era of reform and opening. Shouguang Xie

Preface

On November 5 to 6, 2019, the Second Hongqiao International Economic Sub Forum with the theme of “China’s 70-Year Development and the Building of a Community with a Shared Future for Mankind”, which was hosted by the Information Office of the State Council of China and organized by the Chinese Academy of Social Sciences, took place in Shanghai. More than 400 members from think tanks and the media from more than 100 countries and regions gathered together to study the concept and experience of 70 years of China’s development and exchange their opinions on China’s responsibility and actions in creating a community with a shared future of mankind. The participants of the meeting agreed that China holding the second International Import Expo has fully demonstrated its consistent position in supporting the Multilateral Trading System and promoting the free trade. In President Xi Jinping’s keynote speech during the opening ceremony, he offered three suggestions on building the world economy together and announced measures to expand opening up. It shows China’s determination and confidence in deepening economic globalization and shouldering responsibility to build a community with a shared future with other countries. It demonstrates that China is willing to work with the international community. Over the past seventy years, China has achieved all-round development based on its national conditions, showing that many developing countries can explore a diversified modern path based on their own histories, cultures, and national conditions. China is actively taking part in economic globalization, and bringing opportunities for economic growth. China is playing an increasingly important role in maintaining world peace and pushing forward global governance reform. The concept of “a community with a shared future” has revealed the common law of interdependence of nations and common destiny of mankind. Both think tanks and the media should make full use of their roles, promoting peace and development, contributing to the win-win cooperation, and making a contribution to building “a community with a shared future for mankind” with wisdom and strength. At the end of the two-day sub-forum, a Shanghai Consensus was reached in the form of a document titled “China’s 70-Year Development and the Building of a Community of a Shared Future for Mankind”. It stressed that the only way to face vii

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the various challenges brought by unilateralism, protectionism, and hegemonism is to be open and inclusive and to engage in win-win cooperation. China has proposed the concept of building “a community with a shared future for mankind”, which brings partners together to address global challenges and to pursue sustainable human development. The consensus pointed out that during the past 70 years, the Chinese people have realized good lives for themselves with their effort and knowledge, turned what was once a closed and backward country into the world’s second-largest economy, and achieved all-round development. The development practice and experience of China have created a new model and choice for vast number of developing countries who are also pursuing modernization. With the proposed One Belt One Road Initiative (OBOR), China is set to contribute even more to the interconnectivity among countries in areas such as investment and trade, and mutual cooperation among different cultures and systems. The positive interaction between China and the rest of the world will bring more opportunities to all. The concept of building “a community with a shared future for mankind” that China has put forward emphasizes the importance of countries standing together through thick and thin, of sharing a common destiny, of strengthening communications and discussions, or building solidarity and mutual trust, of protecting the open world economy, or promoting an open, inclusive, beneficial, balanced, and win-win new economy, and facilitating the common prosperity and development of mankind. The consensus calls for think tanks and the media in every country to take this forum as an opportunity, to enlarge the communication platform, to build cooperation mechanisms, and to conduct boarder, and more in-depth dialogues and discussions on development and governance issues related to the destiny of mankind. It also aims to promote the exchange among governments, and mutual learning among different civilizations, and contribute wisdom and strength needed to build a community with a shared future. From the perspective of their own country, the participants shared their views on world order, their understanding and interpretation of how to promote the construction of a community with a shared future for mankind, offered suggestions for working together on the Belt and Road Initiative (BRI) and for learning from other civilizations. We can see that the world has much to learn from the Chinese model and has high expectations for what it can deliver. The world is looking forward for more interactions with China. It offers a blueprint for multilateral relations with China as the world works together toward sustainable development. The presentations at the meeting included both grand narratives and microscopic analysis and opinions of specific issues. There capture deep concerns for the development of global economy and high expectations for what China can do for the world in the future. These insights from people from different ethnic, linguistic, and cultural backgrounds are a powerful voice in the history of globalization, and they drive home the point that China and the rest of the world are one, such that neither can do well if the other does not. Forum attendants spoke highly of President Xi Jinping’s keynote speech at the opening ceremony. All are agreed that no country can solve the problems facing the world on their own. Every country should commit to the idea that they are part of mankind and not place its own narrow interests above those of all of mankind. We should be open-minded, fully engage in the international market, promote sharing,

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cooperation, economic globalization, and remove barriers. We are able to distill the following common themes covered by the presentations given at the sub-forum. Firstly, the economic integration is the global trend, and building a more open and cooperative world economy is the only way to solve the challenges facing the world. Currently, as the global value chains and supply chains become more integrated, interdependence among economies has deepened. When we encounter difficulties and obstacles, we must confront them through negotiation and cooperation, while treating each other as equals. So, we must stay committed to being open, development, and cooperation and communication. We must hold each other’s hands, instead of abandoning others; we must tear down walls, rather than building them; and we must stand against trade protectionism, unilateralism, and work to reduce barriers. Secondly, the new round of scientific and technological revolution and industrial transformation has made a major breakthrough. Innovation and development are the only feasible path to sustainable development of the world economy. Countries should strengthen cooperation in innovation, promote the deep integration of science and technology, increase the sharing of innovation results, strive to break down barriers that restrict the flow knowledge, technology, and talent, provide technological and communications support to enterprises, and strengthen the protection of intellectual property rights. Thirdly, we should build an open and a sharing-based world economy by seeking inclusive and mutually beneficial development prospects and maintaining the international order based on the mission and principles of UN Charter. We must adhere to the core values and basic principles of multilateral trading system and promote trade and investment liberalization. We should implement the United Nations 2030 Agenda for Sustainable Development, increase support for the least developed countries, and make sure all can benefit from the fruits of development. Fourthly, China will open its doors wider than ever and generate more opportunities for the entire world. At the Fourth Plenary Session of the 19th Central Committee of the Communist Party of China, decisions on several major issues were passed, including upholding and improving the socialist system with Chinese characteristics, advancing the modernization of the national governance system and governance capabilities, and deepening reforms and expanding opening up. Clearly, China is committed to the policies of reform and opening and of innovation. China has a population of nearly 1.4 billion, the largest middle-income country in the world, a huge market with great potential and unlimited opportunities for the future. On October 24, 2019, the World Bank released the “Doing Business 2020 Report”. China’s ranking in terms of business environment rose from 46th to 31st, up by 15 places. This is testament to the progress China has made in improving marketization, rule of law, business environment, and market access. China will continue to do more to facilitate investment and strengthen enforcement of intellectual property rights laws. At the end of October 2019, China had signed 197 “OBOR” cooperation documents with 137 countries and 30 international organizations. This shows China’s determination to continue to engage in extensive consultation, collaboration, and benefits sharing and pursue openness, greenness, and integrity. The Former Serbian President Tomislav Nikoli´c said all those who have witnessed the development of modern China should

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feel proud of such achievements. The “OBOR” initiative proposed by President Xi Jinping fully respects the diversity of the various regions and civilizations and truly embodies the concept of mutual benefits and win-win. China is implementing the innovation-driven strategies in accordance with a new development philosophy to promote transformation and structural adjustment. Fifthly, China’s development is part of the progress of mankind. Xie Fuzhan, President of the Chinese Academy of Social Sciences, pointed out at the forum that the Communist Party of China has led the Chinese people to blaze a trail with its development of socialism with Chinese characteristics. This has enabled China to catch up with developed countries. Its successful experience in modernization offers a Chinese solutions to many of mankind’s problems with development. The former Deputy Prime Minister of Thailand and Chairman of the Thai-Chinese Cultural Promotion Committee, Pinit Jarusombat, believes that in just 70 years, Chinese people’s lives have undergone dramatic changes. Not only has China achieved success in economic development and poverty alleviation, but it has also paid close attention to the development of technology and innovation. This meets the needs of the moment. China’s development not only benefits the Chinese people, but it has also brought opportunities to other countries in the world. The director of the Institute of World Economy and International Relations of the Russian Academy of Sciences Feodor Voitolovsky believes the rapid growth of developing countries has created new opportunities for transnational trade and investment. This has become a major force driving economic globalization. This also accelerates the changes of global governance. Former Czech Prime Minister Jiˇrí Paroubek said that China has made world-renowned development achievements in economic and social aspects. In the recent years, China has continued to open up further and to reduce restrictions on foreign investment, creating greater access to the Chinese market. China’s “OBOR” initiative calls for increasing trade, improving basic infrastructure in developing countries, strengthening international cooperation, and promoting economic growth in participating countries. It has become the most ambitious aid and infrastructure construction program in the world ever. It is China’s great contribution to the world. The British scholar Martin Jacques stated that the history of Chinese civilization has shown that civilization is diverse, and modernization is pluralistic rather than singular. The Western path is not the only choice. Fan Jinshi, Honorary Dean of the Dunhuang Academy, has stated that only by absorbing and learning from other cultures, can any local culture develop and prosper. This is the Chinese wisdom that the ancient Dunhuang Mogao Grottos brought to the concept of building a community with a shared future. Under the careful guidance of Xie Fuzhan, Chair of the national think tank Xie Fuzhan and Chief Expert Cai Fang, with the hard work from other colleagues, all the presentations have been compiled into the two-volume book China’s 70-Year Development and the Construction of the Community with a Shared Future for Mankind.

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This book will be valuable to readers who are interested in learning about China and its relationships to the rest of the world. It also invites reader to think more deeply about the issues discussed by the speakers. We look forward to seeing more think tanks and media join us in telling good stories about China and in making the case for the significance of a community with shared future for mankind. March 2022

Linggui Wang Senior Research Fellow, Chinese Academy of Social Sciences (CASS) Professor, University of Chinese Academy of Social Sciences

Acknowledgments

The Parallel Session of China’s 70-Year Development and the Building of a Community with a Shared Future for Mankind of the 2nd Hongqiao International Economic Forum organized by Chinese Academy of Social Sciences was held in Shanghai, People’s Republic of China, on November 5–7, 2019. With the direct and strong support from Prof. Xie Fuzhan, President of the Chinese Academy of Social Sciences and Prof. Cai Fang, Former Vice President of Chinese Academy of Social Sciences, the conference staff worked diligently from the beginning to the end of the Parallel Session to make sure everything went smoothly. I would like to express my heartfelt thanks to each and every one of them. They are Ye Yingfei, He Yafei, Li Liting, Lv Jinhua, Ren Zhijiao, Guo Jinfeng, Zhang Chi, Zhao Lijuan, Zhao Li, Zhu Hongli, Jing Feng, An Guoqiang, Cheng Gong, Dong Peng, Gao Zihua, Hu Shengwen, Kang Liya, Liu Sitong, Ma Yuying, Song Jian, Wang Jian, Wang Weiqi, Sun Bin, Li Hongxia, Han Tongfei, Wang Yuan, Du Juan, He Huiling, Li Wei, Ma Xiuyu, Qi Xiaoyu, Zhu Weiwei, Jiang Xinmin, Zhu Yinxi, Wang Binbin, Pan Song, and Feng Beijing. In addition, Wang Chutian, Editor of Xinhua New Media Center, was specially invited to edit and proofread the manuscript. Of course, none of this would have been possible without the authors from over the 200 countries and international organizations. I thank them for bringing their knowledge, insights, and wisdom to the Parallel Session and for making their presentations available to a broader audience both within China and beyond. Finally, we are grateful to the staff at Social Sciences Academic Press for shepherding this project to completion. March 2022

Linggui Wang Senior Research Fellow, Chinese Academy of Social Sciences (CASS) Professor, University of Chinese Academy of Social Sciences

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Contents

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A Community with a Shared Future for Mankind as a New Paradigm to Promote World Development . . . . . . . . . . . . . . . . . . . . . . Linggui Wang

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Part I Country-Specific Views 2

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“China’s 70-Year Development and the Building of a Community with a Shared Future for Mankind”: A Serbian Perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tomislav Nikoli´c “China’s 70-Year Development and the Building of a Community with a Shared Future for Mankind”: A Croatian Perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Stjepan Mesic “China’s 70-Year Development and the Building of a Community with a Shared Future for Mankind”: The Czech Perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Jiˇrí Paroubek “China’s 70-Year Development and the Building of a Community with a Shared Future for Mankind”: Thailand’s Perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Bhokin Bhalakula “China’s 70-Year Development and the Building of a Community with a Shared Future for Mankind”: An Afghan Perspective (I) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S. Sadat Mansoor Naderi

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“China’s 70-Year Development and the Building of a Community with a Shared Future for Mankind”: The United Kingdom Perspective . . . . . . . . . . . . . . . . Martin Jacques “China’s 70-Year Development and the Building of a Community with a Shared Future for Mankind”: A Bulgarian Perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Zahari Mihailov Zahariev “China’s 70-Year Development and the Building of a Community with a Shared Future for Mankind”: The Shanghai Cooperation Organization (SCO) Perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Vladimir Zakharov “China’s 70-Year Development and the Construction of the Community with a Shared Future for Mankind”: The Perspective of the Baha’i International Community United Nations Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Bani Dugal “China’s 70-Year Development and the Building of a Community with a Shared Future for Mankind”: An Afghan Perspective (II) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mohammad Yousuf Rahnaward “China’s 70-Year Development and the Building of a Community with Shared Future for Mankind”: An Afghan Perspective (III) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mohammad Jan Alkoza and Mohammad Khan Wardak “China’s 70-Year Development and the Building of a Community with a Shared Future for Mankind”: A Turkish Perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Aydin Nurhan “China’s 70-Year Development and the Building of a Community with Shared Future for Mankind”: Environmental Challenges Faced by Big Cities in China and Policy Responses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Vicente Ugalde Saldaña “China’s 70-Year Development and the Building of a Community with a Shared Future for Mankind”: A Uruguayan Perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Washington Ruben Duran Correa

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“China’s 70-Year Development and the Building of a Community with a Shared Future for Mankind”: A Nigerian Perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Charles Okechukwu Onunaiju Overview: China’s 70-Year Development and the Building of a Community with a Shared Future for Mankind . . . . . . . . . . . . . Panharith Long “China’s 70-Year Development and the Building of a Community with a Shared Future for Mankind”: A Pakistani Perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Syed Asif Salahuddin

Part II 19

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World Order

“China’s 70-Year Development and the Building of a Community with a Shared Future for Mankind”: Spain’s Perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . José Luis Centella Gome Consultation, Contribution, Shared Benefits, and Global Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fazel Karim Fazel

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In Search of an Alternative to the Failed Global Neoliberal Order . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103 Volodymyr Sidenko

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Building Power and Justice for a New World . . . . . . . . . . . . . . . . . . . . 111 Süleyman Sensoy

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The Domestic and International Features of the Current Multipolar Trend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121 Ali Shah

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Geoeconomics and the Contemporary Power Shift in the International System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129 Gyula Attila Csurgai

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Geopolitical Shifts and Great Power Responsibility . . . . . . . . . . . . . . 139 Robert de Wijk

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Confronting the Crises of Global Governance . . . . . . . . . . . . . . . . . . . 147 Sohair Abdalsalam Ibraheem Saber

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“Tian Xia”—China’s Concept of International Order . . . . . . . . . . . 153 Shiu Sin Por

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A New Paradigm for a Changing World Order . . . . . . . . . . . . . . . . . . 161 Irina Semenenko

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The Emergence of Modernization in the West and the Question of Its Applicability Elsewhere . . . . . . . . . . . . . . . . . 165 Shyamon Sapumal Alwis Jayasinghe

Part III Community with a Shared Future for Mankind 30

Two Great Projects in the Framework of the Concept of the Community with a Shared Future for Mankind . . . . . . . . . . . 175 Rexhep Meidani

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Sino Shift and Path to Influence Under the New International Economic Order: How Should China Pave the Way for a Community of Shared Future? . . . . . . . . . . . . . . . . . . . . . . . . . . . 181 Oh Seok Hyun

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Creating a Community with a Shared Vision for the Future of Mankind . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189 Jerrie Ueberle

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A Community with a Shared Future for Mankind: New Interaction Between China and the World . . . . . . . . . . . . . . . . . . . . . . 197 Javier Manuel Paulinich Velarde

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Addressing Non-tariff Measures for Building a Community with a Shared Future for Mankind . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205 Alexey Kravchenko

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The Community with a Shared Future for Mankind: New Interaction Between China and the World . . . . . . . . . . . . . . . . . . . . . . 221 Rukhsana Qamber

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Our History and National Experiences Must Be the Foundation of Efforts to “Constructing a Shared Future for Mankind” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229 Vasudevan Swaminathan Gounden

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Soft Skills Development for Trust as the Next Frontier in the Construction of the Community with a Shared Future for Mankind . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 237 Ole Doering

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China, Israel, and the Community of Shared Future . . . . . . . . . . . . . 245 Barukh Binah

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Building a Community with a Shared Future for Mankind . . . . . . . 251 Arian Starova

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Building a Community with a Shared Future for Mankind: Is There a Blueprint? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 257 Plamen Ilarionov Pantev

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Towards a Community with a Shared Future for Mankind: Contributions of the African Economic Research Consortium (AERC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 265 Njuguna Ndung’u

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Community with Shared Future for Mankind from the Perspective of Buddism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 273 Kapila Abhayawansa Randunu Pathirannehelage

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A New Scientific Paradigm as a Key to Building a Community with a Common Future for Humanity . . . . . . . . . . . . . . . . . . . . . . . . . . 281 Valentina Bondarenko

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The Construction of a Community with a Shared Future for Mankind, Chinese Investment in Africa, the Maghreb, and Tunisia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 289 Nizar Ben Salah

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Building Community Between China and Latin America and the Caribbean as a Key to Social Development . . . . . . . . . . . . . . 297 Esteban Zolezzi

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The Construction of the Community of Human Destiny and the International Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 307 Eduardo Daniel Oviedo

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Cooperation of the International Community for a Common Future of Mankind . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 315 Rakez Ali Mahmoud Al Zareer

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Construction of the Community with a Shared Future for Mankind: Sustainable Development as a Global Governance Challenge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341 Ernesto Velasco Sanchez

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Constructing “a Community with a Shared Future for Mankind” on Crumbling Pillars . . . . . . . . . . . . . . . . . . . . . . . . . . . . 347 Kristian Mehlsen and Mathias Behn Bjørnhof

Part IV The Belt and Road Initiative 50

Economic Effects of Belt and Road Initiative: The Case of Southern Caucasus and Central Asia Countries . . . . . . . . . . . . . . 357 Vugar Bayramov, Gulmira Safarova, and Musa Garajayev

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Global Competitiveness in Observation: A Belt and Road versus Non-belt and Road Regions Comparison . . . . . . . . . . . . . . . . . 367 Wan Tai Victor Zheng and Guo Hua

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17 + 1 Regional Format Reviewed in the Central and Eastern Europe (CEE) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 383 Rudolf Fürst

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“Belt and Road” Initiative Perspectives for Central Asian Countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 391 Sharofiddin Nazarov

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What China’s Belt and Road Initiative Means for the Republic of Tajikistan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 395 Mavzuna Karimova

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BRI and Beyond: China and the (Re)emergence of the Eurasian Order: Challenges and Opportunities . . . . . . . . . . . 403 Jacopo Maria Pepe

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Making the Most of China’s Belt and Road Initiative (BRI) in Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 413 Emmanuel Nnadozie

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Belt and Road Initiative, International Cooperation, and Implications for Less Developed Regions . . . . . . . . . . . . . . . . . . . 423 Carola Beatriz Ramon

Part V

Civilization Exchange and Mutual Learning

58

Mutual Exchanges of Asian Civilizations and a Community of Shared Future for Mankind: The View from Armenia . . . . . . . . . 433 Raffi K. Hovannisian

59

Openness, Cooperation, and Dialogue of Civilizations . . . . . . . . . . . 439 Hisham Mohamed Elzimaity

60

The Globalization of Virtue: Reflections on Confucius and Aristotle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 447 Christopher George Vasillopulos

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Silk Road Civilization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 455 Askhat Kessikbayev

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Professional Journalistic Education in the Transition to Digitalization: The Experience of Uzbekistan . . . . . . . . . . . . . . . . . 459 Alisher Metyakubov

63

Mankind Sharing the Future in Community: The Case for Open and Practical Civilizational Dialogue . . . . . . . . . . . . . . . . . . 467 Oh Ei Sun

64

Cultural Pluralism in Asian Buddhism for Peace and Harmony . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 471 Wimal Hewamanage

Contents

Part VI

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Chinese Model

65

70th Anniversary of People’s Republic of China: The View from Belarus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 483 Anatoli Tozik

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70 Years of China’s Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 487 Sundar Nath Bhattarai

67

Changing the World, and Its Challenges: Does the Chinese Model Offer an Opportunity? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 491 Khalid Rahman

68

The Secret of China’s Success Model “How China Should Be Looked At” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 503 Helga Zepp LaRouche

69

Development that Leaves No One Behind: Learning from China’s Transformative Experience . . . . . . . . . . . . . . . . . . . . . . . 509 Syed Munir Khasru

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China’s 70-Year Development Approaches to Shared Prosperity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 517 Zaidi Sattar

71

Chinese Economic Growth: A Critical Look . . . . . . . . . . . . . . . . . . . . 527 Aly D. Coulibaly

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Multi-dimensional Modernisation: China’s Approach . . . . . . . . . . . 541 Ahmed Abdulkarem Abdulqader Saif

73

State Capabilities, Inclusive Development and Multipolarity: Toolkit of Public Policies for Argentina and Latin America Countries from the Analysis of the China Case . . . . . . . . . . . . . . . . . . 549 Gonzalo Diéguez

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The Balancing of Political Powers: The Case of Chinese Modernization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 555 Mohd Aminul Karim

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Chinese Model of Economic Growth—An Important Contribution to the Human Community Heritage . . . . . . . . . . . . . . . 563 Dmytro Yefremov

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A New Facet of Economic Growth in China: Inclusiveness . . . . . . . 571 Khamidulla Normuradov

77

Innovative Economic Growth Initiatives for Chinese Industry in a Time of Globalization Challenges . . . . . . . . . . . . . . . . . 577 Olena Boiko

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China’s Progress: 70 Years on and, Despite All Challenges, Still Aiming Higher and Higher . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 599 Livio Santos De Leite Ribeiro

Part VII

China and the World

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China and the Rebalancing of Globalisation . . . . . . . . . . . . . . . . . . . . 607 Grzegorz W. Kolodko

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China: A Resilient Nation to Embrace the World . . . . . . . . . . . . . . . . 619 Ong Tee Keat

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China’s Capacity to Consolidate Economic Globalisation . . . . . . . . 623 Jasna Plevnik

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China at 70 Continues to Astonish the World . . . . . . . . . . . . . . . . . . . 633 William Cuthbert Jones

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The Historical Process of China and Economic Globalization: Economic Growth and Inclusive Development . . . . . . . . . . . . . . . . . . 641 Paolo Andrea Panerai

84

The 70-Years of China’s Development Along with the World . . . . . 647 Iwao Okamoto

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Social Policy as a Factor of Economic Growth: Western Practice and China’s Experience as a Guideline for Developing Countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 657 Olena Aleksandrova

86

China and the Changing Global Monetary Landscape . . . . . . . . . . . 671 Gal Luft

87

China and the Developing World: Past and Future . . . . . . . . . . . . . . 679 Guillermo José Tolosa Silva

88

China’s Public Policy Experience: Lessons, Developing Countries and the Future of the World . . . . . . . . . . . . . . . . . . . . . . . . . 695 Lloyd G. Adu Amoah

89

The Historical Process of China and Economic Globalization . . . . . 703 Ahmid Lawal

90

A View of the Politico-Economic Relationships Between the Western Balkans and the People’s Republic of China . . . . . . . . . 709 Milos Djindjic

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New Perspectives on China Going Global: Global Opinion Research on Perceptions of Chinese Companies . . . . . . . . . . . . . . . . . 717 Peter Thomas Zysk

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92

People’s Republic of China at 70: A View from the West End of Asia and East Beginning of Europe . . . . . . . . . . . . . . . . . . . . . . . . . . 727 Yüksel Görmez

93

Meaning of the Chinese Factor for Modern World Financial System Development: Challenges and Opportunities for Russia . . . 733 Violetta Arkhipova

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China’s Macroeconomic Policy Trifecta and Challenges to the Governance of the Global Trading System . . . . . . . . . . . . . . . . 737 Mark Steven Kruger

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Economic Growth and Inclusive Development: Some Observations from Indian Farmers’ Perspective . . . . . . . . . . . . . . . . 749 Anji Raju Vegiraju

Part VIII Multilateral and Bilateral Relations 96

Impact of Chinese Investments and Financing on Economic Growth and Inclusive Development in the Horn of Africa . . . . . . . . 759 Ali Issa Abdi

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He US and China Must Manage Their Competition Over Advanced Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 767 Cliff Kupchan

98

Relations Between Chile and China: Solid Political Foundations and Pioneers in Bilateral Cooperation in South America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 775 Ennio Vivaldi

99

Openness, Cooperation, and Dialogue Between the Malay and Chinese Civilizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 781 Peter T. C. Chang

100 Kyrgyzstan and China: The Role of Higher Education in Developing the New Relationship of “Dialogue of Civilizations” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 789 Peter T. C. Chang 101 Openness, Cooperation, and Dialogue with China and Implications for the EU Accession Bid of Macedonia . . . . . . . . 791 Marija Risteska 102 Visit Laos-China Year 2019 Enhancing Cultural and Economic Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 799 Bouadam Sengkhamkhoutlavong

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103 Main Directions of Agricultural Food Trade and Economic Cooperation Between the Republic of Kazakhstan and the People’s Republic of China . . . . . . . . . . . . . . . . . . . . . . . . . . . . 807 Ademi Yerassylova 104 Kyrgyzstan and China: Economic Growth and Inclusive Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 817 Kubanychbek Toktorbaev 105 “Community with a Shared Future for Mankind” and Japan–China-ROK Trilateral Cooperation . . . . . . . . . . . . . . . . . 821 Yona Kikuchi 106 Openness, Cooperation, and Civilizational Dialogue on the Example of the Tajik-Chinese Comprehensive Strategic Partnership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 825 Parviz Muhammadzoda 107 China’s Partnerships with Countries in the African Region: A Shared Cooperation for Social and Economic Development . . . . 831 Luckson Muganyizi Kaino 108 China’s Contribution to Technological Human Capital Development in Tanzania Through Scholarship and Training Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 839 Hezron R. Makundi 109 Chinese Investment in the Arab Region: Building Bilateral Cooperation and Common Development . . . . . . . . . . . . . . . . . . . . . . . 853 Linda Matar 110 Armenia and China: The New Initiatives for Future Relationships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 863 Lilit Sarukhanyan 111 China-Uganda Affairs in the Ugandan Press . . . . . . . . . . . . . . . . . . . . 867 Miria Babanga Sidney Part IX Sustainable Development 112 Innovation Perspective as a Development Impulse to Improve the Future . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 877 Francisco Javier Velázquez López 113 Modernization: A Perspective from the Periphery . . . . . . . . . . . . . . . 885 Giga Zedania 114 A Sustainable Global Food System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 893 Cristiane Derani

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115 Ecological Stability and Sustainable Development in China: A Demographic Perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 903 Lakshman Dissanayake and Manori Weeratunga 116 The Need for China’s Leadership on Delivering Global Sustainable Environmental Protection . . . . . . . . . . . . . . . . . . . . . . . . . 913 Andrew Mark Farmer 117 On Behalf of the Comrade Citizen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 921 Gerard Alphonso Jean Jacques 118 Transparency Facilitates Financial Markets . . . . . . . . . . . . . . . . . . . . 929 Marty Schenker 119 China’s Way to an “Ecological Civilization” . . . . . . . . . . . . . . . . . . . . 933 Cassio Luiselli Fernández 120 Strategic Studies in Developing Countries . . . . . . . . . . . . . . . . . . . . . . 941 Aydin Nurhan 121 External Factors Affecting Sustainable Development of Mongolia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 951 Zagdtsesem Ukhnaa 122 Economic Growth and Inclusive Development in the Era of Disruptive Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 957 Boonwara Sumano Chenphuengpawn 123 Automation and the Future of Work in Emerging Economies: Issues, Evidence, and a Way Forward . . . . . . . . . . . . . . . . . . . . . . . . . . 965 Iyanatul Islam

Chapter 1

A Community with a Shared Future for Mankind as a New Paradigm to Promote World Development Linggui Wang

A Community with a Shared Future for Mankind is a brand new paradigm of development that China provides for today’s world. The core of this new model is to change traditional approaches to development, strengthen cooperation and share the future. Former Deputy Prime Minister of Thailand Bhokin Bhalakula believes that “a Community with a Shared Future for Mankind” is China’s commitment not only to its people but also to the world, reflecting China’s willingness to co-exist and work with other countries to solve problems and tackle complicated challenges. Former Codex Secretary Tom Heilandt says that this program encourages us to adopt a new model of thinking in building a new world. Yang Peou, Secretary-General of the Royal Academy of Cambodia, describes the building of a Community with a Shared Future for Mankind as a new form of international relations that emphasizes win–win cooperation and stimulates the sustainable development of civilizations.

1.1 A Community with a Shared Future for Mankind Is a New Paradigm to Promote World Development As globalization speeds up, countries are increasingly interdependent on each other and a series of global issues such as economic growth, the gap between rich and poor, terrorism, environmental protection, and climate change are posing serious challenges to the future development of mankind. Facing this increase in global

L. Wang (B) The Chinese Academy of Social Sciences, Beijing, China e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_1

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issues, is the Western development model the end of human development?1 Is there any newer option? The participating scholars share their answers. First, a Community with a Shared Future for Mankind has brought important opportunities for the development of all countries in the world. Pinit Jarusombat, former Deputy Prime Minister of Thailand, thinks that building a Community with a Shared Future for Mankind contributes to the development of the international community and illustrates that, from a historical perspective, China is assuming more responsibilities to bring significant opportunities to the people of the world. According to the Brunei scholar Dr. Kartini Rahman, “the Community with a Shared Future for Mankind provides a good development direction and an impetus to meet the challenges in the future. Hence, we should reject isolation and separate development and be devoted to developing multilateralism.” The scholar Tien Tsai Chang of the University of Malaya believes that building “a Community with a Shared Future for Mankind” will bring a new century of prosperity, peace, and harmony to Asia. Second, a Community with a Shared Future for Mankind embodies a new global relationship. Former President of Albania Meidani thinks that Xi Jinping’s vision is vastly different from Trump’s because the former is mainly based on economic globalization while the latter emphasizes “America First”. In the view of Bulgarian Professor Zahariev’s, we are not advancing Europeanization, Americanization, or Sinicization but a real pluralism, namely a Community with a Shared Future for Mankind. Bangladeshi scholar Mahmood believes that China is innovatively leading the way to the future as it aims to achieve inclusive development and peaceful coexistence of all countries. In Pakistani scholar Sundar’s opinion, to address the regional imbalance of economic development and the internal imbalance of development of different countries, we need to find the solution under the framework of a Community with a Shared Future for Mankind. Third, a Community with a Shared Future for Mankind transcends traditional Western thinking of liberal development and emphasizes the maximization of common interests. For a long time, Western liberalism has paid more attention to competition and the maximization of personal gains than cooperation. With regard to this, Libyan representatives of African International Relations Research argue that we should change our way of thinking. Rather than focus on the interests of individual countries, we should concentrate on the interests of mankind and ensure the no country is left behind so that we can achieve the ultimate goal of poverty reduction and economic development. Ukrainian scholar Sidenko thinks that a Community with a Shared Future for Mankind has five pillars that pursue the public interest rather than self-interest, win–win results rather than a winner-takes-all situation,

1

In 1989, the Japanese-American scholar Francis Fukuyama published a paper titled “The End of History” in the American neo-conservative journal The National Interests (later compiled into the book titled The End of History and the Last Man), causing strong reverberations. He argues that liberal democracy has become unmatched and “as such constituted the end of history”. Thus, he declares that the current state of affairs of the world is not only “the end of the Cold War” but also “the end point of mankind’s ideological evolution” and Western liberal democracy represents the best choice and final form of human politics, thus constituting the end of history.

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long-term rather than short-term effects, and diversity rather than a uniform development model. It is a new philosophy for the new era: people all over the world share ideas and experience to resolve crises and challenges. Fourth, a Community with a Shared Future for Mankind emphasizes seeking common ground while preserving differences and advocates multilateral cooperation. Such a community opposes interference in the internal affairs of other countries, highlights common development, and settles differences and international disputes through dialogue and consultation.2 According to Dugal, a representative of the Bahá’í International Community, the concept of a Community with a Shared Future for Mankind is based on negotiation rather than confrontation. In the Bulgarian scholar Pantev’s opinion, the road to win–win results entails coordination among major powers. Only through the cooperation of the four global leaders (the US, the European Union, Russia, and China) can the construction of a Community with a Shared Future for Mankind be achieved. The representatives of the Center for China Studies of Nigeria believe that the establishment of such a community requires all countries to consider the each other’s major concerns and promote common development. Fifth, it is feasible to build a Community with a Shared Future for Mankind. As the development model of neo-liberalism constantly suffers setbacks in the real world, new solutions to human problems are being proposed. For example, the political philosopher Thomas Pogge says, “Indeed, I advocate not an alternative of greater mutual isolation, but a different path of globalization, involving political as well as economic integration, which would fulfill human rights worldwide and afford persons everywhere an opportunity to share the benefits of global economic growth.” His view of “affording persons everywhere an opportunity to share the benefits of global economic growth” is similar to China’s Community with a Shared Future for Mankind. However, unlike Western solutions, the plan is put forward by China in its development process and hence it is more practical and feasible.

1.2 The 70-Year Development of the PRC Is a Model for the Construction of a Community with a Shared Future for Mankind The 70-year growth of the People’s Republic of China is a seven-decade miracle of mankind. Through hundreds of years of industrialization, no country with a population of more than 1 billion has ever accomplished such a feat of economic development within just a few decades. China’s per capita income has grown rapidly to around $10,000 from just above $100 and over 800 million people have been lifted out of absolute poverty, providing a new model for world development. 2

Xu Yanling and Chen Mingkun, “The Multiple Construction of a Community of Common Destiny for All Mankind,” Studies on Mao Zedong and Deng Xiaoping Theories, 2016 (07).

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First, after going through reform and opening up, China has proved that industrialization can be achieved globally. China is home to more than 21% of the world’s population. Its rapid industrialization involving such a massive population is unprecedented in history.3 Once completed, it will double the population of the global industrial society. Some scholars say that “China’s current industrialization is a period of change in world history that will tremendously change the map of global industrialization. It is rare in both speed and breadth compared with the industrialization process of other major countries in the world.”4 This not only means that a populous country can move from underdevelopment to development but also indicates the possibility of worldwide industrialization.5 Therefore, mankind can realize industrialization in a non-confrontational way, which is totally different from the zero-sum development thinking of Western developed countries. Second, moving towards common prosperity is not a dream but a realistic goal that can be realized on a global scale. The 70-year development of the People’s Republic of China has demonstrated that common prosperity is within reach, as evidenced by the sharp decline in the number of poor people in China. In 1978, according to the poverty line of 100 yuan per person per year, set by the Chinese government, 250 million people in rural areas lived in poverty, accounting for 30.7% of the total rural population. Since then, China has been raising the standard of poverty alleviation. Even so, the number of people living in poverty is irreversibly falling. From the end of 2015 to the end of 2018, the number of poor people in rural areas decreased from 55.75 million to 16.6 million, the incidence of poverty dropped from 5.7 to 1.7%, and per capita disposable income for rural residents in poor areas increased from 7653 yuan to 10,371 yuan. Between 1981 and 2013, the number of people in extreme poverty, namely those living on less than $1.90 a day according to the standard established by the World Bank (in constant 2011 international dollars), fell from 1.893 billion to 766 million. During the same period, this number decreased from 878 million to 25.17 million in China, a contribution of 75.7% to global poverty alleviation. China is striving to eliminate absolute poverty completely by 2020. Third, China is providing new impetus for world development. Deng Xiaoping said: “Our efforts to carry out opening up, learn foreign technology, and utilize foreign capital are aimed at improving socialism. It is essential that we adhere to socialism. We must develop the forces of production, develop socialist public ownership, and increase the income of the people. The purpose of allowing some regions and some people to become rich before others is to enable all of them to prosper eventually. We have to make sure there is no polarization of society. That is what socialism means.”6 Xi Jinping describes the Chinese model as “a road that puts the interests 3

Huang Qunhui, “The Process of Industrialization in China: Stage, Characteristics and Prospect,” Economics and Management, 2013 (07). 4 Jin Bei, “China Manufacturing Industry in the World Division of Labor,” China Industrial Economy, 2003 (05). 5 Xu Xuhong, “On the World Significance of China’s New Industrialization,” Journal of Harbin University, 2006 (11). 6 Selected Works of Deng Xiaoping (Volume III), People’s Publishing House, 1993, p.195.

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of people first. China adheres to the philosophy of people-centered development, regards improving people’s lives and well-being as the fundamental purpose, seeks the driving force for development from the people, relies on the people to promote development, and makes development benefit the people.” Further, he said, “This is a road that seeks common development amid opening up. Committed to the basic national policy of opening up and a win–win strategy of opening up, China has been promoting its internal and external development and, in this process, delivering benefits to other countries and peoples.”7 Since the Belt and Road Initiative was put forward, China has been increasing the supply of international public goods as well as explaining to the world its new diplomatic ideas and propositions, such as the “correct outlook on justice and interests” and “amity, sincerity, mutual benefit, and inclusiveness”. In recent years, China has provided 10,000 government scholarships annually to Belt and Road countries and 29 countries have obtained visa-free and visa-on-arrival status. China has formed 1023 pairs of sister city friendships with 61 countries, accounting for 40.18% of the total number of its sister cities. Research by international institutions such as the World Bank shows that international cooperation under the Belt and Road Initiative increased global economic growth by at least 0.1 percentage point in 2019. The participating scholars have made the following comments on China’s 70year development and its significance for the world. First, China’s achievements are amazing to the world. Former Croatian President Mesi´c said at the meeting, “China’s economic model has been tested by practice. In the past 70 years, China has made impressive economic achievements never before seen. What is most impressive is its stupendous achievements in poverty reduction under the socialist system, making it the most successful country in history with respect to poverty reduction.” According to Marty Schenker, Chief Content Officer for Bloomberg, “While every country has its unique development opportunities, never before in world history has a populous country like China achieved such a huge economic transformation in such a short time.” Second, the Western path is not the only choice. Pinit Jarusombat, former Deputy Prime Minister of Thailand said, “China’s 70-year development is beneficial not only to the Chinese people but also to the people of the world. Its experience and practices are worth studying for all countries that seek a better approach to their national development.” The South Sudanese scholar Nyuat believes that developing countries are eager to learn from China’s “people-oriented” approach to poverty reduction. British scholar Martin Jacques said, “China has the largest population, the fastest economic growth, and the most innovative development.” In Nigerian scholar Onunaiju’s view, “every country, by starting from its own reality, can find a scientific approach to prosperity and modernization.”

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On January 17, 2017, Xi Jinping delivered a keynote speech at the opening session of the World Economic Forum Annual Meeting 2017, entitled “Jointly Shoulder Responsibility of Our Times, Promote Global Growth”.

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Third, China represents a model of inclusive development. According to Raffi Hovannisian, the founding director of the Armenian Center for National and International Studies (ACNIS) and the first Foreign Minister of Armenia, be it a head of state or a head of government, be it an international organization, a former leader or a former political figure, we should regard China as a role model and learn from it. The Indian scholar Upadhyay sees China’s effort to lift over 800 million people out of poverty as a paradigm of a Community with a Shared Future for Mankind. In Martin Jacques’ opinion, reform and opening up is a huge common product that is highly relevant for other developing countries.

1.3 Promoting the Construction of the Community with a Shared Future for Mankind As a new paradigm, a Community with a Shared Future for Mankind has become a global concept. Promoting the construction of such a community means the suppression of the negative energy of capital and a return to human nature. In other words, development revolves around making more people live a happy life instead of pursuing the accumulation of capital. With the concept of common, fair, and sustainable development and the principle of extensive consultation, joint contribution and shared benefits, we should work together to create markets and share technological achievements to achieve industrialization and completely fix the antagonistic organization of the world. First, a basic consensus has been reached on the building of a Community with a Shared Future for Mankind. In his speech at the United Nations Office at Geneva in January 2017, President Xi proposed “building a Community with a Shared Future for Mankind to achieve shared and win–win development.”8 A month later, the 55th session of the UN Commission for Social Development unanimously adopted a resolution on “the social dimensions of the New Partnership for Africa’s Development (NEPAD),” calling on the international community to further support the economic and social development of Africa in the spirit of win–win cooperation and the construction of a Community with a Shared Future for Mankind.9 With this, the concept of a Community with a Shared Future for Mankind was incorporated into international organizations for the first time as a new solution to development problems. Second, the rise of developing countries has laid a foundation for the construction of a Community with a Shared Future for Mankind. Since the end of World War II, the comprehensive strength of developing countries has been steadily increasing. 8

On January 17, 2017, the Chinese Presdient Xi Jinping delivered a keynote speech at the opening session of the World Economic Forum Annual Meeting 2017, entitled “Jointly Shoulder Responsibility for Our Times, Promote Global Growth”. 9 “The Concept of ‘a Community with a Shared Future for Mankind’ is Enshrined in the UN Resolution,” 11 February 2017, Xinhua News Agency.

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The share of developing countries’ GDP in world GDP has risen from less than 20% in 1970 to 40% in 2019. Imports to developing economies are also expanding, with the proportion in the world’s imports growing from about 20% to more than 40% in 2019. In particular, imports of consumer goods are increasing and the proportion of the world’s imports has gone up drastically. More importantly, the institutional building capacity of developing countries is maturing. According to statistics from the World Trade Organization, the free trade agreements signed between developing countries and between developing and developed countries account for about 70% of the world total, indicating that developing countries are in a better position to meet the challenges. Third, the correct outlook on justice and interests and the principle of achieving shared growth through discussion and collaboration provide basic guidelines for building a Community with a Shared Future for Mankind. The Mexican scholar Sánchez believes that the traditional global governance system, which is based on national interests, leads to a very narrow interpretation of global interests and stunts our ability to pursue a shared future. Building a Community with a Shared Future for Mankind means giving up such traditional ideas. First, we should follow a correct outlook on justice and interests. General Secretary Xi Jinping said, “While developing our own interests, we should consider and take care of the interests of other countries. We must hold to a correct outlook on justice and interests with priority given to justice, refrain from seeking quick success and instant benefits, and not resort to short-term behavior.”10 The core of the outlook is to exercise self-restraint in the face of interests and to show the spirit of dedication. In other words, we need to make the pie bigger and ensure that it is reasonably shared. Specifically, we need to do three things. First, we cannot be misled by capital to focus solely on material gains, ignore the demands of the people, and take the predatory path to profit-seeking. Second, we need to develop the spirit of equality so that we will not follow the old path to colonialism. Third, we must keep in mind the ultimate goal of development, namely to “pursue cooperation instead of confrontation and a win–win outcome for two or more parties instead of a winner-takes-all result, constantly seek the maximum common denominator and wider areas of cooperation, and guide all parties into consensus and closer coordination and cooperation.”11 Second, all countries should adhere to the principle of achieving shared growth through discussion and collaboration when dealing with problems. To turn ideal interests into practical interests requires collaboration between China and Belt and Road countries and the fruits of economic growth should be transparently distributed to Belt and Road countries. Only in this way can subsequent cooperation be carried out and improved. 10

On April 29, 2016, in the 31st collective study session organized by the Political Bureau of the CPC Central Committee, Xi Jinping stressed learning from historical experience and innovating the concept of cooperation to make Belt and Road construction a driving force for the common development of all countries. 11 On September 27, 2016, during the 35th collective study session of the Political Bureau of the CPC Central Committee, Xi Jinping stressed to strengthen cooperation to advance the reform of the global governance system and promote the noble cause of human peace and development.

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Concerning the question of how to encourage the building of a Community with a Shared Future for Mankind, the participating scholars propose the following measures: First, we should strengthen the construction of a unified global market. According to Sattar, Chairman of the Policy Research Institute, Bangladesh, to develop the global economy together we must learn to share economic growth and build a global market with each other. Second, we should promote technical cooperation. Hassan, President of the Third World Academy of Sciences (TWAS) and the Sudanese Nation al Academy of Sciences (SNAS), suggests the establishment of a digital Belt and Road Initiative for data sharing as well as the Alliance of International Science Organizations in the Belt and Road Region for the building of a network of academies of sciences and for academic exchanges and sharing. The Thai scholar Chenphuengpawn recommends strengthening training in skills for the future. Third, we should strengthen green cooperation. The Canadian scholar Chatterjee holds the view that a path of ecologically sustainable development can be found in the Belt and Road Initiative and a higher level of sustainable development is possible with the help of technological innovation. Ei Sun Oh, Principal Adviser of the Singapore Institute of International Affairs, advises that infrastructure construction should be carried out in a sustainable and green manner with due attention to environmental protection. Fourth, we should help other countries eradicate poverty. Zainab Suleiman Okino, editor-in-chief of the Nigerian Blueprint Newspaper, believes that technology export from China is essential to helping Africa out of poverty. According to Indian scholar Vegiraju, China has a responsibility to share some of its knowledge with other countries, especially when it comes to the cooperation on poverty reduction. Fifth, we should establish a permanent forum for dialogue with China. Mr. Velarde from the Latin American and Caribbean Economic System (SELA) thinks that a permanent forum for dialogue is conducive to discussion about development issues. Sixth, we should strengthen cooperation between think tanks. Yang Peou, Secretary-General of the Royal Academy of Cambodia, believes that think tanks will play a very important role in building a Community with a Shared Future for Mankind. The Dutch scholar Sabel believes that think tanks should find more solutions through more innovative and practical means and should ensure that these solutions are in place.

Part I

Country-Specific Views

Chapter 2

“China’s 70-Year Development and the Building of a Community with a Shared Future for Mankind”: A Serbian Perspective Tomislav Nikoli´c

I am pleased for the opportunity to participate in this meeting and to make my contribution on behalf of the Republic of Serbia to the marking of the 70th anniversary of China’s development. I have been invited in the capacity as former President of the Republic of Serbia and as the incumbent President of the National Council for Coordination of Cooperation with the Russian Federation and the People’s Republic of China. This one of a kind institution in Europe is a clear indication of the importance that Serbia places on cooperation with the People’s Republic of China. Only Serbia boasts an institution led by a former Head of State, composed of nine Government Ministers, including three Deputy Prime Ministers. The National Council is tasked with implementing all agreements and deepening cooperation with two major world powers who are at the same time two great friends of Serbia. Serbia is neither large in territory and population, nor in terms of impact in international relations, but it is a country of great men—Nikola Tesla, Mihajlo Pupin, Milutin Milankovi´c, Novak Djokovi´c, and Bata Živojinovi´c, better known as Valter, from the films which have remained popular in China to this day. Serbia appreciates freedom and can recognize friends. Serbia is proud of its friendship with China. There are no outstanding issues between us, no disputes. I believe that the relationship between our states is a role model for partnership marked by mutual respect and understanding. Both Serbia and China have undergone many challenges and times of hardship throughout their history, and we have learnt to choose our friends carefully. An old Chinese proverb, one close to my heart, goes: He who is wealthy but friendless is not rich. He who has many friends but no wealth is not poor.

T. Nikoli´c (B) Belgrade, Serbia e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_2

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The Serbs will always remember the support lent by China in the darkest moments of our recent history. We will never forget that you suffered alongside Serbia in the 1999 NATO bombing campaign, when the bombs dropped on the Embassy of China in Belgrade took a toll of lives of Chinese nationals. During my Presidency, I renewed the friendship between our countries, and today, at the helm of the National Council, I am helping to bring us closer together. It was in August 2013 that I paid my first presidential visit to China, on which occasion President Xi Jinping and I signed a Joint Declaration on the Deepening of the Strategic Partnership. Only three years later, our relations were upgraded to the level of a comprehensive strategic partnership, and this year we have signed the Bilateral Cooperation Plan, reaffirming our commitment to further mutually beneficial cooperation in many areas including infrastructure, energy, industry, agriculture, trade, finance, health, environmental protection, culture, education, and technology. Never before have we witnessed so many Chinese investments in Serbia, which are always met with approval. The total value of projects that Serbia is currently implementing together with China is in the region of EUR 10 billion. Let me mention just a few investments that we can take pride in today—the purchase of Smederevo Steelworks by China’s Hesteel, the strategic partnership between Zijin Mining and MSC Bor, and the Shandong Linglong greenfield investment in a tyre factory. China has shown its appreciation for the efforts that Serbia has invested in its own development and its readiness to work, together with us, on the implementation of Serbia’s development goals—reduction of unemployment, economic competitiveness, promotion of exports, and investment potentials. Unlike the initial investments primarily targeted at infrastructure and energy, today we see more and more projects carried out in company-to-company partnership and greenfield investments. Academic cooperation and cooperation in sectors of health, education, tourism, as well as military and police cooperation have recorded significant successes over the past years, which means that today Chinese and Serbian police officers patrol three major Serbian cities side by side. According to a 2018 EP document about the CEE countries’ relationship and cooperation with China, Serbia is one of the top four “champions” of this collaboration. It is no secret that many Western countries perceive today’s transformation of the global political system as a major threat. The governments of most European states allocate funds to combat “Chinfluence” and impose sanctions against Russia because the Western world sees the rise of Russia and the growing influence of China in Europe as a threat to be fought against. It is futile to fight the inevitable. The world is no longer unipolar, and it never will be again, because control over global politics from one centre of power has pushed many peoples to the brink of survival. Many countries want a multipolar world and equality, a world where we all have a voice, a world with no strings attached and without the solutions imposed by weapons, where international law is observed. Owing to its actions in the United Nations, China has proven to everyone that it stands for these universal and universally accepted values, which lie at the core of this crucial international organization. It has proven this not only in the case of Serbia,

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when it advocated for the respect of Resolution 1244 (1999), but also owing to its position vis-à-vis the unfolding crises in Syria and Iran. Small states and vulnerable nations have an ally in China. All this would have been impossible without China’s special approach to international cooperation. The Belt and Road initiative is above all unique in terms of its concept, size, and creativity. Its uniqueness also mirrors the initiative’s adjustability to the ideas, conditions, and possibilities of potential partners. I am confident that the main reason behind its success is the fact that it acknowledges that not all countries are the same, that not all governments work in the same way, and that not all cultures can be offered identical rigid templates for cooperation. Every state or bloc of states can negotiate with China under terms that suit them, and agreements are concluded in line with individual benchmarks. Today we are here, first and foremost, to jointly celebrate the 70th anniversary of the founding of modern China, which presents itself at its best under the leadership of President Xi Jinping. Everyone who participated in the creation of the contemporary China can take pride in their achievements over the past decades, and the friends of China, including Serbia of course, find it heartening. Seventy years ago, China was subjected to foreign influence and humiliation, while today it stands at the forefront of its time, being the global leader in many areas—high-speed rail, renewable energy, e-commerce, artificial intelligence, innovation… This is an astounding pace of development. A pace that can leave no one indifferent. When we reflect upon all the achievements of China over the past 70 years, we can expect nothing but further admirable progress and innovation. The fact that China’s investments in R&D last year amounted to about USD 280 billion, which is more than the entire EU’s budget in this field, is illustrative of China’s progress in this period, shorter than an average lifespan. This is just one of the ways in which China acquires the new know-how and technical expertise needed for further economic growth. The Chinese Yuan (CNY) has joined the IMF basket of currencies; the number of companies in China is growing day by day; the armed forces have been modernized; pollution in major cities has been reduced; 119 companies on the Fortune 500 list are Chinese, 121 are American, while only 20 years ago China had no more than 8 companies on the list. Four of the largest world banks are Chinese. All these facts add up to the realization of one of the main goals that President Xi has set out for China in his statement before the CPC National Congress in late 2017—by 2050, the President said, China will have become the most influential country in the world. The facts directly confirm the President’s words, from this year’s military parade to the effect that no one can halt the development of China and that China is able to fight off any attack. Finally, let me revisit the bonds between Serbia and China, which, regardless of the great distance between them, share similar ethical values. Even though this might be common knowledge, let me take the opportunity to recall an event from 1962, when the first satellite signal was sent up into space, beaming the greatest achievements of mankind, selected to present the people on Earth at their best. The

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selected images included the symbols of China and Serbia—the Great Wall of China and the White Angel fresco from the Mileševa Monastery in Serbia. We believe to this day that every sensible person everywhere will understand these images as messages of freedom, peace, and love. This is our common gift to the world and a contribution to building the common future of mankind.

Chapter 3

“China’s 70-Year Development and the Building of a Community with a Shared Future for Mankind”: A Croatian Perspective Stjepan Mesic

I am honoured to speak at the globally distinguished Hongqiao International Economic Forum. China has so many extraordinary economists and economic institutes whose economic models have proved themselves in practice. China’s experts have had an indispensable impact on China’s economic growth that is well grounded despite current unprecedented challenges to it, like America’s trade war on China. From the 1990s to now the World Bank and other global financial institutions predicted China’s GDP would grow no more than 5% annually from 1994 to 2015. China’s potential for growth has often been underestimated though it has shown that it is here to stay. I would like to congratulate China’s hard-working people, leaders, and experts on a remarkable 70th anniversary of the People’s Republic of China. They were and are central driving forces behind China’s transformation to a middle-income country and, together with the United States, the leading power in technology and artificial intelligence. I would also like to thank to express my gratitude to the amazing Chinese Academy of Social Sciences that brought me here to beautiful Shanghai. This International Economic Forum is taking place under the framework of the Second China International Import Expo (CIIE) that appears to me as China’s very concrete and generous answer to the tendency of protectionism in the world. I wish that Germany would do something similar in Europe. I understand the last 70 years of China, from the Revolution in 1949 to 2019, as a path of reform (gaige) and China’s struggle to change and to remember. Recently, the renowned sinologist and historian Wang Gungwu said, at the launch of Think China magazine in Singapore, “China’s reforms don’t contradict to the communist revolution—they consolidate it.” S. Mesic (B) Zagreb, Croatia e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_3

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There are many Chinese economic achievements, unprecedented in human history, that have to be admired but I am most impressed with China’s achievements in poverty reduction under the banner of socialism. In the history of humankind, the most successful country in terms of poverty elimination is China. After China’s forty years of development 850 million Chinese were lifted out of poverty. According to the World Bank China has contributed more than 70% to global poverty reduction. China’s middle class has grown to 420 million. I hope next year in Stockholm will be different and that the fascinating results of China’s economists and leadership will be awarded the Nobel prize. Now I will take this opportunity for providing my views on China’s project, named the Community with a Shared Future for Mankind. Currently, China seems to me to be the only country in the world that pursues a global vision of constructing the better world for all people. China’s passion and devotion to reform itself supports my deep belief that China has the capacity to carry out world order closer to a community based on stronger multi-polarity, and new multilateralism based on shared development. These processes have already started with the Belt and Road Initiative envisioned by President of China Xi Jinping. I share the opinion of Professor Yan Xuetong, the Dean of the Institute of International Relations, Tsinghua University that for every country it is essential what kind of leadership it has. China’s leaders with their ideas of development, experience, pragmatism, and the ability to think strategically locally, nationally, and globally have been essential for China’s historical success. In past 40 years, I have witnessed China’s leaders’ ability not just to make any kind of development but also to move the country further from being the world factory to the laboratory of the world and the leader in the 5G economy. Achieving economic development is one of the main responsibilities of every government. The wellbeing of the people and peace are the fundamental goals of development. I met with President of China Xi Jinping several times in China during several high-level conferences and forums. I am not here to say who is a historic figure and who is not, but ideas, values, and the work that President Xi Jinping has put into his foreign policy strategy called Belt and Road Initiative, I see as historic for China and the world. The Belt and Road Initiative is a project that came to us from the future! The BRI epitomizes a new kind of relationship between China and the world and as such is a major platform for building a community with a shared future in the new era. I have attended many forums on the Belt and Road Initiative in China and Europe and have read many articles and books on it, and I would absolutely agree with the globally renowned foreign policy expert Wang Yiwei’s analysis that behind the Belt and Road Initiative is China’s efforts to connect the world. President Xi’s global community with a shared future seems to me to be a concept that has strength to change the very structure of the world order that has been based for centuries on power politics.

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This project for the world is absolutely new and will need a long time to eliminate the barriers brought to the world by geopolitics, eliminate the pain caused by poverty, colonialism, neoliberalism, unfairness, protectionism, and populism and to create a path of development that is in accordance with sustainable development and people’s aspirations for a better life. I have been visited China many times and seen with my own eyes China’s ability to create amazing economic and social progress for itself and the world. That is why I am optimistic that China together with other countries will build a Community with a Shared Future for Mankind. Thank you for your attention.

Chapter 4

“China’s 70-Year Development and the Building of a Community with a Shared Future for Mankind”: The Czech Perspective Jiˇrí Paroubek

The topic of the conference—people’s benefits from China—is a highly relevant one. China is a wholly unique civilisation with a history of five thousand years, along with over two thousand years of statehood. This point of view makes 70 years of modern history a relatively short period in China’s history. Seventy years ago, 542 million Chinese people took the path that was to change and modernize an undeveloped agrarian country with a miniscule amount of industrial production, a country destroyed by the war with the Japanese and the ensuing civil war, once illiterate with a short average life expectancy. Things turned out pretty well, didn’t they? The PRC’s development in the first thirty years was rather ambiguous, nevertheless the Chinese economy did still grow at that time. After the civil war most specialists and professionals left the country, and this posed a challenge—if China were to be successful it had to develop a new pool of experts and managers, but it was seemingly impossible. Industrialization started in the beginning of the fifties and at that time many Czechoslovakian experts joined in helping create a new Chinese industry. A huge expansion has taken place in the PRC’s economy since 1978, when Deng Xiaoping was head of state, along with high rates of economic growth. Since then, the expansion of the Chinese economy has actually been a strong motivator for growth in the global economy to this day. This has put China in second place in terms of global economies, with future ambitions being no lesser. This growth, especially in the past forty years, is due to exceptional factors: China has and is to this day still undertaking huge investments from foreign and even local investors. The Chinese economy is strongly predicated on planning and state intervention, yet it is also a market-based economy, which is founded on a highly motivated working force.

J. Paroubek (B) Prague, Czech Republic e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_4

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China has also succeeded in eradicating illiteracy, and improved its health-care, which has led to an increase in average life expectancy. It has also managed to elevate and empower Chinese women from what was formerly a subordinate position; this has had its own merit—a substantial increase in the pool of talented people. A significant proportion of the Chinese people have overcome poverty and hundreds of millions of people are now part of the ever-growing Chinese middle class. The fact that living standards have improved is undeniable, as has the stability of the Chinese community. China is admirable and has a strong contribution to make to the whole world.

Chapter 5

“China’s 70-Year Development and the Building of a Community with a Shared Future for Mankind”: Thailand’s Perspective Bhokin Bhalakula

I would like to thank the organizers, the National Institute for Global Strategy and the Chinese Academy of Social Science, and in particular professor Wang Linggui, the Executive Vice Chairman of the Board of Directors and Secretary General of the NIGS, for inviting me to participate and write a paper for the high-level international forum “China’s 70-year Development and the Construction of a Community with a Shared Future for Mankind,” under the framework of the Second China International Import Expo, here in Shanghai on 5 and 6 November 2019. Since 2014 I have been invited more than 15 times by various Chinese organizers— the Communist Party of China (CPC), the Chinese government, associations and foundations affiliated with the CPC or the Chinese government, Chinese academic institutes and universities, and Chinese and Thai private sector entities—to deliver speeches and to participate in various events regarding the Belt and Road Initiative (BRI) in China, Thailand, and Indonesia. I have read most of President Xi Jinping’s statements since 2012, and the two voluminous books on the Governance of China, which collect all the speeches of President Xi from 2012 to 2017, which make me think of the three essential Chinese concepts of Socialism with Chinese Characteristics, a Community with a Shared Future for Mankind, and the Belt and Road Initiative (previously called the One Belt One Road). It is astonishing that China, as a communist country, has survived since 1949, and developed especially over the last 40 years to become the world’s second-largest economy. China is a champion in reducing inequalities, especially in terms of poverty reduction. The number of people living in extreme poverty fell from 836 million in 1987 to 156 million in 2010. In 2015, the number of poor in rural areas fell to approximately 56 million, and the country aims to eradicate poverty by 2020. This is B. Bhalakula (B) Thai-Chinese Culture and Economy Association, Bangkok, Thailand e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_5

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a result of the right concepts, policies, appropriate implementation of concepts and policies, and of course the hard work of the CPC, the Chinese government, and the Chinese people. If we look at the first socialist society, the Paris Commune in 1871, when Karl Marx was still alive, although the Communards controlled Paris they were not united in a strong and centered structure like the Bolsheviks and the Russian Communist Party; nor did they have an appropriate economic and social platform for a new socialist city. Eventually the Communards were crushed by the army of the thenFrench government, and more than 18,000 people died. However, the commune has served as an example for socialist revolutionaries since then. The Russian Revolution in 1917 led by Vladimir Lenin changed Russia from absolutism to socialism. Marxist ideology was implemented in reality for the first time through the Bolshevik Party, which in 1918 changed its name to the Russian Communist Party. The organization of the party was totally centered and directed and controlled by smaller entities such as the Central Committee, Politburo, and Secretary General of the Party. The hardest thing for the Russian Communist Party to do was to have appropriate economic and social platforms that served Marxism effectively. It should also be noted that the economic situation during Marx’s era (1818–1883)—in particular when he wrote the famous Communist Manifesto with Engels in 1848, and the three volumes of Capital during the 1860s—is not the same as the economic and social environment of today, as there have been so many changes in political, economic, and social platforms, as well as in international relations. For China, the victory of the CPC led by Chairman Mao against the old regime, and the establishment of the new regime in 1949, have been praised by the Chinese people. Nevertheless, the challenge has been the same: what are the appropriate economic and social models and platforms that serve China best? In the beginning, it is understandable that China, with Chairman Mao at the top, learned and imitated many Russian models and systems. I think that Chairman Mao interpreted Marxist theory and ideology strictly, and the relationship at the time between workers, capitalists, technology, and innovation were totally different when compared to the present day. Therefore, after Chairman Mao passed away in 1976, there was a big challenge for the new leader of China, Deng Xiaoping. With the coming of Deng Xiaoping, Chinese economic reform was implemented in 1978. Deng proposed that China learn from the example of rich countries and allow workers and peasants to generate new ideas. He said, “otherwise, we won’t be able to rid our country of poverty and backwardness, or to catch up with—still less surpass—the advanced countries.” The Cold War, which began after World War II, stemmed from profound political and economic differences between the Western bloc led by the US, and the Socialist or Eastern bloc led by the Soviet Union. Both sides were afraid that the other side would attack and invade. Therefore, there were proxy wars in many parts of the world. The US collaborated with and instigated right-wing political parties and militaries to control underdeveloped countries in the belief that this could prevent the expansion of socialism. The cold war ended in 1991 when the USSR collapsed and the Russian Federation was established.

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The terminology “Socialism with Chinese Characteristics” and “Socialist Market Economy” were core concepts for Chinese economic reform. And there is a need to interpret and implement Marxist theory in line with the current situation and future trends for the CPC, not only to bring peace, happiness, and stability to the Chinese people, but also to push the international community towards peace, green and sustainable development, and the eradication of poverty, on the basis of negotiation, collaboration, and mutual respect. Therefore, a Community with a Shared Future for Mankind has to be envisaged by all. China has successfully developed its economic and social standards at an astonishing speed over the past 40 years, to make up for lost time due to invasion by Western countries since 1839, the Opium Wars, the Taiping Rebellion, the wars against the Japanese, the Second World War, and the Civil War, which totaled around 110 years. With these sad and painful memories, I think the CPC wants to see the country move forward to meet the aspirations of the Chinese people, to achieve the Chinese dream. In this regard, Shiren Liu of the College of Marxism, Sichuan University of Arts and Science, Dazhou, pointed out in The Philosophical Interpretation of a Community of a Shared Future for Mankind from the Perspective of the Marxist Philosophy that this concept is a new development of Marxist philosophy in the twenty-first century. He confirmed that Marxist theory is still the core of the national ideology and is under great development, because Marxism is an open system. Chinese communism combines Marxist general theory with China’s reality, and constantly promotes theoretical innovation in practice, which is a source of vitality in theory of Marxism. He concluded that a community with a shared future for mankind is the inheritance and development of Marxism to see the world from the perspective of interconnectedness and development and use the positive side of interconnectedness to promote the development of one’s country. However, this concept is a complex one that deserves further research for a better understanding. The term “a Community with a Shared Future for Mankind” is an expression used by Chinese leaders since 2012, from Hu Jintao to Xi Jinping. (In the beginning this concept was translated as community with a common destiny.) Xi Jinping, in January 2017, delivered a speech at the United Nations entitled “Work together to build a Community with a Shared Future for Mankind”: Xi has elaborated upon the idea to make it more systematic and comprehensive. He urged the world community to “pass on the torch of peace from generation to generation, sustain development and make civilization flourish. This is what people of all countries long for; it is also the responsibility of our generation to shoulder. And China’s proposition is: Build a community with a shared future for mankind and achieve shared win–win development.” In my view, the proposal of the Chinese leaders and the CPC to build a community with a shared future for mankind is both an internal and an external commitment for China and the world. The concept has reflected the Chinese will and intention not only to live peacefully with other nations but to stick and walk together to face and solve complicated world economic and other problems and difficulties—because no country can possibly stay aloof by taking good care of itself alone. In February

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2017, the concept was first made part of a United Nations resolution; in March 2017 it was included in a UN Security Council resolution; and in September 2017, the proposition’s underlying principle of achieving shared growth through discussion and collaboration was incorporated in a UN General Assembly resolution on the United Nations in global governance. Finally, the concept was incorporated into a Chinese constitutional amendment in March 2018, with a statement that promoted the building of a community with a shared future. It is interesting to look at the keynote speech by Yang Jiechi, Member of the Political Bureau of the CPC Central Committee, at the 55th Munich Security Conference in February 2019. He stated that “Unilateralism and protectionism have been on the rise; the multilateral international order and global governance system have come under challenge. Our world stands at a crossroads and faces a consequential choice between unilateralism and multilateralism, confrontation and dialogue, isolation and openness. As President Xi Jinping pointed out, multilateralism provides an effective way of upholding peace and promoting development, and the world needs multilateralism now more than ever.” I totally support this statement. It is so strange that during the Cold War China was eliminated from the then world order characterized by Free Trade and multilateralism in the Western bloc. On the one hand, it was because China wanted to close the country to build the proletarian state internally, and feared interference from capitalism from outside. On the other hand, the Western bloc preferred to sanction and isolate China due to the fear of communist expansion. However, with the coming of Deng Xiaoping and his economic model, China became a member of the WTO. China, under the leadership and guidance of the CPC, has learned how to adapt its economy, ideology, and some parts of its social systems to the world order dominated by the US. The result is that its goal to eradicate poverty can be achieved, in parallel with its advanced industrial and technological development over the last 40 years. Today, while China is seeking and proposing a new world order through the building of a community with a shared future for mankind, the US, led by President Donald Trump, on the contrary, wants to isolate itself from the rest of the world, whether democratic or socialist countries, and has staged a trade war against many nations but principally against China, by referring to a trade balance deficit on the US side vis-a-vis other countries. I do agree with the view of Professor Jeffrey Sachs of Columbia University, who stated that “the real battle is not with China but with America’s own giant companies, many of which are taking in fortunes while failing to pay their own workers decent wages. America’s business leaders and the mega-rich push for tax cuts, more monopoly power and offshoring anything to make a bigger profit, while rejecting any policies to make America society fairer.” Yang Jiechi has clearly explained the meaning of multilateralism. He reiterates that it includes, first, the principle of sovereign equality; second, dialogue and consultation; third, the rule of law; and fourth, win–win cooperation. In answer to the above, he emphasized that China wants to do four things: first, to forge partnerships through mutual respect; second, to uphold universal security through mutual support; third, to

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foster global development and prosperity through win–win cooperation; and fourth, to improve global governance through reform and innovation. With regard to the Belt and Road Initiative, I think it is wise for China to use this strategy to push forward its economic development into a greater sphere and an essential tool to make the concept of “a community with a shared future for mankind” a reality—to replace the old world order dominated and now distorted by the US under Trump. I had the honor to be invited by the Chinese government to participate in the second Belt and Road Forum in Beijing in April this year, which so many dignitaries from around the world attended. All the participants anticipated the speech by President Xi Jinping, and we were not disappointed. The theme “Belt and Road Cooperation: Shaping a Brighter Shared Future” directly reflected the concept of a community with a shared future for mankind, while President Xi reaffirmed that “we remain committed to peaceful development and will endeavor to build a community with a shared future for mankind.” As of April this year, 131 countries and 30 international organizations had signed BRI-related cooperation documents with China, according to the official website of the BRI. Personally, I hope to see the idea of building a community with a shared future for mankind move forward steadily by having the BRI be available as an essential tool for all nations, with the principles and practices mentioned above. In whatever way, we should be aware of the current economic situation, which will affect this endeavor. We must prepare and help each other to overcome hurdles. On this point, a report by Baker McKenzie highlights five scenarios for the BRI during the 2020s. One: The BRI continues on its current trajectory. This would see major investment in sectors like power, manufacturing, and railways, with Sub-Saharan Africa being the biggest recipient. The investments in the BRI would be in the range of $910 billion in this scenario. Two: If China decides to drop the path of unilateral investment and turn to collaboration with governments, third parties, private capital, and multilateral development banks, investments in the BRI could soar to $1.32 trillion. Major investment sectors would include energy, railways, ports, and manufacturing. This is the most favorable outcome for China, in the larger scheme of things, as it eliminates political opposition to its projects and promises long-term profits and success for its investments. Three: If China learns from its domestic building boom and focuses on sustainable initiatives, it will allow room for multilateral development banks to invest in the BRI. While this may bring investment in the BRI down to $1.2 trillion, it will make Chinese engineering and construction companies more competitive and financially viable in the longer term. The key investment sectors here would include energy, power, water supply and treatment, manufacturing, and railways, with Sub-Saharan Africa being the biggest recipient. Four: If the trade war between the United States and China persists into the early 2020s, manufacturing may move outside China, and in this case Southeast Asia

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would be the biggest winner of BRI investment. However, the report estimates that BRI investment will fall to $1.06 trillion. Fifth, and last: The doomsday scenario, in which BRI stakeholders stand to lose the most. Assuming the trade war persists into the early 2020s, and the global slowdown intensifies, signatory nations to the BRI may then not want to commit to BRI projects. While the key investments would be in power and railways, the total investment would fall to a mere $560 billion against $1.32 trillion in the most favorable scenario, costing China almost $800 billion worth of BRI investments. Therefore, the ongoing trade war between the US and China becomes important for the BRI’s future investments for the following reasons. First: A few more years of trade war could make protectionism the global norm in the US-dominated world order. High tariffs and weakening exports would also disrupt Xi’s domestic run, slowing down investments in the BRI. Second: Within the BRI ecosystem, protectionism could extend to patented technologies. China, with its capacity-building measures and its export-driven economy, is pursuing dominance in future technologies like electric and hybrid vehicles, artificial intelligence, and 5G. Already, Huawei is the second-biggest 5G patent-owner after Samsung. If the trade war persists, BRI signatories across Europe and Africa may want to invest in local capacity building, thus rendering the BRI pointless. The above analysis may or may not be totally exact, but we should keep in mind that war, in whatever form, gives nothing to humanity. Only peace and win–win cooperation can bring prosperity and happiness to mankind. To conclude, I think China has done extremely well in forging Socialism with Chinese Characteristics, a community with a shared future for mankind, and the Belt and Road Initiative to sail the Chinese ship through stormy seas of economic, social, and political difficulties for 70 years. At present, China stands as one of the world superpowers in terms of economic and military might. But I am confident that with the leadership of the CPC and President Xi Jinping, China will always choose the peaceful path and means to develop its society and to deal with other countries with mutual respect in a win–win approach. Nevertheless, I also believe that China will not bow to any country that tries to force it to accept superiority or unfair treatment like in the past during the colonial period. I would beg every side to be patient and altruistic, and to use wisdom to try to understand the great concept “a community with a shared future for mankind” as there is only one world for us to live in together as brothers and sisters. Thank you.

Chapter 6

“China’s 70-Year Development and the Building of a Community with a Shared Future for Mankind”: An Afghan Perspective (I) S. Sadat Mansoor Naderi

Thank you for the invitation to attend this international symposium. It serves as an important platform to reflect on China’s development over the past decades and to discuss together how we can advance toward a better shared future. Thank you to the People’s Republic of China for hosting the event and inviting me to this symposium and the International Expo here in Shanghai. Today I will make a few remarks based on the experience of Afghanistan. I am a proud Afghan citizen, as well as a proud global citizen. Afghanistan, a country with a long history and one that epitomizes some of the major challenges of our generation. China and Afghanistan have a friendship that gets stronger every day, week, month, and year. Before I begin, allow me to recognize the People’s Republic of China’s recent anniversary: 70 years since its founding as the People’s Republic of China. This momentous anniversary is a time to celebrate and reflect on the enormous progress this country has made in many areas—including economic development, poverty reduction, and international trade and enterprise. It is an honour to be here in China in this historic year. Ladies and gentlemen, Sitting at the crossroads between East and West, Afghanistan has a rich cultural history. Afghanistan is one of China’s western neighbours and enjoys a positive relationship with it built upon the principles of the “shared future” paradigm. Afghanistan is emerging from decades of war which is a result of—among other things—geopolitical factors. With approximately one-third of the population living below the poverty line there are indeed serious issues that need to be addressed. Peacebuilding, and the pursuit of peace, is the foundation stone required for development and poverty

S. Sadat Mansoor Naderi (B) Kabul, Afghanistan e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_6

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reduction in Afghanistan. We are making advancements in this respect, including holding our recent national election which was conducted relatively peacefully. The concept and framework of “a community with a shared future for mankind” can offer us new hope in finding lasting solutions. In the modern era, no country can go it alone. We are linked by a common destiny and future. The security and wealth of each individual, household, village, city, country, and region are now connected more than ever before. The concept of “a community with a shared future for mankind” challenges us to think differently and develop new tools for regional and global peace and development. Constructive dialogue, respect, and consultation must be the basis to resolve any conflict. The sovereignty of countries and their treatment as equals within the international geo-political context is the basis for effective regional engagement and action. This concept also reaffirms that human development and security are interlinked and must be tackled together. Regional economic imbalances, as well as inequality within countries, are two key issues that can better be addressed as a collective responsibility when we are driven by “our shared future.” How and where investments are made—and who they ultimately benefit—are of critical importance. Ladies and gentlemen, In preparing these remarks I have reflected on China’s significant progress over the past 70 years. I thought to myself, what were some of the key drivers that enabled China to develop at such a rapid pace? It seems to me that there are three key areas which have been catalysts for this development journey. First, promoting economic development and creating livelihood opportunities for all. China has significantly expanded its manufacturing sector over the past decades and can be considered the “production hub” for the world. More recently, the Belt and Road Initiative is underpinning China’s export-led approach to economic growth and regional stability and cooperation. Afghanistan is strategically located along this corridor. The strategic value of looking beyond national borders and connecting to global markets is a lesson from China, one which Afghanistan is also implementing, despite being landlocked. Investment in infrastructure along this corridor is crucial to unlocking the potential of Afghan-led development and prosperity, which will benefit the entire region by accelerating economic growth. Second, mutual learning and exchange across the country and with other countries seems to have been an important catalyst for China’s development in recent times. Our planet is so interconnected—socially, politically, culturally, and ecologically— and so we must understand each other better and act together. We must preserve and respect the diversity of civilization as this is also a source of our connectedness to this earth, our histories, and to each other. China has shown that opening up a country to the world can bring enormous benefits for its citizens and for mankind as a whole. Third, infrastructure investment. China has shown the importance of investing in critical infrastructure projects to facilitate human and economic progress. Investments in ports, roads, and airports reap enormous dividends for the productivity of societies. At a time where infrastructure investment levels are decreasing in many

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countries, China is showing the world that ambitious and targeted infrastructure investments are essential to expanding opportunities for mankind to advance. More recently, it is pleasing to see China’s massive investments in and prioritization of green infrastructure, such as solar panel farms to harvest the energy of the sun to generate electricity. Again, we see China being a global leader at the forefront of technological and infrastructure investments, which is commendable. Ladies and Gentlemen, To conclude, let me thank the organizers once again for inviting me to share my ideas and reflections on “China’s 70-Year Development and the Construction of the Community with a Shared Future for Mankind.” In this historic year, it is opportune for us to reflect on China’s 70-year experience and to see what others can learn, including us in Afghanistan, with the goal of making a real improvement in the lives of all peoples across our shared planet. There is no clear “blueprint” for a country to follow. Therefore, symposiums like this one are important to share experiences and lessons learned and generate new ideas and ways of working to advance our collective efforts. Thank you.

Chapter 7

“China’s 70-Year Development and the Building of a Community with a Shared Future for Mankind”: The United Kingdom Perspective Martin Jacques

In 1949, no one could possibly have comprehended that China’s Revolution would, over the next seventy years, utterly transform the world. That is hardly surprising. Ever since the early nineteenth century, China had been in remorseless decline, divided, partially colonised, hopelessly inward looking, left behind by the economic revolution that had transformed Europe, the United States, and Japan. China had become virtually invisible to rest of the world, largely forgotten, its grand history locked away in a box, its future potential dismissed. No one could have guessed what lay ahead. The 1949 Revolution was part of a much wider global phenomenon. When the United Nations was formed in 1945, with much of the world still colonised, it had just 51 member states, compared with 193 today. India, for example, only gained independence in 1947. The most important global trend of the period between 1945 and 1965 was decolonisation, with China’s Revolution being an integral part of that process. Decolonisation marked the beginning of the enfranchisement of that great swathe of humanity who had been colonised and subjugated by the West and also Japan. For almost two hundred years, the world had been run by the West. That state of affairs was to continue to this day, albeit in a much weakened form, but decolonisation and national liberation created the possibility that, in time, the majority of the world’s population could become the decisive player in global governance. That prospect is now fast becoming a reality. In the mid-1970s, the developing world, home to 85% of the world’s population, accounted for only one-third of global GDP; today it is 60%. The key factor in the transformation of the developing world has been China’s rise. It is demographically the largest. It is economically the most advanced. It has been an exemplar of modernisation, demonstrating to others what could be achieved. It has M. Jacques (B) Asian Research Center, London School of Economics and Political Science, London, England e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_7

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been by far the most innovative, rather than aping the West or being beholden to it, instead showing that there are diverse paths to modernisation. China is both an organic part of the developing world and also its leader. Its relationship with the developing world is the strategic axis of its foreign policy, as is graphically illustrated by the Belt and Road Initiative. Indeed, the latter, while neither being nor purporting to be an alternative international system, nonetheless powerfully demonstrates what a new kind of post-Western international system might be like, in terms of its composition, its very different priorities, and its norms and values. We are witnessing the beginning of a new era, where the majority of the world’s population—those that live in the developing world—will increasingly become the arbiters of our global future. New norms and values will become ascendant. Development will be the predominant theme of the present century. New institutions will be created, both regional and global. It is in this context that we should understand the idea of “a community with a shared future for mankind”. The rise of the developing world, with China at its core, creates the conditions for a more inclusive and democratic world. The fact that a growing majority of the world’s population is now involved in the process of modernization means that they increasingly face common problems which require common responses, the classic and overarching example of this being the threat posed by climate change. The idea of a common destiny for mankind, indeed of being able to think in such holistic terms, lies deep in Chinese history. Unlike the West’s overriding preoccupation with the nation-state, the ancient Chinese concept of tianxia, based as it was on the notion of the entire world, recognised no such boundaries. A concept of the world lay at the very heart of ancient China’s way of thinking. The fact that China was invisible until 1949, and in key respects until 1978 and beyond, meant that the great majority of the world knew very little about it. They knew all about the West, but virtually nothing about China. It takes a very long time for that kind of deficit to be overcome. There is still huge ignorance about China, and such ignorance can easily turn into prejudice. But as China has opened up, so the world is also experiencing something of a crash course in getting to know China. There are, of course, plenty of doubts and negative reactions. That is inevitable, as China is so different to a West with which the world is already so familiar and which hitherto has been the world’s default mode of thinking. But as the world gets to know China better, it is on a voyage of discovery. We will surely come to see the twenty-first century as the Chinese century, not simply because of China’s economic rise and growing influence (that argument is already familiar) but, rather more fundamentally, as the moment when the modern world became familiar for the very first time with Chinese civilization and its novel characteristics: China as a civilization-state, its distinctive relationship between the state and society, its governing system and so forth. Familiarity with Chinese civilization will teach the world about civilizational difference and diversity, that modernity is plural rather than singular, that the Western way is but one way and certainly not the only way. Nor is this simply a historical matter. China’s extraordinary rise draws on the country’s civilizational legacy, but it is also novel and highly innovative. Reform

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and opening up, while rooted in the close historical relationship between the state and society, was a hugely creative response to the problem of China’s development. Without doubt, it is the world’s most influential and successful economic strategy since 1945. China has been criticised for its failure to provide public goods, though much less so since the AIIB and Belt and Road Initiative; but reform and opening up is precisely such a public good, a hugely important offer to the countries of the developing world on how to tackle the challenge of their own development. I would go further; I would argue more generally that as other countries become increasingly familiar with Chinese civilization and history, this constitutes an extraordinary gift to the rest of the world that can only enhance humanity’s knowledge and capacity. Just as China has been a wonderful learner, especially during the reform period, so the rest of the world will be enriched by learning about and from China. Of course, China’s approach cannot be blindly copied or transplanted: it has to be adapted to a very different set of circumstances and conditions and applied in a creative manner. China has always been acutely aware of its exceptionalism, unlike the Soviet Union of old or indeed the United States: its extraordinarily long history and continuity, its sheer size, and its distinctiveness as a civilization-state mean that China can never be a model that can or should be blindly imitated or copied. But nonetheless, with this important stricture, the experience China has gained in the course of its own development has a huge amount to offer other developing countries. Indeed, while China’s experience is a source of both ideas and know-how for developing countries, its remarkable achievements at the same time increasingly serve as an inspiration for them.

Chapter 8

“China’s 70-Year Development and the Building of a Community with a Shared Future for Mankind”: A Bulgarian Perspective Zahari Mihailov Zahariev

As strange as it may seem, because it refers to a country with 1 billion and 300 million inhabitants, the name of Bulgaria is extremely popular in China. I have become convinced of this not only through contacts with officials of the PRC, with diplomats from the Ministry of Foreign Affairs and the CCP’s International Affairs Department, but also in meetings with ordinary citizens of this huge Asian country. And this is not accidental. All Chinese, as a rule, begin their answer to the question of what they know about Bulgaria and what their attitude to it is with one fact, which is that Bulgaria was practically the first country to recognize the PRC in 1949, after the Soviet Union which no longer exists. It should be noted that, over the entire 70-year period, despite the changing international situation in the world in the second half of the 20th and the beginning of the twenty-first century, bilateral relations fall under one common constant denominator. This is goodwill, the understanding that conjuncture should not predetermine relationships and destroy the mutual desire for constructiveness in Bulgarian-Chinese relations. Or rather, figuratively, they should not be placed in the “refrigerator” of interstate ties. This conclusion is valid even in such critical periods as the rupture of relations between the PRC and the member countries of the Warsaw Treaty and the CEC during the Cultural Revolution in China. Even then, what the Bulgarian propaganda machine produced for China was largely to deny such an approach for solving domestic political and social economic problems in a communist country at that time. Nowhere in the Bulgarian media did a publication appear containing any general summaries about China or the political weight of this country in the world Z. M. Zahariev (B) Bulgaria National Association for the Belt and Road, Sofia, Bulgaria e-mail: [email protected] European Academy for Sciences, Culture and Humanities, UNESCO, Paris, France Slavonic University, Sofia, Bulgaria © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_8

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or the significance of what is happening in China for the future of socialism and the world at large. Now we can definitely say that the Bulgarian-Chinese relations are developing in a completely positive and constructive way. This is due both to the important changes that have occurred in the PRC and the world over the last 30 years, as well as to the important changes and problems in the development of Bulgaria itself. During these 30 years of bilateral communication, we have witnessed China’s significant growth, which proved to be a major, and to a large extent determining, factor in the development of world civilization of the twenty-first century. In fact, China has become a model for successful socio-economic, scientific, and technological development, at the same time harmonizing the often diverse interests of different social groups, which in their entirety form the appearance of the nation. The facts are impressive. For example, while the national income per capita in China in 1951 was about US$20, today it is US$10,000. Or, if we look at the statistics of the time, for which archival sources can now be used, we can see that around 75% of China’s population in the early 1950s lived below the poverty line, according to UN criteria. Today, China is a unique example of social prosperity because only 4% of its population is on the brink of poverty. Therefore, the goal set by the Chinese leadership to fully eradicate poverty in 2020 is completely realistic. Or consider another example in the field of scientific and technological revolutions. According to expert studies related to the use of the achievements in the field of artificial intelligence by 2020, they will be realized at 30% in the economy and governance of China. The United States will account for 17% of these forecast statistics. Germany accounts for 12%, and Russia for 3%. A big part of the nation’s development has been technological. China’s digital economy accounts for over 34% of the country’s gross domestic product. It is also home to some of the largest technology companies in the world, including the ecommerce giant Alibaba and the tech conglomerate Tencent. That’s thanks to an internet boom over the years. The number of Internet users in China at the end of 2008 totaled 298 million—or just over 22% of the population at that time, according to official statistics from the China Internet Network Information Center (CNNIC). That number rose to 854 million at the end of June this year, or over 60 percent of the population. Just over 99% of Chinese web-users access the Internet on their mobile devices, according to official government statistics. In the U.S. just over 92% of Internet users access it on mobile devices, separate statistics from eMarketer show. That mobile focus in China has helped companies roll out products quickly and on a large scale. And China’s rise is threatening America’s historically strong position in technology. “We have a technology grip from the U.S. that is actually being torn apart by China at this point,” says Eoin Murray, head of investment at Hermes Investment Management told CNBC’s “Squawk Box Europe.” But the rise of China’s tech industry has been tarnished by allegations of intellectual property theft and claims that the country’s technology companies have been copycats. Whether it is Chinese-designed phones that look similar to Apple’s iPhone,

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or Chinese search or e-commerce companies being compared to Silicon Valley’s Google or Amazon, China has for a long time carried the image of a tech follower. But that image is changing. “For years, Silicon Valley looked down on China tech and believed it was only copying. But today, there is awareness that China is innovating and getting ahead in certain tech arenas,” argues Rebecca Fannin, author of Tech Titans of China. There are even signs that some of America’s biggest tech firms have been imitating some Chinese companies now. Facebook released a short video app called Lasso last year to fend off competition from TikTok, an app owned by Chinese firm Bytedance. TikTok has made major inroads with U.S. consumers. Over the past few years, Beijing has publicly stated its ambitions to develop critical future technology, such as artificial intelligence and the next-generation of super-fast mobile networks known as 5G. Even before the U.S.–China trade war started, Beijing said in 2017 that it wanted to become a world leader in AI by 2030. Some of China’s biggest companies, including Alibaba, Huawei, Tencent, and Baidu, are all investing heavily in AI. Just last week, Alibaba followed Huawei’s footsteps and released its own AI chip. Beijing has also said that semiconductors will be a key area of the Made in China 2025 plan, a government initiative that aims to boost the production of higher-value products. China wants to make more of the chips it uses. Meanwhile, Huawei, the world’s largest maker of telecommunications equipment, has secured more commercial 5G contracts than its rivals Nokia and Ericsson. 5G promises super-fast data speeds and the ability to support new technologies like autonomous vehicles. Technology has been a key part of the ongoing U.S–China trade war, with one company in particular, Huawei, being caught in the crosshairs. The Chinese technology giant has been put on a U.S. blacklist known as the Entity List which restricts its access to American technology. But this has only sharpened its focus on trying to make more of the components and software it needs. The company has been releasing its own processors for smartphones and recently unveiled its own operating system, in a bid to become less reliant on the U.S. Washington’s response to the rise of China’s tech industry has been about containment rather than trying to stay ahead, according to one expert. “So far it has been primarily focused on slowing China down and preventing critical technologies from flowing to Beijing,” Adam Segal, one of the authors of CFR’s report, told CNBC. “While there is a growing recognition in Congress and in the White House that the U.S. needs to do more to accelerate innovation at home, the response so far has fallen short.” These are eloquent enough facts that objectively demonstrate China’s advances in scientific and technological progress and new technologies. This is what we can say about China. But now let’s see the other side of the “coin,” the situation in Bulgaria. Here we see that history does not always go forward. The last 30 years can hardly be connected with anything constructive in the development of our country. I could say this, albeit to a lesser extent, about all former socialist countries. Now Bulgaria is a country that is trying to re-industrialize, that is, to re-attain the level of 1989 so that it can fit into the socio-economic and political realities of the twenty-first

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century. From this point of view, the Chinese example and the Chinese experience are of paramount importance to our country. Therefore, it is quite logical that if there is consensus on a foreign policy problem in Bulgaria, then this consensus can be attributed precisely to our constructive and nationally responsible attitude to the dynamic development of our relations with the PRC. This is confirmed by the activities of the inter-parliamentary friendship group between the parliaments of the two countries, and by the frequent visits, mainly from Bulgaria to China, of heads of state. This is confirmed further by the constructive attitude of Bulgaria towards the new format, established in 2011, for the comprehensive development of relations between China and the countries of Central and Eastern Europe, “16 + 1.” I have repeatedly said that this format, which, after the accession of Greece, is already “17 + 1,” has become an experimental platform from which the idea of the Belt and Road Initiative, formulated by Chinese President Xi Jinping, originated. In this connection, the signing of the joint document between the Presidents of Bulgaria and China on the strategic nature of the relations between the two countries was a quite logical result. However, we should not fall into unnecessary euphoria on this subject, because the signing of this important document was long overdue. We are not among the first; we are not even in the middle of the EU Member States who have signed similar documents with China. These are France, Germany, Italy, Austria, and more. We can give examples of increasing Bulgarian exports to China and Chinese imports into Bulgaria. The figures in this regard are both comforting and at the same time disappointing, when compared to other countries in Central and Eastern Europe. On the whole, Bulgarian–Chinese relations remain subject to good intentions, strong slogans, and proclaimed goals. In general, they are too hypothetical and remain related to an uncertain future, rather than being tied to a new reality in our country’s foreign economic and cultural policies. It is also very important to focus our attention on seeking new approaches to the problem of Chinese investments in Bulgaria. Indeed, there are some encouraging steps in this direction. They are mainly related to the provision, by the Chinese Development Bank, through our Bank for Development, of a credit line for the development of economic relations between the two countries. This opportunity was made available by the Chinese state, which has provided over a billion euros in resources. However, if we ask the question of how much of these funds have been utilized, the answer is unsatisfactory. So far, only 25–30 million euros have been used on this line. Even more concerning is that this money is directed to structures that have no significant contribution or even interest in the development of economic ties between Bulgaria and China. These are companies operating in sectors that are too far away from both Chinese export interests and the prospects of prospective scientific and technical cooperation. At the same time, projects that could actually drive forward the wheel of Bulgarian–Chinese economic relations are blocked. This applies first and foremost for companies that have entered into some form of cooperation or partnership with Chinese economic structures. There are powerful Chinese companies who are ready to risk by investing in our country and participating in the construction of new Bulgarian economic infrastructure. This is especially true for sectors

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that are extremely important for Bulgaria, such as transport infrastructure, high-tech production, the creation of modern technology parks, tourism development, etc. Bilateral trade is also developing at a very timid and unsatisfactory pace. I will give another example related to the Bulgarian Development Bank, which is under the control of the Council of Ministers. Ten years ago, China opened a US$50 million line of credit to stimulate foreign trade between the two countries and, in the first place, to promote Bulgarian exports to the PRC. It sounds strange, but no more than 4 percent of that money was used. About five or six years ago, China increased the amount of the credit line from 50 to 100 million, because our side expressed the view that the initial sum was very small to stimulate our economic ties. The same story was repeated after the release of the 100 million. Hence the fear that any credit line provided, whether for foreign trade or for serious investment opportunities, even if it is US$ 10 billion, it will be of no use if it does not provide an effective mechanism for using this resource for its intended purpose and substance. The other danger is the bureaucracy of the Bulgarian government. Existing corrupt practices are also a risk. This is the real picture today. On the one hand, there is a good political development and a climate of trust and mutual interest in the relations between Sofia and Beijing; on the other hand, in the area of concrete effects and practical results, we are lagging behind very seriously from our neighbors in the Balkans and from the countries of Central and Eastern Europe. Not to mention the countries that are crucial for the development of the EU and the European Economic Area. I think we should not, however, fall into unnecessary pessimism, but work to maximize the potential of Bulgarian–Chinese relations. I would like to point out that the discrepancy that I have discussed has given rise to the creation of a number of non-governmental structures, which work in the field of Bulgarian–Chinese relations and represent the interests of certain professional groups in Bulgarian economic life. These structures perform two functions. First, they give a “secondary respiration” to Bulgarian–Chinese ties. Secondly, they play the role of a “spindle” for the overly “immobilized” flesh of the Bulgarian state. Two years ago, we created the Bulgaria National Association for the Belt and Road and embarked on the path of uniting the forces of civil society. Along with this, we set ourselves the task of using the extremely powerful resources possessed by various private economic entities, as well as the Bulgarian Chamber of Commerce and Industry and the Bulgarian Industrial Association. In the scientific field we have included BAS and leading universities such as the Technical University, the University of National and World Economy, the Agrarian University of Plovdiv, and the Council of Rectors of Bulgarian Universities. The interest in culture and spiritual life has led us to include in our national association the leaders of all major creative unions in the country, as well as some individual cultural institutions, such as the Ivan Vazov National Theater. It seems to me that the way out of the problems in the Bulgarian–Chinese relations, or figuratively speaking, the “bottlenecks” in this respect, lies in the first place in the harmonization of the relations between the civil sector and government bodies. Only in this way will we be able to become constructive, positive, and maximizing

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our potential partners of the PRC. In China, with another political and socio-political model, this harmonization works particularly well. This is demonstrated by China’s high performance and remarkable achievements in every sphere of modern society. If we have to describe in one word the most accurate definition of the course so far, the prospects and the need for what needs to be achieved in Bulgarian- Chinese relations, it comes down to the word CREATIVITY. It is essentially creativity that meets all our requirements and expectations, as well as the objective need for a more active presence of the full potential of civil society in these relationships.

Chapter 9

“China’s 70-Year Development and the Building of a Community with a Shared Future for Mankind”: The Shanghai Cooperation Organization (SCO) Perspective Vladimir Zakharov

More than a month ago, China celebrated the 70th anniversary of the founding of the People’s Republic of China. In a relatively short period of history, China has become a world leader in economic development. As its economic potential is gradually transformed into political potential, we can see that China has become a prestigious world power, which is also consistent with its status as a permanent member of the UN Security Council. China’s growing influence in the world is playing an increasingly important role in solving regional and global problems, but it is also bringing many new challenges to China as it moves closer to the centre of the world stage. Fundamental changes in the global governance and the international order are accelerating. Countries are increasingly interconnected and interdependent, and international forces are becoming more balanced and equal. The pursuit of peace and development has become the theme of this era. Economic globalization has led to the redistribution of global resources and a profound adjustment of the international landscape. Meanwhile, the informatization of the society has brought the world closer together, and the exchange and integration of cultures has further promoted cultural diversity. These changes show the direction in which history is moving. They are relevant to the well-being of the people around the world and need to be safeguarded by us together. At the same time, global instability and uncertainty are on the rise: economic growth is deficient in momentum, the gap between the rich and the poor is widening, a series of acute problems are plaguing many regions, non-traditional security threats such as terrorism, cybercrime, and climate change are spreading across the globe, and we human beings are facing many common challenges. V. Zakharov (B) SCO Secretariat, Beijing, China e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_9

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As a permanent member of the UN Security Council and the world’s second largest economy, China has shouldered its responsibilities in line with its position in addressing regional and global issues and made its due contribution to the peace and harmonious development of the international community. To this end, President Xi Jinping of the People’s Republic of China has put forward an important initiative of building a community with a shared future for mankind. He proposed simultaneous efforts in political, security, economic, cultural, and ecological areas to build an open, inclusive, clean, and beautiful new world of lasting peace, universal security, and common prosperity. Thus, China offers the world a new model of human development. That is, the world should develop in a peaceful way. With the continuous expansion of cooperation between China and other countries of the world, the concept of building a community with a shared future for mankind has been increasingly recognized and supported by the international community. Peace, development, cooperation, and mutual benefit are the trend of the times. Facing profound changes in the international landscape and taking into account the objective needs of all countries, the countries of the world must work together to promote the establishment of a new type of international relations with cooperation and mutual benefit at its core.

9.1 The SCO Is a New Model for World Development Conceptually, the idea of building a community of a shared future for mankind is very similar to the main principles of the SCO, that is, the SCO’s principles of nonalignment, non-targeting, and openness to other countries and organizations, as well as the principles of equality and mutual benefit, and solving all problems through mutual consultation. The SCO aims to establish a democratic and equitable framework for international relations. Its development potential lies in the fact that all member states are equal and there is no domination, pressure, or coercion within the organization. The SCO is an example of how countries of different sizes, levels of development, cultures and national traditions can coexist in harmony. It has created conditions for dialogue among its member states on coordinated development and achieving common goals and values. The most attractive feature of the SCO is the “Shanghai Spirit” that champions mutual trust, mutual benefit, equality, consultation, respect for the diversity of civilizations, and pursuit of common development. The SCO fully recognizes the Qingdao Summit’s profound interpretation of the concept of a community with a shared future for mankind: “The member states reaffirm their commitment to the purposes and tasks of the SCO Charter, to the SCO Development Strategy until 2025, to promoting policy coordination, facilities connectivity, unimpeded trade, financial integration, and people-to-people bonds, and to developing cooperation in security, energy, and agriculture. We should promote

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a new type of international relations based on mutual respect, fairness, justice, and win–win cooperation, and establish a common vision of building a community with a shared future for mankind.” At the subsequent Bishkek Summit, the leaders of the member states reiterated this position: “The member states stress the importance of building a new type of international relations based on mutual respect, fairness, justice, win–win cooperation, and establishing a common vision of building a community with a shared future for mankind.” Therefore, the SCO can be regarded as a model, which has creatively established a new type of open international relations. A case in point is its successful mechanism for regular multilateral consultations on key regional and international issues. This has provided a good platform and common basis for resolving issues involving the vital interests of all parties. The SCO has established partnerships with other regional and international organizations, first and foremost with the United Nations. In short, the SCO has become an influential international organization with a growing voice on the international stage. Many countries are looking forward to cooperating with the SCO. The activities of the SCO are of particular relevance in today’s world, where the fight against terrorism, the restriction of the spread of extremist ideology, and the prevention of the incitement of terrorist acts are becoming increasingly urgent. Particularly concerned about actions in this area, the SCO member states are making every effort to prevent social radicalization and any form of extremism, racial intolerance, and xenophobia, and have accumulated some experience which could provide some reference for other regional and international organizations regarding relevant activities. The constructive partnership among the SCO member states allows them to take advantage of their geographical proximity and economic complementarity to further explore cooperation projects in various fields and disciplines. All of this is fully in line with the development goals and values set by the United Nations, namely, peace, development, equity, justice, democracy, and freedom. It is also closer to the reality of current international relations. Interaction and cooperation in this regard are of strategic importance for ensuring the stability and security of the Eurasian space and the world, since the area covered by the SCO was once the cradle and dissemination centre of almost all major civilizations, religions, and cultures, shaping the ethos of the modern world and having a great impact on the development of all areas of international society including politics, economy, culture, and morality. With the accession of India and Pakistan, the SCO has become the largest and the most universal regional organization in the world. The SCO is also the only organizational mechanism and platform for dialogue among major powers in the area. Located at the centre of Eurasia, the SCO member states, together with the SCO observers and dialogue partners, constitute a framework for extensive cooperation in the Eurasian space.

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Finally, I would like to point out the close relationship between the SCO and the People’s Republic of China. I want to stress that China has played a constructive role in developing the SCO. Firstly, actively supporting the initiative of establishing the SCO, China became a founding member of the organization. The SCO was the first international organization to declare its establishment on Chinese territory, with its headquarters located in the capital of China. China is also the birthplace of the world-renowned “Shanghai Spirit.” At present, Beijing’s views need to be taken into account in solving relevant issues in the region and around the world. As a permanent member of the UN Security Council, China’s role in maintaining international security and stability is of vital importance to the world. Secondly, I would like to point out that the SCO is indeed a new type of international organization. It represents a future model for building a balanced and effective system of international relations and embodies the concept of a community with a shared future for mankind. World civilization is facing new challenges. Building a community with a shared future for mankind is one of the ways to deal with these challenges, with the SCO playing a key role in reshaping the world. On this occasion of the 70th anniversary of the founding of the People’s Republic of China, on behalf of the SCO Secretariat and myself, I would like to extend my heartfelt congratulations to China on this great festival and wish all Chinese friends a happy holiday!

Chapter 10

“China’s 70-Year Development and the Construction of the Community with a Shared Future for Mankind”: The Perspective of the Baha’i International Community United Nations Office Bani Dugal

The distance traversed by the Chinese people from the founding of the People’s Republic of China in 1949 to the present is significant indeed. The scale of development and the number of those whose living conditions have been tangibly raised has few historical equivalents. Equally notable are the social questions that have been and are still today being navigated. How does a society choose which elements of traditional culture contribute to the common good and should be retained, and which are detrimental and should be allowed to fall away? How can the economic conditions of a people be steadily improved without becoming forgetful of the many non-monetary aspects of human well-being? These are questions that every country faces. And as it seeks insights into such dynamics, China has the opportunity to exercise not only economic leadership, but social, moral, and humanitarian leadership as well. In walking its own path of development, China can give conscious attention to assisting other nations and cultures to achieve the greatness which might be theirs, in the context of an emerging global civilization. Such an outward looking orientation is indispensable, for efforts to construct a growing community around a vision of a shared future for humanity can never be the provenance of one country alone. At the heart of such efforts is a grand project that has long been the dream of Chinese society and many others as well: a rational global order that connects all the peoples of the world in peace, justice, respect, and affection. Considering the development of the Chinese nation within such an all-encompassing framework is commendable indeed, and the Baha’i International Community is pleased to join an exploration of how this ideal resonates in different cultures, civilizations, and religions around the world, however it might be expressed. B. Dugal (B) Baha’i International Community United Nations Office, New York, USA e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_10

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The features of China’s path of development over the past 70 years are numerous, but four stand out as particularly worthy of consideration. First, there is a notable level of cohesion in the machinery of Chinese governance. Many systems of governance are grounded in patterns of internal competition and confrontation, in-fighting, and the conflicting interests inherent in check- and-balance modes of social organization. Such systems, while designed to prevent the abuse of power and the overconcentration of authority, can fall prey to fragmentation and incoherence. The cohesion of the Chinese model allows action, when agreed upon, to be taken decisively and with resolve. Second, governance in China tends to be based on models of consultation and collective decision-making, rather than competition and confrontation. Of course, no nation is entirely free from the tendency to advance some interests at the expense of others. Yet China’s affinity for collective vision and action is, itself, conducive to fostering social harmony and cohesion. And when arising within a context of justice and respect, that harmony is both a driver and an outcome of authentic development. Third, Chinese culture has long placed great importance on advancing the common good and ensuring the well-being of the collective. Reciprocal connections between the good of the part and the good of the whole are necessary for the healthy advancement of any society. Central to China’s path of development has been an exploration of how individual flourishing can be realized through fulfillment of the collective interest. Finally, building increasing unity of thought and understanding among Chinese citizens has been a point of emphasis. This has been an explicit objective of the government, with officials at various levels taking part in officially organized studies, conferences, tours, and dialogues. Of course, for unity of thought to be beneficial, it must be an expression of the aspirations of a population responding to its own realities and possibilities, and not the product of external imposition. But to the degree that people’s genuine aspirations are truly aligned with one another, unity is one of the most powerful drivers of lasting and transformative progress. These factors have contributed to progress in various areas, not the least of which being economic development. Within the context of the United Nations’ Millennium Development Goals, to take one example, some 470 million individuals were lifted out of extreme poverty between 1990 and 2005. Yet, welcome as these steps were, the Chinese development experience reinforces one central truth as emphatically as the Western one did: that material advancement alone, unmoored from spiritual and moral foundations, is not only unsustainable, but ultimately illusory. It can be seen that even the most technologically and economically advanced countries of the world today, whether of the East or the West, are being assailed by destructive social forces such as materialism, self- interest, and prejudice. These, in turn, are associated with a multitude of social ills, ranging from poverty and crime to corruption and hypocrisy, deterioration of the natural world to disintegration of the social fabric, conflict and hostility to alienation and indifference. Chinese culture has long upheld the importance of good character and moral virtue in the conduct of human relationships, rather than assuming social life to be nothing more than an arena for economic transaction. The Chinese experience has been one

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of seeking to find the right relationship among personal moral betterment, economic development, and social transformation, without choosing one to the exclusion of the others. This has provided the Chinese people with a measure of protection from certain forms of excess. Yet to uphold high ideals and to become their embodiment are not one and the same. It is only to their credit, then, that many Chinese are seeking to build ever greater coherence between stated ideals and the lived realities experienced by so many at the local level. As China strives for ever more holistic models of development, fundamental questions increasingly assert themselves. What is the purpose of development and what patterns of life lead to true satisfaction and fulfillment? What relationships with the natural environment are needed to ensure individual and collective flourishing? How are new technologies to be approached thoughtfully and their social impacts consciously chosen and managed? How are different cultures not only to coexist, but to collaborate in building new patterns of life better for all? Questions such as these will take on greater significance in the days ahead. And insights that are gained through the ongoing efforts of the Chinese people will be of benefit and relevance to populations around the world. To speak of a community with a shared future for mankind is to acknowledge the many pragmatic ties that increasingly link the lives of the people of the world. But beyond this, to speak of a shared global future is to acknowledge that humanity is one family. For Baha’is, the oneness of humanity is the defining feature of the current stage of social evolution. “Ye are the fruits of one tree and the leaves of one branch,” wrote Baha’u’llah in the nineteenth century. In an age of intense political division and rivalry, he declared, “The Earth is but one country and mankind its citizens.” The premise that humanity constitutes a single people finds wide acceptance at the level of principle. Indeed, people around the world—particularly the young—increasingly cry out for societies that are more unified, just, and civil. Diverse populations are mixing on unprecedented scales and the world grows more interconnected and interdependent by the day. Yet dominant currents in societies everywhere are pushing people apart, not pulling them together. As the world governing body of the Baha’i Faith, the Universal House of Justice, recently wrote: Humanity is gripped by a crisis of identity, as various peoples and groups struggle to define themselves, their place in the world, and how they should act. Without a vision of shared identity and common purpose, they fall into competing ideologies and power struggles. Seemingly countless permutations of “us” and “them” define group identities ever more narrowly and in contrast to one another. Over time, this splintering into divergent interest groups has weakened the cohesion of society itself. These challenges demonstrate that movement toward a truly shared future will require increasing unity of thought, action, and purpose at every level. Social institutions need to foster a sense of shared identity and common purpose among the population. Similarly, they must unequivocally renounce the practice of stoking racial, religious, or other tensions for political gain. Communities need to foster a culture of universal participation in the affairs and decisions of society, and actively include groups that were excluded in the past. And individuals, honestly searching the depths

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of their own hearts and consciences, need to continually expand the bounds of friendship and bring to bear the moral courage necessary to dismantle prejudice and bigotry in every form they may take. It should be noted that the diversity of the human family, far from contradicting its oneness, endows it with richness. From this perspective, unity contains within it the essential concept of diversity. Indeed, this is what distinguishes it from uniformity. Equally crucial is a robust and authentic orientation towards justice. For without an unbending commitment to justice, calls to unity can become another guise for oppression and tyranny. This anniversary year affords an occasion to review progress that has been made, and to identify opportunities for further advancement. It also provides a moment for the Chinese people—young and old, women and men, humble and wealthy, laborers and leaders—to explore how the endowments unique to their particular history and culture might best contribute to a flourishing global civilization. Given the influence that they are to exert on the destiny of humanity, this is an important discussion indeed. The Chinese people are highly praised in the Baha’i writings. One of the early leaders of the Baha’i Faith referred to them as “truth-seeking” and “prompted with ideal motives.” From among them, he declared, can be raised “such divine personages that each one of them may become the bright candle of the world of humanity.” May these capacities be released in fuller and fuller measure, and may China set an example to follow in providing for the well-being and advancement of all members of the human family.

Chapter 11

“China’s 70-Year Development and the Building of a Community with a Shared Future for Mankind”: An Afghan Perspective (II) Mohammad Yousuf Rahnaward

Ladies and gentlemen, Good morning! I am very happy to attend the International Forum on China’s 70-Year Development and the Construction of the Community with a Shared Future for Mankind and today I am also among the audience and I would like to thank the National Institute for Global Strategy and the Chinese Academy of Social Sciences for arranging and holding this meeting and for inviting me for this significant event. Let me congratulate the Chinese people on the occasion of the 70th anniversary of the People’s Republic of China. China has transformed the history of the world over the past seventy years and, as a united nation, has spent the last seven decades with incredible success and countless achievements. Although China has faced many challenges over the past seventy years, the Chinese government has made its strategic and rigorous plans leading into its current position as a world superpower and the world’s second largest economy. Today, China is known as the most complete modern industrial system, the largest industrialized country, the largest trading nation, and the largest holder of foreign exchange reserves, which have grown from $1.5 trillion to $2 trillion in the last two years. And with the contribution of more than 7% of world economic growth, it has played a major role in global economic growth for the last 5 years. Over the past seventy years, China has also witnessed a remarkable improvement in the standard of living of its people, as the average life expectancy of people in China has increased from 35 years in 1949 to 77 years in 2018 and the country has been incredibly successful in taking 700 million people out of poverty, that is more than 70% of the world’s poverty reduction. Also, the annual income of its people has increased more than sixty times, making it the largest middle class in the world. M. Y. Rahnaward (B) Confucius Institute at Kabul University, Kabul, Afghanistan e-mail: [email protected] Silk Road Research Organization, Kabul, Afghanistan © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_11

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China’s growth and progress is unstoppable. As a regional leader and global superpower in the future of the global economy, China is one of the key players in global cooperation and peace and a key player for the future. The development process, especially the success of its massive economic projects, including the idea of the Belt and Road Initiative, will contribute more to the peace and security of the region. We believe that China, as a regional key power, will ensure security and peace in the region, especially in its neighboring countries. Afghanistan, a country that has been involved in conflict and violence for the last four decades, can play a significant role in China’s security process, especially the issue of counterterrorism, by which both of us are affected. And, on the other hand, Afghanistan, with its geopolitical position, can serve as an economic gateway. The location of this country as the regional connecting point of economic circles in Central Asia, South Asia, the Middle East, and East Asia can be important for regional economic projects and cooperation, especially for greater convenience in programs such as the idea of a Belt and Road of China. As President Ashraf Ghani believes, he has the opportunity to transform the field of global and regional competition into a platform of economic cooperation that requires not only national consensus and a strong and popular government, but also global support and cooperation, especially for neighboring countries. It calls for an area where China, as a good neighbor and longtime partner of Afghanistan, can play a key role in development, the economy, and the peace process, as well as in fighting against terrorism, poverty reduction, and other issues. Afghanistan, after 18 years of the presence of the international community, has not only failed to provide security and built an efficient government but is still a dependent country and has failed to build a sustainable economy. Moreover, with half of its population living in poverty, Afghanistan, despite being geographically rich in natural and underground resources, is still recognized as the poorest country in the world after Somalia. A recent report made by the Afghan Census Bureau in early 2008 on five factors (educational status, health, living standards, employment, and the impact of security on their livelihoods) shows that 1% of the population is in extreme poverty. Of course, the poverty rate in the cities is 18%, including the capital city of Kabul, at 15%, in the countryside at 61%, and among the Kuchis at 89%. Poverty, along with a lack of proper security, is recognized as the biggest problem in Afghanistan, despite the enormous amount of aid that Afghanistan has received over the past 18 years. About 80% of aid has not been effective to the lives and economic states of ordinary people. The main reason is that most project donors, especially large projects, have contracted with foreign companies, resulting in several contracts being awarded between 30 and 50% of the money spent on these projects in Afghanistan. About 50–70% of the money has been returned to donor countries without getting to Afghanistan. Poor management and lack of regular government planning and proper management of opportunities and the workforce are other major causes of poverty in Afghanistan. Although over 100,000 people enter the labor market each year, six million people do not have work. Afghanistan is unable to prepare for this number and has over 40% unemployment. Poverty leads to a lack

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of sense of security. The lack of control over the number of family members in Afghanistan can directly affect economic development and the labor market. Because more than 61% of families live in poverty, and the average family has more than 10 members and only one breadwinner. The illiteracy rate in Afghanistan is 60%. Corruption in government departments is widespread, and a lack of attention to agricultural development also contributes to Afghanistan’s poverty. As a whole, Afghanistan has been poverty-stricken for many years, but in recent years this country has shown that through economic projects and programs, most of which have been in partnership with other countries in the region, it can provide better prospects of a sustainable economy and poverty reduction. To reduce the level of poverty, there are projects and programs such as the three new transit corridors, for example, the Afghanistan-China Air Corridor; the opening and operationalization of the Chabahar Port; the inauguration of practical regional projects like Casa 1000 and the TAPI Project Aquina-Atamurat railway transit route. These projects and programs can bring hope to the people for a better tomorrow. Joining the BRI (Belt and Road Initiative) in 2016 and CPAC are two other great options for Afghanistan. BRI and CPAC are not only important due to their economic values, but also are highly employable, which can be of great help in the process of poverty reduction and can also provide a basis for greater cooperation among the countries in the region. Afghanistan, as the Heart of Asia, has a long history and a key role to play in the Historic Silk Road, and it can provide many facilities for such projects and regional cooperation.

Chapter 12

“China’s 70-Year Development and the Building of a Community with Shared Future for Mankind”: An Afghan Perspective (III) Mohammad Jan Alkoza and Mohammad Khan Wardak

In the past seven decades or even a century, China and Afghanistan have had both commonality and differences. The Chinese nation and the Afghan nation share similar characteristics. The two peoples have always been pacesetters in opposing imperialism and colonialism and have made great efforts and sacrifices to safeguard the sovereignty, independence, and territorial integrity of the country. Over the past century, the two countries have been developing their political systems and carving out development paths according to their own conditions. Both countries have accumulated rich experience and overcome many difficulties in the course of industrialization and modernization. Since the independence of Afghanistan and the founding of the PRC, the two countries have pursued non-alignment policy, peaceful development, friendship, and good neighborliness. Besides, the two countries firmly opposed encroachment, unilateralism, and foreign intervention. Since its founding in 1949, the people’s government of China has persisted in carrying forward Chinese culture and traditions, made great efforts in developing cultural fields such as literature, art, drama, and film, and replaced the old cultural forms with new ones. Cultural relics in museums and tourist attractions are a torch of historical power relayed to future generations. The development of Chinese culture has reflected the resilience of the Chinese government, with which the Chinese government has made remarkable success in the past 70 years. All ethnic groups in China have deepened their cultural roots and narrowed their cultural gap. Also, the Chinese government has been committed to promote harmonious development of society and religions, especially in the cultural industry. To this end, a cultural management system has been established. When it M. J. Alkoza (B) Zai Tribal Council in Alkeh, Kabul, Afghanistan e-mail: [email protected] M. K. Wardak Confucius Institute in Afghanistan, Kabul, Afghanistan © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_12

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comes to the return of smuggled Chinese cultural relics to the motherland, China has created a sound competitive environment globally. In this process, many job opportunities were created for technicians with the increase in the number of cultural relics handed over to China. The Chinese government always encourages and guides people to build good moral characters, including patriotism, law-abidingness, honesty, unity, friendship, diligence, and self-confidence. The education of social morality, professional ethics and family virtues has been strengthened thanks to people’s dedication in these areas. China has been building a strong socialist ideological and ethical system every year, which has been praised by social elites and applied across the country as an example. In 2009, the Chinese government launched an initiative to revitalize China’s cultural industry in order to support cultural enterprises to get listed. By doing so, a competitive platform for buying and selling for the society was created by buying and selling cultural assets and stocks. The Beijing Olympic Games also shows a part of Chinese culture, which is distinctive in the world. It not only realized Chinese people’s dream of hosting the Olympic Games for more than a century, but also demonstrated to the world the determination and ability of the Chinese government to fulfill its international obligations with unique and unprecedented thoughts and actions. In order to protect cultural heritage, China acceded to the Convention for the Safeguarding of the Intangible Cultural Heritage of UNESCO in 2004 and promulgated the Intangible Cultural Heritage Law in 2011. China has made remarkable achievements in supporting the Intangible Cultural Heritage Law. As of now, 36 projects including Chinese opera, the Great Wall of China and Chinese calligraphy have been included in the World Cultural Heritage List. China’s historical and cultural scenic spots have attracted the attention of many Middle Eastern tourists. While introducing Chinese history, these cultural monuments provide high-quality cultural products and services for tourists from other countries and create more job opportunities for the society. China has been working to strengthen cultural exchanges and cooperation with countries along the Silk Road. In September 2013, Chinese President Xi Jinping visited four countries in Central Asia. He proposed the strategy of jointly building the Silk Road Economic Belt across Asia and Europe for the first time, aiming to improve the level of cultural exchanges, promote talent exchange and enhance mutual trust. The “cultural center” is the key in cultural exchange. Since the end of 2013, China has franchised a number of cultural centers overseas. Further, China has signed memorandums of understanding with 102 countries to establish cultural centers, which serve as a window and bridge for foreigners to understand China and the Chinese culture. The Chinese government is establishing a standardized cultural service system to accelerate the implementation of cultural projects in China’s rural areas. Through these projects, the coverage of radio, television, and 5G Internet will be extended to villages. Besides, the film screening project, cultural information resource sharing project, farmer bookstore project, and urban and rural cultural station integration

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project have been put in place. By launching more satellites into space, a powerful Internet has been established in cities and villages to help the public better understand the lives of rural residents. The Chinese government has made great progress in empowering young people in the government system. Most government offices are run by young people. Many overseas Chinese return to China to serve the motherland out of patriotism, and they have played an important role in rejuvenating China. The Chinese people support the government, and the unity of this great nation is commendable. The return of overseas Chinese from all over the world to the motherland plays an essential role in forging national consensus, safeguarding national unity, and carrying forward patriotism of this peace-loving nation. The overseas Chinese represent Chinese culture in countries where they live and serve as a bridge connecting China and other countries. They are loyal to the motherland and Chinese culture, acting as guardians of their traditional culture, and taking the passing of Chinese traditional culture to the future generation as their mission. All Chinese people have made joint efforts to realize the dream of making China the richest and strongest country. The Chinese government has always adhered to peaceful exchanges with governments of neighboring countries, firmly applied an independent foreign policy of peace, and will never interfere in the internal affairs of other countries. The Chinese government links its own interests with those of the people across the world and participates actively in international affairs as a responsible and major power to address global challenges by joining hands with other countries. The Chinese government has been committed to the Five Principles of Peaceful Coexistence and established friendly cooperation with other countries in an allround way. China is working to improve its relations with developed countries and establish new relations with major countries. China has persisted in maintaining and consolidating friendly relations with neighboring countries and deepening mutual cooperation. China has endeavored to benefit both China and its neighbors through its development. The Chinese government is committed to strengthening solidarity and cooperation with other developing countries and safeguarding their legitimate rights and interests. China has also taken an active part in multilateral affairs, promoted public diplomacy and cultural exchanges, worked to establish an international order, and strengthened its relations with other developing countries in a more just and rational way. In addition, China has been a staunch supporter of equality, mutual trust, mutual tolerance, learning, and cooperation, and a firm builder of international relations that safeguard international justice. China has been devoted to promoting democracy and maintaining world peace and stability in accordance with the goals and principles of the Charter of the United Nations. China respects and supports the diversity of world civilizations and development paths, learns from others, and promotes the development of human civilization in different ways. China supports the shared destiny of mankind and aims to establish a more equal and balanced global partnership to protect the common interests of mankind by means of development cooperation and shared responsibility. China upholds the banner of peaceful development and cooperation and supports mutually beneficial cooperation strategies. The Chinese government is committed

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to safeguarding global peace and promoting common growth. China has always aspired for peaceful development and cooperation among countries, which is in the interests of the Chinese people and other countries. China has created new opportunities for global peace, development, and assistance, so as to ensure the lasting peace and common prosperity of different countries. The Chinese people love peace, pursuing development with aspirations, and are willing to make unremitting efforts to cooperate with other countries to bring peace to the world. Moreover, China is firmly committed to the independent policy of peaceful diplomacy and the Five Principles of Peaceful Coexistence. In 1964, the Chinese and French governments issued a joint statement announcing the establishment of diplomatic relations at the embassy level. France was the first Western power to make the move and set an example in diplomacy. In 1960s, France created an atmosphere of friendship and peace in the international community. China set a major milestone in the international landscape in the 1970s. On October 25, 1971, the lawful rights of the People’s Republic of China in the United Nations were restored, including the permanent seat on the Security Council, which marked a giant step of progress in the field of diplomacy. Since then, China has played a more important role in international affairs. On November 21, 2013, China and the EU formulated a strategic plan for cooperation between China and the EU. In this cooperation plan, both sides clearly defined the shared cooperation goals in peace, security, social welfare, sustainable development, and cultural exchanges. Both China and the EU are aware that China-EU relations can only develop on the premise of mutual benefit. On June 7, 2013, Chinese President Xi Jinping met with then US President Barack Obama, and the two sides reached an important agreement on the future development of US-China relations, and they are working together to establish a new type of national relationship that incorporates mutual respect. We can see the connectivity of land, sea and air and cultural exchanges in the “Partnership for Development, Integration and Industrialization.” The BRICS countries, namely Brazil, Russia, India, China, and South Africa have joined hands to develop and promote cooperation in trade, economy, finance, infrastructure, and personnel exchanges to achieve the goal of market integration. Last but not least, China has carried out comprehensive international exchanges in strategic and economic development. On the prerequisite of seeking common ground while reserving differences, plans have been drawn up to implement corresponding measures, and progress has been made in economic exchanges and cooperation. This initiative has “green-lighted” economic integration from the political and legal dimensions and facilitated wider economic exchanges and cooperation between China and other countries. The Chinese government provides assistance to Afghanistan. In September 2015, Chinese President Xi Jinping addressed the International Women’s Day Summit at the United Nations Headquarters in New York. He put forward four propositions including gender equality and all-round development of women and announced that China will provide training for 30,000 women from developing countries in the next five years. This demonstrates China’s responsible

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attitude towards advancing women’s affairs in the world, which was well received by the guests attending the summit. By fulfilling its commitments, China has expanded and improved the vision and ability of many women from developing countries, which stands as testament to the effectiveness of China’s efforts in the sustainable development of women worldwide. Over the past four years, China has invited more than 3000 women from Asia, Africa, Latin America, Eastern Europe, and the Pacific Islands to attend training courses in public administration, social organization, economics, commerce, education, medical care, agriculture, forestry, animal husbandry, and fisheries. China has organized training courses for developing countries to implement the 2030 Agenda for Sustainable Development. During the training course, they shared their experiences in the development of women and children. The All-China Women’s Federation has organized several training courses for women leaders, and trained leaders of political parties and women’s organizations in 84 developing countries. Women’s associations in Hubei, Hunan, Guangxi, Yunnan, and Shanxi Provinces in China have jointly carried out many training programs in cooperation with neighboring countries. Participants in these trainings visited Beijing, Zhejiang, and other places and exchanged views with local women. China Women’s University has developed a three-year Master’s training program called Women’s Leadership and Social Development. Last year, an Afghan woman graduated from the university’s social work school and was praised by many professors and foreign students at this university. In fact, Afghan students have been engaged in various women’s training programs organized by China as the cooperation in the field of women’s affairs is an important part of China-Arab strategic partnership. The Chinese government and the Chinese Embassy in Afghanistan have paid close attention to this area of endeavor. In the past four years, at the invitation of China, 290 Afghan female experts have participated in training programs in China. The training courses specifically for government protocol officers and heads of economic affairs are embraced by participants, who said that these courses are rich in content and practical. With the financial support of the Chinese government, 15 young Afghan women have gone to China for further studies; 36 female patients with heart disease were treated; and the women’s team of Kabul Wushu Group visited China. China has also funded the construction of a primary school for girls in Mazar-i-Sharif and assisted the construction of a training school for girls in Zebak County of Badakhshan Province. In addition, China donated training materials to the Afghan Ministry of Women’s Affairs, and invited women representatives from Afghan provinces, heads of Afghan women’s associations and other organizations to attend SCO Women’s Forum and other international conferences. At the same time, China has also participated in the construction of Milves Hospital in Kandahar, Republic Hospital in Kabul, teaching facilities, residential apartments, and vocational training centers in Kabul University, benefiting Afghan women tremendously. China has also helped Afghan women in receiving education and talent training. From 2016 to 2019, many outstanding college students from Confucius Institute of Kabul University participated in the “Chinese Bridge” Chinese Competition in Afghanistan every year, among which three women students won the first prize

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and went to China to compete with “fans of China” from all over the world in the finals of the “Chinese Bridge” competition. In May 2018, the Chinese Embassy in Afghanistan invited two women teachers from Guram Mohammed Maimanaji Art School in Afghanistan to China and hold an exhibition at the Palace Museum in Beijing. In March 2019, the Afghan female photographer Fatima Hosseini held a photo exhibition. One hundred and fifty women with the help of the Chinese Embassy. Women officials and parliamentarians of the Afghan government, faculty and students of Confucius Institutes, and diplomats from other countries visited the exhibition. The year 2019 marks the centenary of Afghanistan’s independence. In the past century, Afghan women have made remarkable contributions to safeguarding national independence and development. They are the group of people most affected by the war and eager for long-term peace. President Xi once remarked: “Looking around the world, we can see that women’s development is unbalanced in various countries and regions, and the whole society needs to further understand women’s potential, talents, and contributions. We should continue to work hard to expand the fields for women’s development.” It is hoped that Afghan women will better “hold up half the sky,” bring peace to Afghanistan and build a more prosperous and peaceful world.

Chapter 13

“China’s 70-Year Development and the Building of a Community with a Shared Future for Mankind”: A Turkish Perspective Aydin Nurhan

Dear Colleagues, Ladies and Gentlemen, It is our duty to give thanks for this timely event to our Forum host, the State Council Information Office of the P. R. China, and the organizer, the Chinese Academy of Social Sciences for their perfect organization and warm hospitality. Dear Friends, As we see from the theme and titles of our Forum, we understand that our hosts search for answers to their internal and global challenges ahead as they evolve into a new age of global leadership. Within this search, I would like to emphasize two striking points. First is the waning global legitimacy of the USA, and whether China has the capacity to succeed it. The second is an internal challenge, a challenge not only for China but the whole world, that of the urbanization of world populations. Let us start with a quote from Napoleon Bonaparte: China is a sleeping giant. Let her sleep, for when she wakes she will move the world.

And a second quote: Ibn Khaldoun’s analogy: States are like humans; they are born, grow, mature, and die. Today, Western civilization has curved its zenith, and China is climbing up. And a third quote, from Sam Huntington: The most prominent form of this cooperation is the Confucian-Islamic connection that has emerged to challenge Western interests, values, and power.

And the last quote, from Andre Vltchek: A. Nurhan (B) Center for Strategic Studies of the Ministry of Foreign Affairs of Turkey, Ankara, Turkey e-mail: [email protected] Turkish Asian Center for Strategic Studies, Istanbul, Turkey © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_13

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Dear friends, My first message to this august group is, “Legitimacy in the Global Village.” Why I think this concept is so vital is that we are leaving behind “The Age of American Global Legitimacy” which lasted just 56 years from September 2, 1945 to September 11, 2001. A very short fragment of human history. Since legitimacy is the sine qua non of leadership, which emerging powers are the candidates for a new global legitimacy? To fill the vacuum the USA is leaving behind with accelerating speed? In the game of international legitimacy, first you are confident that peoples love you. in the second phase, if peoples do not love you anymore, you say they should respect you. And finally, if they don’t even respect me, then they should fear me. This is the last phase of global legitimacy. President Trump’s recent threats to obliterate Iran and of the Turkish economy are some good examples of this trend. “If Turkey does anything that I, in my great and unmatched wisdom, consider to be off limits, I will totally destroy and obliterate the economy of Turkey (I’ve done it before!). They must, with Europe and others, watch out.” Let this be our ice-breaker today. Dear Friends, China may say it does not want to replace the USA as a global leader. It does not boast of a “Shining city upon a hill”, “Manifest destiny”, “White man’s burden,” or “Mission civilisatrice.” Yet economic clout brings military clout which in turn brings political clout. It is not easy for China to return to its historic isolationism in our global village. It cannot escape a mission for a better, just world. Historically, the balance of power means equilibrium, and any new candidate which forces its way up among the powers, rocks equilibrium which may lead to Thucydides trap and end in catastrophes of enormous scale. At this point, we would be asking a further question: Should humanity fear the annihilating potential of rising powers, or declining powers? Just as with human beings, if a state feels strong and beautiful, it is self-confident and it may be benevolent. Yet if it feels weak and ugly, it may do ugly things. And global legitimacy and leadership depend on a powerful civilization. China has one indeed. A very strong characteristic of a civilization is its ability to be “imitated.” Today, we talk of a world youth with American baseball hats, sneakers, American music, Hollywood movies, etc. What is the lifestyle of China that the global village is thirsty for and longing to imitate? Would the world leave English and use Chinese as a lingua franca? Furthermore, the most important issue for the people of the Western World is their materialist, consuming “lifestyle.” They are so zealous on keeping it. Not only them. Westernized youth of the world too. Even youth in Afghanistan, Iran, and Arab countries! And, indeed, in my country Turkey. So here comes the question: How Westernized are we?

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From waking up, back to bed, in between, how much of our daily lifestyle reflects our traditional culture, and how much reflects modern Western culture? Which Western utilities can we discard? Forget Western suites and neckties, can we ask our kids to discard American baseball hats? Can we prohibit Western web games, music, or movies? Impossible. Chinese Civilization indeed is a very different civilization than Abrahamic civilizations. In the age of communication, what lifestyle, arts, and values would it offer to the world? One very crucial factor for the loss of American global legitimacy was the exposure by IT of the blatant, unashamed lies and manipulations of its politicians and mainstream media working as war machine. In the age of IT, can China offer the global community a more honest and ethical media forum? Civilizations, by nature, are prone to exposure, are not afraid of receiving foreign cultural imports to enrich themselves, they digest and synthesize them, then radiate them back to their regions and the world. Throughout history, civilizations have traded with each other, some merged into each other, some were a continuation of each other, i.e., Ottoman civilization as a synthesis of and continuation of Persian, Arabic and Byzantine civilizations. Since China is the rising power of the Global Village, we try to figure out the possible behavior of this closed box. As global behavior patterns of Christian and Islamic civilizations in history and modernity are easier to predict, China’s recent history makes it a mystery box for its mission of global leadership. I think our Chinese friends also seek answers to these questions. The American lifestyle seems like it shall keep its throne for a long time to come. Yet, as the decline of American political legitimacy is accelerating, the new global generation is expecting a new world, the philosophy of which is based not on might, but, as Turkish President Erdogan insists, justice. Can the global community trust in China for such leadership? One important shortcoming with the USA was that it acted exclusively with Europe and Israel as its partners. Its ears were open only to Europe and Israel. Perhaps that is why its legitimacy declined much sooner than it would have otherwise. One wonders if China, rather than excluding the “rest,” can partner with “all civilizations” for a shared future for mankind. Sam Huntington says China would cooperate with Muslims who for him “have bloody borders.” Is China preparing a convincing philosophy to fix the problems of declining Western materialist capitalist civilization for a new global civilization? What strategy does China have for realizing it? Can we make an estimation of the balance of realpolitik vs. ideal politics in the future Chinese world dream? China is such a mystery that it is not even on the radar of the game of legitimacy yet. As I said in the beginning, the age of American legitimacy lasted just about half a century. Looking at its operations of “bringing Democracy,” we see millions in destruction, human catastrophe and suffering in Vietnam, Afghanistan, Iraq, Syria, Libya, Yemen, Palestine, etc. We do see, in French coinage, a “failed hyperpower” with the greatest annihilating power in human history. A country we fear its President

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is not in control of its civil and military servants. A serious defect for American democracy and a concern for mankind. Dear friends, Now let’s talk about urbanization and universal secular education. There are speculations of a United Nations with 250 member states by the year 2050. How does China plan to cope with the accelerating winds of decentralization and micronationalism? Add to this the estimates that about 80% of global population will live in cities by the year 2050. As the German saying goes, “stadtluft macht frei”, “city air liberates.” It is easy to oppress and suppress insulated village peasants. Yet city people are more educated, more individualistic, not submissive, and revolt easier. Secular education shall further foster materialism as metropolitan people shift from the millenial “tradition and religion based ethics and values” (Marx’s maxim), to secular, materialist bourgeois ethics in metropolises. Given global injustices, in the near future, metropolises will face riots in global scale. Today we see harbingers in Paris, Barcelona, Santiago, Caracas, Athens, Beirut, Rome, etc. Arab countries are especially prone to serious uprisings. And China, as its peasants flock to the cities, has to prepare for such challenges. With skyrocketing injustice and capital concentrating in fewer hands, massive unemployment is coming. I am afraid of a trend of Western democracies moving into authoritarian regimes rather than authoritarians going towards liberal democracy. A bleak future for young generations. Together with the winds of micronationalism and decentralization, the rather young concept of the “nation state” may not survive our century, leaving its place to a few trillion dollar companies evolving into a totalitarian elite ruling decentralized micro-clans in a futuristic world of Aldous Huxley or George Orwell. Dear friends, After this lengthy introduction, now lets us take our themes one by one. Our first theme is OPENNESS. As our hosts are asking the question of the “Construction of the Community with a Shared Future for Mankind,” with the word “shared” they give us the message that they do not want to close in and act alone, but want to be open to the global community. And since we shall be talking of “Global Community,” the first things to come to mind are the terms “Global Village” and “Globalization.” And the magic word for globalization is “communication.” Soon, every single human being on our planet shall be connected with all others at the speed of light. Can we stop it? Should we stop it? And many a youth with exhibitionist impulses are wide open to each other on social media. How about governments and trillion dollar companies? With new processors a million times faster than the present ones. How much will secrecy survive? If the world generations are being educated in secular, materialist, uniform philosophy, eagerly assuming a new global lifestyle, not forgetting that technology forces individuals to common habits (i.e., smartphone use), then might it mean they are heading to a uniform, common global “identity”?

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Hence, I see three important factors of materialist world philosophy for the new generations of the global village, namely, secular education, metropolitan lifestyle with consumption, and IT. Here the grand question is: Remembering Ray Kurzweil, will IT lead the global community into singularity, further merging all civilizations and lifestyles into a uniform one under the rule of a global elite? Dear friends, As openness is our fate, now let us see if we can have DIALOGUE. Civilizations mainly based on religion, many a time boasting of absolute truth, they did clash with each other. And today, against the views of Huntington and the like, I do not see a future clash of civilizations. Why? The philosophy of secular education. By consensus, global secular education is uniting the global youth under the flag of materialism. This means a materialist world approach, leaving millenia-old spiritual education behind. We may see clashes, yes, but not civilizational ones. Rather, ones of materialist interests. With IT, it is grassroots dialogue today. Youth is already globally engaged. They started as warriors, sporting their fierce animal reflexes online. Regulations do not seem to work. One wonders if things can mature and good-will can dominate. Or else, social media may lead to internal and international chaos. Classically, when we speak about dialogue among civilizations, many understand it as a dialogue among religious or political leaderships. Yet, without the grassroots participation of simple crowds, NGOs, social media, international organizations, etc., dialogue among leaders would lead nowhere. Based on Austrian philosopher Hans Köchler’s coinage and Iranian president Mohammad Khatami’s initiative, the United Nations proclaimed the year 2001 as the “UN Year of Dialogue among Civilizations”. Another initiative, the Alliance of Civilizations, was proposed in 2005 by the Spanish Prime Minister, José Luis Rodríguez Zapatero and co-sponsored by the then Turkish Prime Minister Recep Tayyip Erdogan. Yet all civilizations see themselves as supreme. And Western civilization, now tired, is it ready to meet other civilizations on an equal standing? For a dialogue of equals? The philosophy and historical practice of Islamic and of the Ottoman civilization was “co-survival in harmony” without annihilating or assimilating other religions and civilizations. Can we do this more in the 21st Century? We need empathy. The have-nots of the world are trying to get the West’s ear to listen to their concerns. And the mission of the Western media, the dominant media in the global village, is not the harmony of civilizations, ethics, nor justice, but the continuation of the dominance of Western interests in the global village. What is the remedy? Social media. For the new generations, social media is gradually overcoming the established media representing governments and capitalist interests. The establishment will have a natural tendency to limit this new phenomenon of social media. And this brings us to the last question, that of cooperation among civilizations. As we said, every civilization is an open, receptive system, a continual synthesis of colorful inputs. Yet every civilization sees itself as supreme. Especially taking

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into account the profound effect of religions on civilizations, it is not easy for them to give concessions to each other. Remember the recent effort for dialogue among religions. Religions were the true words of God. There cannot be any concessions among them, yet the dialogue could be called dialogue among the believers of religions for a harmonious co-habitation. Cooperation does not necessarily mean a joint effort of equals. It may be among un-equals. Is our global village ready for a just relationship between the powerful and the weak? As a grayed, retired diplomat, I cannot be optimistic from what I have seen and experienced in my lifetime. Yet it is changing the religion based civilization, bringing forth a practical, actual, materialist “lifestyle” rather than the philosophical approach to life. And a natural evolution into singularity does not necessitate cooperation anyway. Speaking of cooperation, I would also ask whether Western civilization is universal or not. It seems universal. Yet it has defects and shortcomings too. Then rather than being reactive to it, can we study and keep the positive parts of it for a future synthesis of our global civilization? In fact, it would be a natural process rather than social engineering. Looking back at human history, the pendulum has swung back and forth between matter and soul. With the Western Reformation, the Renaissance and the Industrial Revolution, matter was the victor. Would shortcomings, especially the injustices of materialist philosophy, kick the pendulum to a global spiritual civilization? There are no clear answers. Things may move in a natural process rather than through social engineering. Still, the question is; would IT break the natural evolution of humanity? If so, in a technologically manipulated synthetic future, what is the use of discussing civilizations, global leadership, and cooperation, anyway? Then, would there be need for a new nation state as a global leader? Thank you for your patience.

Chapter 14

“China’s 70-Year Development and the Building of a Community with Shared Future for Mankind”: Environmental Challenges Faced by Big Cities in China and Policy Responses Vicente Ugalde Saldaña

In recent years, China has been associated with economic development. Over the past two decades, China’s impressive economic growth rate, accelerated expansion in manufacturing output, and trade with many countries have equipped China with strong competitiveness compared with other economies. Experts have embraced and recognized this situation, and even those who have reservations about China’s economic model have acknowledged its effect on the modernization of society. The successes and challenges of this economic model have been evaluated from multiple aspects, but in the context of history, we have to recognize and applaud the achievements made by the Chinese people in the past 70 years. For any country in the world, accelerated industrialization, rapid urbanization, and a myriad of difficulties arising from urban life are challenges concerning economic development and to be addressed. A greater challenge is that people have come to realize that they need not only to ensure the coexistence of large numbers of inhabitants on limited land, but also to meet the needs of the current generation without compromising the abilities of future generations. These are some of the challenges of industrialization, urbanization, and sustainability of urban life proposed in this article. The status quo and the forecast of urban system in the next few years point to the consolidation of the urbanization process. The United Nations predicts that by 2050, the world population will reach 9.8 billion, with main growth recorded in cities: the urban population will increase from 4.2 billion in 2018 to 5 billion in 2028, 6 billion in 2041 and 6.7 billion in 2050; in other words, over 22 years, the urban population will increase by 2.5 billion, while the world population will increase from V. U. Saldaña (B) College of Mexico (Colmex), Mexico City, Mexico e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_14

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7.6 billion to 9.8 billion.1 Urbanization is characterized by concentrated population in big cities. According to the World Population Review, there are currently 65 cities with a population of more than 1 million, while 360 cities have a population between 100,000 and 1 million. A report released by Oxford University points out that 34 of the 100 largest cities in the world will be in China by 2035.2 These cities will become the engines of economic growth, and by 2027, the total GDP of Asian cities will exceed that of North American and European cities for the first time. Cities will become the main drivers for economic growth and by 2035, Shanghai will rank alongside London as the fourth most important urban economy in terms of GDP, after New York, Tokyo and Los Angeles, the report said. If the world economy grows at an average annual rate of 2.6% (GDP at constant prices) between 2019 and 2035, the economy of 780 major cities will grow at an annual rate of 2.8%. Four of the top 10 cities (Shanghai, Beijing, Guangzhou, and Shenzhen) are from China. In fact, by the end of 2011, China’s population was predominantly urban (51.27%). Among them, the urban population amounted to 69,077 million and the rural population was 65,656 million.3 It was estimated that by 2020 the urban population would reach 800 million, which generates huge demand for infrastructure, transportation, energy, drinking water, and wastewater and waste treatment. This short list of challenges is not unique to any country or region in the world because urbanization is ubiquitous, with varying growth rates. This article does not intend to describe it exhaustively. But it is worth noting that China’s urbanization drive and diversified urban expansion involve not only the population situation, but also the sustainability of urban life, which requires preventive measures.4 The following are some interpretations of the concept of urban sustainability provided by international organizations, i.e., what types of measures and preventive means to adopt; taking China as an example, some concrete measures will be reviewed to translate the requirements of urban sustainability into actions, but in general, environmental protection is one of the prerequisites for sustainable development. The United Nations presents these challenges to sustainable urbanization within three themed frameworks: sustainability, inclusiveness, and resilience.5 With regard to inclusiveness, options for achieving spatial and social equality, as well as balanced territorial distribution and access to public space were proposed. In terms of resilience, it is recommended to strengthen risk management, avoid urbanization 1

United Nations, Department of Economic and Social Affairs, Population Division (2019), World Urbanization Prospects, The 2018 Revision. (ST/ESA/SER. A/420). New York: United Nations. 2 Holt, Richard (2018), Global Cities: The future of the world’s leading urban economies to 2035. Oxford, UK: Oxford Economics. 3 Naciones Unidas estima que la población urbana en China pasó de 42.5% a inicios de 2010 a 55.5% al iniciar 2015. United Nations, Department of Economic and Social Affairs, Population Division (2019), op. cit., p. 18. 4 Una clara explicación de cómo las diferencias del sistema de ciudades de China se expresa en la expansión urbana observada puede verse en Guangdong Li y Feng Li(2019), “Urban sprawl in China: Differences and socioeconomic drivers”, Science of the Total Environment, 673, pp. 376–377. 5 UNDP (2016), Sustainable Urbanization Strategy. UNDP’s Support to Sustainable, Inclusive and Resilient Cities in the Developing World. New York: United Nations Development Program.

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in areas where population exposure and vulnerability are increased, and minimize urban violence. As to sustainability, UNDP recommended considering development options for relieving the burden of urban transport which would strengthen efficient and integrated public transport systems and establish policies to discourage the use of private cars. In terms of energy, UNDP put forward producing energy under the premise of the lowest environmental cost, adopting energy-saving measures in buildings, implementing incentives to invest in energy efficiency mechanisms of buildings, and adopting incentives to invest in renewable energy. Finally, it proposed waste management options, such as reducing the environmental degradation effects of waste through its treatment, reuse, and recycling, and generating energy from waste while reducing greenhouse gas emissions. A formidable challenge is to formulate policies that can facilitate sustainable and fair urban development. In urban development, all residents can share the benefits arising therefrom. In another document,6 the United Nations put forward recommendations linked to UN Development Goal 11 to make cities inclusive, safe, resilient, and sustainable. In general, some people suggest that cities should focus on creating wealth and decent jobs, rather than discouraging migrants; they suggest that necessary infrastructure should be put in place to provide water and sanitation, energy, transport, and communications to these populations; efforts should be made to maintain a healthy environment and ensure equal access to housing. The United Nations also recommends that the needs of women, youth, and the elderly be taken into account, especially to promote healthy aging; also, special attention should be paid to the poor and the disabled. These challenges are multifaceted and relate not only to how to manage urban development, but also to infrastructure and transport policies, employment policies, policies that determine land-use patterns, and policies on the distribution and placement of population and activities on the territory. These policies are also relevant to those who seek to protect the environment, and this article will discuss some of the recent developments. Generally, there is abundant academic thinking about economic activities accelerating demand for natural resources and leading to increased pollution.7 Stephen K. Ma8 analyzes the environmental challenges brought by economic globalization to China, and questions whether this has an impact on the formulation of national environmental policies. As we can see, government has intensified interventions to protect the environment in recent years. For many reasons, for example, the awareness that environmental protection is important to ensure sustainable economic development, or obliged by an international commitment, or as recognized by economic science, government intervention in environmental issues is reasonable due to its

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United Nations, Department of Economic and Social Affairs, Population Division (2019), op. cit. Por citar un ejemplo, Diez Jordi y O. P. Dwivedi (2008), Global Environmental Challenges. Perspectives from the South. Toronto: Broadview Press. 8 Ma, Stephen K. (2008), “Environmental Management in China: Globalization and its Challenges”, en Diez y Dwivedi op. cit., pp. 43–62. 7

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externality or public goods attribute.9 Therefore, the author reviews efforts made by the Chinese government to solve the problem of environmental degradation in the country. As in any other country, economic development, especially in its early stages, is achieved at the sacrifice of environmental protection. For its part, China has formulated an environmental protection policy to address the challenges of the worsening environmental condition. Since the early 1970s, the Chinese government has taken targeted measures. After attending the Stockholm Summit on Human Environment in 1972, China initiated some laws and regulations on environmental protection. On the one hand, China formulated the Wildlife Protection Law; on the other hand, in 1973, the Trial Standard for Industrial “Three Wastes” Discharge was formulated. In addition, the Provisional Design Hygienic Standard for Industrial Enterprises promulgated in 1956 was revised in 1973. Environmental issues were enshrined in the Constitution in 1978, and decisions to address environmental protection challenges were translated into concrete actions at the legislative, academic, and governmental levels in the following years. On the one hand, several important laws and regulations have been drafted: the Environmental Protection Law, the Forest Law, and the establishment of standards for the protection of aquatic resources, the quality of water used for agricultural irrigation and fish farming, as well as standards for the safe use of pesticides. In the same year, the Chinese Society for Environmental Sciences was established, and the Ministry of Urban and Rural Construction and Environmental Protection was established in 1982. More efforts to reconcile economic development with environmental protection have been made due to the challenges posed by emissions and population concentration in urban areas.10 Since then, urban problems and environmental problems have begun to be connected. In fact, from the 1970s, people began to pay attention to balancing the urban system and promoting planning that is helpful for the development of small and medium-sized cities; limit the expansion of big cities; in addition, the impact assessment of construction projects has been established and advanced. Scientists and Chinese Academy of Sciences paid much attention to environmental issues.11 The scientists and technicians in the environmental sciences distributed in many teaching and research centres have contributed to China’s environmental protection. In recent years, effective and rapid economic growth have put existing environmental protection measures under test. These increasingly severe environmental challenges are the underlying reason for the major revision of the Environmental Protection Law from 2011. The revision process was quite engaging because different views were presented, some of which were transformative, while others favored a

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Bacache-Beauvallet, Maya (2008), “Marché et droit: la logique économique du droit de l’environnement”, Pouvoirs, 127, pp. 35–47. 10 Ma, Stephen K. (2008), “Environmental Management in China: Globalization and its Challenges”, en Diez y Dwivedi op. cit., 52–53. 11 Ma, Ibíd.: 48, Véase también Qu, Geping y Woyen Lee, [eds.] (1984), Managing the Environment in China. Dublin: Tycooly Internationa publishing.

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gradual reform of the Environmental Law. Great progress has been made in openly discussing environmental issues and transforming them into legislative instruments. In 2014, the amended Environmental Protection Law was passed to improve the definition of punishment and increase the intensity of punishment. Measures have also been taken to guarantee people’s right to information on environmental issues and to strengthen the capacity of law enforcement agencies and accountability mechanisms of local governments. Another reform undertaken in recent years is related to the law that came into force in early 2016 and is designed to prevent and control environmental pollution, which pays special attention to pollution sources, emissions, and pollutant density. Further, between 2013 and 2016, the government issued three Ten-point Action Plans to implement new laws and regulations on air, water, and soil pollution. The implementation of this new law system requires adjustments to the administrative structure of the Ministry of Environmental Protection, in particular departments responsible for pollution prevention and control and the total pollutant control, which have been reorganized in three areas: air, water, and soil.12 The changes have resulted in stricter enforcement of environmental legislation, including stronger local government controls and extensive inspections and tough sanctions against polluting enterprises. In 2015 alone, 1.77 million companies were investigated, 191,000 were sued, 20,000 were shut down, and 24,000 were partially closed.13 Due to changes in the legal framework of pollution control, environmental issues have been dealt with judicially. Zhang and his colleagues mentioned more than 50 civil and administrative lawsuits, in which two non-governmental organizations (“Friends of Nature” and “Green Home in Fujian”) received orders from judges to claim compensation for forest and land losses caused by unlicensed quarry operations and achieve ecological restoration.14 Thanks to the quality of the currently available environmental information, they have come to realize that these modifications alone would not have an immediate and noticeable effect on the environment, as the information on the issue was recent and dissemination measures were just developed in recent years. Some authors say that the definition of environmental objectives and pollution reduction are not entirely based on scientific information about environmental capabilities or human health.15 Nevertheless, in fact, by gradually improving policy instruments and capabilities, they have minimized the impact of economic activities on the environment, paving the way for significant improvement of the environment and representing the pledge of the Chinese government to environmental protection. As such, China’s leading position in environmental protection has been strengthened. In this sense, although the results are not obvious at the environmental level, the environmental protection

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13 Véase Bo Zhang, Cong Cao, Robert M. Hughes y Wayne S. Davis (2017), “China’s New Environmental Protection Regulatory Regime: Effects and Gaps”, Journal of Environmental Management, 187, pp. 464–469. 13 Zhang et al., Ibíd., p. 465. 14 Zhang et al., Ibíd. 15 Zhang et al., Ibíd.

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performance evaluation system established by local governments shows that environmental management can be adjusted and improved efficiently through regulations. But most importantly, it reflects a strong political commitment, which, though still a long way to go, is essential for improving environmental management.16 For more than a decade, Stephen K. Ma has made no secret of his optimism when it comes to globalization, which is not only the engine of China’s export industry, but also the carrier of international demand for local production methods, which minimizes the environmental risks. According to the author, in 2005, disasters such as the release of millions of gallons of toxic liquid into the Songhua River and the bad weather conditions in Beijing before the Olympic Games have triggered adjustments in environmental policy,17 such as the revision of the Environmental Protection Law and other laws related to animal, fishery, residue, and forestry activities, and the gradual use of environmental management tools described in this article. Environmental sustainability also depends on the consumption patterns of urban life. Although urban dwellers spend more, consume more energy, and produce more CO2 emissions than rural dwellers, these changes in consumption patterns may have a significant impact on sustainability. Urban life is an opportunity to strike a balance between development and environmental protection. In China and many big cities, the ever-changing changes and technological innovations will lead this trend in the next few years.

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Estas son algunas de las conclusiones del estudio realizado en la ciudad de Shenzhen. Lei Liu, Martin de Jong y Ying Huang (2016), “Assessing the Administrative Practice of Environmental Protection Performance Evaluation in China: the Case of Shenzhen”, Journal of Cleaner Production, 134, pp. 51–60. 17 Ma, op. cit. p. 60.

Chapter 15

“China’s 70-Year Development and the Building of a Community with a Shared Future for Mankind”: A Uruguayan Perspective Washington Ruben Duran Correa

First of all, I would like to thank the National Institute for Global Strategy of the Chinese Academy of Social Sciences, especially for the invitation with which they have honored the Uruguayan Council for International Relations (CURI) and myself. Also, as a full member of the National Academy of Engineering of Uruguay, it is a great honor for me to share some ideas with such distinguished academic colleagues in a forum organized by the National Academy of Social Sciences of China. The topic which is proposed to raise our reflections deserves a very deep analysis and it is not possible to address it fully in a brief presentation. Therefore, we will only raise some points that we understand are relevant for economic growth to be an effective tool for the inclusive development of peoples, in the most equitable and environmentally sustainable way possible. Although it seems redundant, I must make some reflections prior to the approach of the subject, because I cannot abstract myself from my academic training in hard sciences and, therefore, I need to define the concepts that are used, in order to later develop them. It is clear that economic growth is not the same as development. However, sometimes it is intended to define the level of development of a society based on its growth or economic capacity, measured—in general—by GDP per capita. A given country may have a relatively high GDP per capita and the level of development of its people may not be comparable to that of other countries with the same income. Personally, I think this is perfectly applicable to the case of Uruguay. It is not possible to compare the level of development in certain areas reached by the Chinese economy and that of the Latin American economies, although internationally both are categorized as developing countries. W. R. D. Correa (B) Uruguayan Council of International Relations, Montevideo, Uruguay e-mail: [email protected] Foreign Trade Commission of the Chamber of Industries, Montevideo, Uruguay © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_15

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Uruguay’s GDP per capita is almost double that of China and yet the development levels of both countries are infinitely different. China is the second largest world economy and is heading toward being the first, while most of the Latin American economies fight against recession and stagnation and have a high degree of public debt and a strong fiscal deficit. All of this indicates very clear differences between our two regions in terms of levels of development and capability to generate economic growth. On the other hand, when we refer to inclusive development, the concept also needs to be clarified. There are relatively complex international definitions, such as those of the World Economic Forum, built for the purpose of comparing the realities of different countries. In general, these definitions refer to how countries include their populations in various social and economic areas. However, at this moment we would like to refer to how different countries can or should be included in the world economy, because in the current situation, there are many countries, or we could say almost whole continents, on the verge of exclusion. This generates many of the problems facing the world today. Massive migrations of people, whether for economic reasons, regional wars, or escaping from terrorism are a clear example of the negative impact of this type of exclusion, both in countries that lose part of their population and in those forced to receive significant contingents of people with differences of all kinds and who are carriers of all the problems that uprooting people entails. Therefore, in order to be inclusive development for the inhabitants of a country, it is necessary for the world to generate opportunities for inclusive global development in all countries. While this must be a shared responsibility, it is necessary that the most powerful economies assume the commitment to cooperate in all areas in order to create an effective climate of inclusive development. We believe that this event is a good opportunity to look for ways that allow greater inclusion of countries in the global economy and governance. It is clear that each country is responsible for its own destiny but in a time of global economy and accelerated communications, the international environment increasingly plays an important role and conditions the possibilities that the most dependent countries have. Hence the need for international cooperation to help offset the negative effects of globalization. However, it is necessary to warn that the strongest countries should not be tempted to generate a new wave of colonialism motivated by the need for assistance from the weakest countries. The old Spanish and Portuguese colonies of Latin America should be respected as independent and developing nations. Latin America, and in particular its smaller economies, are excluded from large international value chains, from new scientific and technological developments, from the areas in which new trade rules that go beyond tariffs and trade are negotiated and that include the imposition of technical, sanitary, or other norms whose purpose, far from being to preserve human health or the environment, is to protect the economies of the most powerful countries. It is necessary that from the multilateral organizations

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a normative convergence is sought that does not just exclude the weakest countries from international trade. The great economic growth that China has had since the end of the last century has been the impetus for the growth of world trade. Mainly of those countries that have been and are suppliers of raw materials, energy supplies, and food, which China has needed to buy for sustaining its own growth and to improve the quality of life of its people. In general, this has been reflected in the fact that Chinese supplier countries have increased both their exports to China and their imports. If we look at the large numbers, without further analysis, one could say that trade between China and developing countries has been balanced from the quantitative point of view and in some cases; it has been in favor of the latter. However, when we analyze the available data in greater depth, several qualitative differences arise between trade flows to and from China. This is as a general matter and is similarly replicated in the commercial relationship of most developing countries with China. To avoid entering into realities of other countries, we will take as an example the case of Uruguay, which, despite it being a very small economy, smaller in size than some neighborhood in Shanghai, with 3.5 million inhabitants, we can consider as representative of the general situation. Uruguay’s exports to China are mainly concentrated in five products: meat, soy, cellulose, wood, and wool. These account for more than 90% of total Uruguayan exports to China. In the case of Uruguayan imports from China, trade is much more distributed, and the ten main import products barely add up to more than 30% of the total. Among these products are cell phones, chemicals, computers, televisions and other electrical and electronic devices, and automobiles. As you can see, there is a significant difference in both the concentration and the level of manufacturing between the products that Uruguay sends to China and those that it receives from China. This is reflected also in their intrinsic value, which somehow reflects the technological content of each other. In the average of the last eight years, products exported by China to Uruguay have had a value, expressed in dollars per kg, 5 times higher than those exported by Uruguay to China. As we said, although these data are taken from Uruguay’s statistics, international sources confirm that the situation is similar in other countries even if the individual products are different. Another relevant piece of data for analyzing economic links between countries is investment data. Although for different reasons between 2016 and 2018 in Uruguay there has been a process of foreign disinvestment, in the previous years in which foreign direct investment was very important, in Uruguay the investment of Chinese origin barely reached 2% of the total. On the other hand, in the last three-year period in which negative investment is recorded, the percentage of Chinese disinvestment has been an average of 15%. In other words, Chinese investment in Uruguay is much more sensitive to negative market trends than to positive ones.

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I mention this because investment is a fundamental part of growth and even more of development. It is clear that the countries of Latin America have pending tasks to be attractive for attracting investment: improving internal costs, productivity, infrastructure, logistics, labor relations, security, education, investment in scientific and technological development, the relationship between the cost of the state and the services it provides, etc. These are some of the things that, to a greater or lesser extent, all Latin American countries must face immediately. This task is not only for governments, but also for private actors, whether they are businessmen or workers, scientists or students. We must all do our best without waiting for help to come from outside. In any case, international cooperation must arrive to resolve those issues that would otherwise be delayed or whose goals would not reach themselves. It is a phrase often repeated that the world has changed, but that phrase reflects reality. The changes have been a characteristic of the development of civilizations, the difference is now in the speed at which the changes occur. A product that is created today perhaps in ten or fifteen years is already obsolete, hence the need for permanent innovation. This pace also marks the speed that cooperation must reach to help build a more inclusive global society with a shared future. Thank you.

Chapter 16

“China’s 70-Year Development and the Building of a Community with a Shared Future for Mankind”: A Nigerian Perspective Charles Okechukwu Onunaiju

Esteemed participants, It is a great pleasure to come to China’s famous international city of Shanghai to participate in this important event. I take this opportunity to thank the National Institute for Global Strategy of the esteemed Chinese Academy of Social Sciences for inviting me. The founding of modern China 70 years ago, along with the victory of the Bolshevik revolution in Russia in 1917, were among the few events that defined the twentieth century. Before the victory of the Bolshevik revolution and China’s national liberation, the thought that ordinary working men and women could break through the net of history and dare to take their fate in their hands and establish political and social order in which they are masters was mostly in the realm of philosophical musings but the scientific theory of Marxism weaponized both philosophy and history as a tool of popular liberation. The Chinese revolution took her place in history pantheon, as one of humanity’s most magnificent enterprises that, 70 years after it occurred, a fresh chapter in the history of humanity has been opened. The giant strides of the People’s Republic of China in the 70 years since her founding, bears out the thoroughly scientific world view in the observations of the second congress of the Communist party of China in July 1922 when it defined the nature of the party and outlined its trajectories that must proceed from China’s unique national conditions and social reality. Among other things, the congress affirmed that “our communist party is neither a Marxist academic society organized by intellectuals nor a utopian revolutionary organization of a few Communist who are divorced from the masses, but rather ours is a party fighting for the proletariat…” and “all the party activities should be conducted in the depth of the masses and must never be divorced from the masses.” At the current stage of development, the party, through C. O. Onunaiju (B) Centre for China Studies, Abuja, Nigeria e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_16

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acute interrogations of the historical process and from the experience of governance trajectories, has identified the convergence of human aspirations as the universal trend that would drive humanity forward. The critical structures of the existing global order were mostly post World War II creations and do not currently reflect the broad aspirations of humanity for a shared future and inclusive order. The historical context of the current human conditions and its social realities objectively challenges the post-World War global order to adapt and update itself to the contemporary aspirations of mankind that have evolved through forces unleashed by quantum leaps in science and technology. While territorial integrity and state sovereignty remained the cornerstone of the existing global order and will remain so for the foreseeable future, contemporary states must however accommodate and reconcile to the borderless convergence of human aspirations. While sovereign states and their secure borders guaranteed in their sacred attributes of territorial integrity and sovereign rights to manage their internal affairs are not expected to dissolve and melt, they are however to give proper ventilation to shared human aspirations and the growing tendency to the construction of community of a shared future for humanity. The trajectories signaling the trend of evolving community of shared interests for all humankind are an objective historical process unfolding at its own independent momentum, not only generating opportunities but also posing challenges. President Xi Jinping provided vital insight to this evolving trend in a keynote speech he gave at the first Belt and Road Forum of International Cooperation that was held in Beijing in May. According to him, “from the historical perspective, humankind has reached an age of great progress, great transformation, and profound changes. In the increasingly multi-polar, economically globalized, digitalized, and culturally diversified world, the trend toward peace and development becomes stronger, and reform and innovation are gaining momentum. Never have we seen such close interdependence among countries as today, such fervent desire of people for a better life and never have we had so many means to prevail over difficulties; such profuse and effusive characterization of the human prospects and opportunities that objectively exist to advance human happiness, is however juxtaposed by the critical and existential challenges that currently constrain it.” President Xi in this same speech underscored that “in terms of reality, we find ourselves in a world fraught with challenge. Global growth requires new drivers, development needs to be more inclusive and balanced and the gap between the rich and the poor needs to be narrowed. Hotspots in some religions are causing instability and terrorism is rampant. A deficit in peace, development, and governance poses a daunting challenge to mankind.” And because “these are the issues that have always been on my mind; in the autumn of 2013, respectively in Kazakhstan and Indonesia, I proposed the building of the Silk Road Economic Belt and 21st Century Maritime Silk Road, which I call the Belt and Road Initiative.” The Belt and Road framework of international cooperation was not grand political vocabulary to announce the arrival of a new hegemonic power for which the world should be in “shock and awe.” It issued from a rigorous scientific interrogation of the actual facts of existing human conditions, the opportunities it offers, the challenges it poses and the prospective tools available to navigate through it. Despite the evident

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inadequacies of the current global order, we seek to make up its deficits through broad participation by giving practical effect to extensive consultations, joint contribution, and shared benefits to all global stakeholders in the construction of physical connectivity and institutional alignments of the world’s communities through the broad engagement of all states. The China-initiated “Silk Road Economic Belt” and the “21st Century Maritime Silk Road,” otherwise called the “Belt and Road Initiative” (BRI), a massive framework of global connectivity through networks of overland, maritime, and digital infrastructures, not only captures the trends of the aspirations of humanity but seeks vigorously to give practical effect to it, by engaging in the building blocks of global integration and the re-humanization of the previously arcane and brash globalization that gave vent exclusively to roaming capital, while excluding the bulk of humanity. The ancient Silk Road from which the contemporary Belt Road framework of new international relations and cooperation took its inspiration was itself the synergy of man’s vigorous entrepreneurial, intellectual, cultural, and spiritual exertions, which gave the ancient Silk Road its outstanding historical essence. Its similar parallel included the Tran-Sahara trade route, through which Sub-Saharan Africa engaged with the Arab North of the continent and Europe. Before it degenerated into slave trade routes in the nineteenth century, resulting from the rise of capitalism in Europe, it was essentially a major artery for trade, culture, intellectual exchange, and religious transmission. Trans-Saharan trade was essentially the transit route of goods between SubSaharan Africa, the Arab and European worlds that flourished between the 7th and the fourteenth centuries, with goods traded, including precious metals such as gold. The trans-Saharan trade route expanded and crossed the more established trade route of the Silk Road between Europe and the Middle East. Among articles traded on the trans-Saharan trade routes, gold was one of the sought after resources from sub-Saharan African countries such as the ancient Kingdom of Ghana, Mali, and regions of Sudan and in return, European nations traded salt. Besides trade in goods, the trans-Saharan trade route facilitated cultural exchange between Africans and Arabs, promoting the spread of Islam. One of the central African figures of ancient history, who traversed both the transSaharan trade routes and the enigmatic Silk Road, was the Moroccan traveler, Ibn Battutah, 1304–1377. In the emerging international system that would be characterized by broad inclusion, participation, and strands of practical connectivity, the spirit of the ancient Silk Road, trans-Saharan trade route and the monumental figure of Ibn Battutah loom large. Though the ancient Silk Road, trans-Saharan trade route and other similar historical endeavors at evolving a human community of shared destiny cannot approximate to the contemporary complex international system, their relevance is the undying human spirit to find accommodation to each other, despite vast diversities and geographical spread.

The rediscovery of the ancient Silk Road and its historical contemporary spirit and their re-incarnation in the China-initiated Belt and Road strategy of international

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cooperation testifies to the enduring and formidable human spirit to re-enact the finest of its trajectories. It is, therefore, an ode to incredible thought and the exponential rigor of profound theoretical explorations to connect the extant tapestries of history to the contemporary challenge of future for all mankind. The Belt and Road Initiative (BRI) stands out as one of the contemporary scientific discoveries to the vexed question of an inclusive roadmap to accommodate the objective strands of global integration but bereft of the critical infrastructure roadmap to bring out a community of shared destiny and future for mankind. Whether it is perceived as a grand strategy of Beijing to accelerate her dominance, as expressed in some minority views, the soundness of the theoretical and scientific ramifications of the Belt and Road process cannot be over-emphasized. The Belt and Road Initiative is not happenstance, a mere projection of power or a geopolitical calculus of an emerging world police inspector. It is the outcome of the theoretical rigor and exertion of a proletarian party and the government and people it leads, a consummate realization of the scientific interrogation of contemporary social realities and the crystallization of the depth of inquiry of arriving at truth through the intense examination of facts and a confirmation of the endless trajectories of reforms, embodied in the latest theoretical achievement of the CPC, dutifully manifested in the “Xi Jinping thought on socialism with Chinese characteristics for a new era.” The Belt and Road Initiative issued from the objective analytical interrogation of contemporary realities and reflects a profound grasp of the unfolding global trends of common universal aspirations for a shared future and destiny for all mankind. The sheer depth and rigor of thought invested in fleshing out the social achievement of the Belt and Road Initiative, the output of a massive physical road map and the overwhelmingly inclusive global acceptance and ownership testifies to the resourcefulness of the Chinese proletarian party to toil on behalf of humanity despite the simultaneous burden of advancing in particular the well-being and prosperity of the Chinese people. Interestingly, it sees the opportunities of the dialectical relationship between the well-being and prosperity of the Chinese people and the rest of humanity as mutually reinforcing and complementary. The objective convergence of universal aspirations for peace and development, inclusion and participation, contradicts the existing pockets of isolationism and unilateralism in the international order. The former yearns for practical expression while the later yields to the Cold War ideological fixations of power politics and hegemony. Meanwhile, as the inimitable spirit of new international cooperation asserts itself, the ideological and intellectual fervor justifying and enabling the conflictual paradigm as the elemental drive of international intercourse persists with seductive scholarly allure. The most recent incarnations though, with less intense appeal as the Mr. Francis Fukuyama ideologically feverish End of History in 1992, is Destined for War: Can America and China Escape Thucydides’s Trap? by Graham Allison, director of the Harvard Kennedy School’s Belter Centre for Science and International affairs.

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Referring to the Greek historian Thucydides who observed that the Peloponnesian war that ruined ancient Greece was caused mainly by “the rise of Athens and the fear this instilled in Sparta that made war inevitable.” According to the author, similar conditions of when a rising power threatens to displace a ruling one have occurred sixteen times over the past five hundred years and twelve ended in war, with only four ending in peaceful compromise. Professor Allison went on to raise the question whether “in the seventeenth case, an irresistibly rising China is on course to collide with an immovable America.” Even as he laid premises by which the “clash” may be averted through strategic recognition of each other’s vital interests, the emerging international trends, that is subordinating geopolitical calculations to the contemporary integrative mechanism objectively accelerating the convergence of human aspirations, did not particularly appeal to the author, who appeared obsessed with strategic conflict management of aggressive competitors. Though couched in the contemporary rise of China and perceptions of America’s existential dilemma, allegedly arising from it, Professor Allison’s “Thucydides’ trap” largely echoes the “clash of civilizations” by Professor Samuel Huntington. Yet, Henry Kissinger, doyen of U.S. diplomacy with whom former U.S. President Richard Nixon pioneered modern Sino-US relations in the early 1970s, has in insightful work asked “will the rapidity and scope of communication break down barriers between societies and individuals and provide transparency of such magnitude that age-old dreams of human community will come into being? Or will the opposite happen?” Will mankind, networked into transparency and the absence of privacy, propel itself into a world without limits or order, careening through crises without comprehending them? However, while intellectual speculation is welcomed to flourish on the intervening complexities of the current human conditions, it will take a bolder act of theoretical rigor to apprehend the evolving trajectories and navigate through an inclusive and participatory process, enabling a considerable global consensus on the framework and the roadmap of its physical and institutional architecture. In a strong and powerful affirmation that China and Africa are a community of shared future, leaders of the two sides met in Beijing in the September of 2018 for the 3rd summit of the heads of state and government of the Forum On China Africa Cooperation (FOCAC), and called “on all countries to work in concert toward a community with a shared future for mankind, an open, inclusive, clean and beautiful world that enjoys lasting peace, universal security and common prosperity, and a new type of international relations featuring mutual respect, fairness, justice and win–win cooperation, with a view to upholding and advancing world peace and development.” The successful convocation of the Beijing Summit of FOCAC clarified and laid out the fundamental architecture of an integrated global system whose functional dynamics would be underpinned by active collaboration and participation in nurturing and sustaining an inclusive international order. In offering themselves as a model of a community of shared future, China and African countries through the mechanism of FOCAC demonstrated what is possible in genuine, practical, and mutually respectful partnership despite the

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vagaries of geographical divides and even differences in social systems and political organizations. The China-Africa relations as a trend of contemporary international cooperation defined by the principles of sincerity, real results, amity, and good faith is a powerful current and a rare opportunity to redefine international relations beyond the Cold War and its characteristics of zero sum game, power politics, and the practice of hegemonism. While pockets of entrenched, powerful, and vicious special interests, nestled at vintage corners of some national political arenas would not be easily persuaded of the historical imperative and the obvious viability of international cooperation and partnership against the outdated paradigm of conflict and alliance, the trajectories of the historical course and especially in its current manifestations bear out a stronger push to the construction of a community of shared future for all mankind. As a powerful impetus driving the emergence of an inclusive and cooperative international order, China is neither a “superpower” nor a “hyperpower” and to my understanding would never aspire to be. The then Chinese Vice Premier Deng Xiaoping dispelled any notion of there ever being a hegemonic China. In a landmark speech at a special session of the United Nations General Assembly on the 10th of April, 1974, he defined “a superpower as an imperialist country which everywhere subjects other countries to its aggression, interference, and control or plunders and strives for world hegemony,” vowing that “China is not a superpower, nor will she ever seek to be one.” Deng Xiaoping plainly told the world that “if one day China should change her color and turn into a superpower, if she too, should play the tyrant of the world, and everywhere subject others to her bullying, aggression, and exploitation, the people of the world should identify her as a social imperialist, expose it, and oppose and work together with the Chinese people to overthrow it.” Nearly five decades after the Deng Xiaoping, the core of the Chinese secondgeneration leadership, well regarded for the profound insight in pioneering China’s reforms and opening up, spoke up to the world on the historic trajectory to international cooperation and inclusive participation, President Xi Jinping, the contemporary core of China’s fifth-generation leadership from the rostrum of the 3rd FOCAC Summit in Beijing in September of 2018 announced that “to respond to the call of the times, China will get actively involved in global governance and stay committed to the vision of consultation, cooperation, and benefit for all in global governance.” President Xi Jinping said that “China is ready to jointly promote Belt and Road initiative with international partners,” vowing that “China take its mission to make new and even greater contributions to mankind, and work with other countries to build a community with a shared future for mankind.” With development footprints and partnership across all regions of the world, China definitely means what it says and has remained true to her historic vision of inclusive and equitable global order. The paradigm of the Belt and Road Initiative of international cooperation and the vision of community of a shared future for mankind are two important questions of our time and how they are reckoned with will inevitably shape the fate of humanity.

Chapter 17

Overview: China’s 70-Year Development and the Building of a Community with a Shared Future for Mankind Panharith Long

17.1 Introduction October 1st this year marks the 70th anniversary of the founding of the People’s Republic of China. Throughout this period China has accomplished a milestone achievement by rising from one of the Third World countries to one of the world’s economic powers. The achievement in lifting 800 million people of poverty in a relatively short time was the result of its profoundly changing the way it engaged with the rest of the world. Openness to international trade and investment has been integral to the Chinese economic transformation over the past decades. Of late, witnessing the world amidst numerous crises and issues namely climate change, terrorism, and other non-traditional security threats, China has proposed the new concept of addressing those issues by advocating the theme of community with a shared future for mankind. This proposal aims to reap the benefits for every nation and install a prosperous community for mankind. The following will examine China’s development in the past 70 years and the pursuit of the community with a shared future for mankind based on the community of common interest and the community of shared responsibility.

P. Long (B) The Cambodian Institute for Cooperation and Peace, Phnom Penh, Cambodia e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_17

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17.2 The 70-Year Development: Reforms, Achievements, and Challenges In 1949, at the time of the founding of the People’s Republic, China was one of the poorest countries in the world. The per capita income was barely 5% of that of the United States at a little over US$700.1 In the early days of the PRC, China made strides in the planned economy. By 1952, China had placed inflation under control, collectivized property, and devised the country’s first five-year program by the newly established State Planning Commission. Nationalization and collectivization intensified with the introduction of the General Line of Socialist Transformation by Mao Zedong. Subsequently, the planned economy was to remain the cornerstone of the state until 1978, continuing with Soviet model and support.2

The First Phase of Reforms: Openness Forty years of development have made China the world’s second-largest economy, the largest producers and exporters and the second-largest expender of R&D.3 Now the majority of Chinese are living in cities.4 In the coming decade, China is expected to complete its journey to becoming a high-income country and end extreme poverty next year. Per capita income has increased 25 times in continuous dollars, from $308 in 1978 to $8, 800 in 2018.5 The success of China in reducing poverty can to a large extent be ascribed to the sustained rapid economic growth brought about after 1978 by the reforms. Deng Xiaoping famously said, “Poverty is not socialism, and neither is it communism.” Prices were liberalized, wealth was diversified, and the private sector expanded, property rights increased, and investments were made in infrastructure and citizens. Macroeconomic stability has resulted in high savings and rapid urbanization, allowing quick structural changes and productivity growth. Deng’s main economic reform initiative, “it doesn’t matter if the cat is black and white, so long as she catches 1

Bert Hofman, “Commentary: The People’s Republic of China at 70—Reforms, Achievements, and Challenges,” CNA, September 28, 2019, p. 1. Hereinafter “Hofman’s Commentary”, https:// www.channelnewsasia.com/news/commentary/china-70-years-xi-jinping-challenges-us-tradewar-ccp-reforms-11945014. 2 Jeffrey Sachs (2005), The End of Poverty: Economic Possibilities for our Time, New York: The Penguin Press, pp. 155–157. 3 “China Maintains World’s Largest Pool of R&D Personnel,” Xinhua, accessed October 29, 2019, http://www.xinhuanet.com/english/2019-07/23/c_138250922.htm. 4 Michael Wines, “Majority of Chinese Now Live in Cities,” The New York Times January 17, 2012, https://www.nytimes.com/2012/01/18/world/asia/majority-of-chinese-now-live-in-cities.html. 5 “China,” Forbes (Forbes Magazine), accessed October 29, 2019, https://www.forbes.com/places/ china/.

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the mouse,” the credo for pragmatic reformers to do what works, was used for the first time in 1962 after the Great Leap Forward.6 In the framework of this broad leadership guidance, reforms have been implemented experimentally and often begin in several regions, and only expand nationally if success is proven and the level of development and implementation has been taken into account. Thereby the room for the country’s institutions and the path to growth was given to gradually be identified instead of a pre-set formula for development and shock therapy. Local officials were also urged to successfully implement this reform agenda—their assessment of results relied on their region’s progress. Competition between localities for investment produced good conditions for growth.7

The Second Phase of Reforms: Market Building The second phase of the reforms, between 1993 and approximately 2003, or the Zhu Rongji years, involved clearer market reforms. The socialist market economy was declared the prevailing system in China by the third plenary session of the 14th Congressional Central Committee in 1993.8 Decisions from the Plenum in 1993 included several aspects of China’s current economic management, including tax sharing, a modern central bank able to formulate and enforce monetary policy and political banks which relieved commercial banks from their political role. It also implemented state-owned business reforms, which have been undertaken aggressively after the Asian financial crisis under the slogan of “Grasp the Big One, Let the Small One Go.” These measures also culminated in the sale of small public companies, housing redistribution, and social security institutions independent from workers.9 China’s accession to the WTO in 2001 caught up in market reform and made China a chosen platform of production for Asia’s supply chains.10 Exports have been booming and economic growth has reached 10% each year, fueled by productivity increases triggered by the WTO reforms, until the global financial crisis shortened them.

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Ibid. p. 3. Chen Jue, “Reform and Opening Up: A Boon for China and the World,” Reform and Opening Up: A boon for China and the world—Chinadaily.com.cn, accessed October 29, 2019, http://www.chi nadaily.com.cn/a/201812/19/WS5c19f320a3107d4c3a001ab4.html. 8 “As China Ponders Economic Changes, Lessons from a 1990s Reformer,” Voice of America, accessed October 29, 2019, https://www.voanews.com/east-asia/china-ponders-economics-cha nges-lessons-1990s-reformer. 9 Hofman’s Commentary, p. 2. 10 “China’s Accession to WTO Has Been a Boon, Not an Error,” Financial Times (Financial Times, February 15, 2018), https://www.ft.com/content/9ebf9e36-1271-11e8-940e-08320fc2a277. 7

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The Third Phase of Reforms: Enhancing the Market Chinese authorities have steadily tried to expand the economy in the third phase of reforms. Market-related reforms are pursued in two ways: first, rapid growth in social security and insurance policies, such as pensions, health and welfare schemes, and a sharp reduction in rural taxes. Second, industrial policy has come back on to the stage.11 The Science and Technology 15-Year Long-Term Plan laid the groundwork for China to move from a labor-intensive manufacturer of low value to a new industrial superpower in 2006.12 The concrete implementation of the idea became the infamous “Made in China 2025” at the root of the trade dispute with the USA.13 In 2013, the Third Plenum of the 18th Central Committee granted a decisive role in the economic stimulus that was introduced after the global financial crisis also affirmed the leadership role of the state-owned companies in China’s economy. The 2013 Communiqué on the State of the Ideological Environment of the Chinese Communist Party reminds everyone that China is not going to become a Western liberal economy and does not make any concessions to the leading role of the Communist Party. Nonetheless, China claimed that the global financial crisis revealed to some that the Western system had failed and could no longer serve as an example.14 The anti-corruption drive of the Party was also intended to ensure China remained fit for governance. The fusion of business and government, which in the earlier days of reform had served China so well, had now become a source of corruption.15 A new policy direction has been stated by the 19th Party Congress in 2017: Market distribution, a leading role for the public sector, and a strong emphasis on industrial development, science, and technology to achieve the goals of the First Phase of the New Era (2020–2035).

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Social Security System, “China Labour Bulletin,” October 24, 2019, https://clb.org.hk/content/ china’s-social-security-system. 12 “China issues S&T development guidelines,” accessed October 29, 2019, http://www.gov.cn/eng lish/2006-02/09/content_183426.htm. 13 “Is ‘Made in China 2025’ a Threat to Global Trade?,” Council on Foreign Relations (Council on Foreign Relations), accessed October 29, 2019, https://www.cfr.org/backgrounder/made-china2025-threat-global-trade. 14 Alicia García-Herrero, “Ten Years after the Crisis: The West’s Failure Pushing China towards State Capitalism,” Bruegel, accessed October 29, 2019, https://bruegel.org/2018/10/ten-years-afterthe-crisis-the-wests-failure-pushing-china-towards-state-capitalism/. 15 Eric Baculinao, “China’s President Xi Beefs up His Anti-Corruption Crackdown,” NBCNews.com, NBCUniversal News Group, February 27, 2018, https://www.nbcnews.com/news/ china/china-s-president-xi-beefs-his-anti-corruption-crackdown-n851491.

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Challenges China is on the path to becoming a country with high incomes. At the same moment, the income level is only one-quarter that of the OECD average. Nevertheless, to meet its centennial targets, China still requires relatively rapid development. Sustaining rapid growth has become tougher for China, now that rural surplus labor is virtually depleted, demographics are no longer providing dividends, and nominal capital returns are likely to decline. The 2013 Third Plenum of the 18th Party Congress and the report of the Secretary-General to the 19th Party Congress represent the leadership’s perception that China’s development will increasingly have to depend on increased productivity and creativity. Since the global financial crisis, productivity growth has been lagging, and not just in China. Nonetheless, the relative importance placed on state-owned enterprises inside China is not beneficial as most evidence suggests that they are less effective, partially because even inefficient state-owned enterprises are not going bust. There is also proof that a large presence of state-owned companies in a market discourages private firms from joining—yet the entrance of new firms is essential to growth. Yes, there is no high-income OECD country with a large share of state-owned businesses in the economy. The trade dispute with the United States generates a second headwind for future growth. There are multiple causes for this conflict, and the trade war is rapidly turning into a tech battle, and perhaps even a new Cold War. In this, US domestic politics played its part, but the potential reversal of China’s transition to a more market-based economy and more open polity is also a major cause. All parties will need consensus to reach a deal, but any lasting solution to this conflict would require more changes in China—strengthening structures that will make China’s mixed economy function, further expanding its markets, and gaining strategic expertise and innovations to catch up with more advanced countries. More opening will also intensify competitiveness among its firms, stimulate creativity, and increase productivity, which will be the main source of future growth. Eventually, China would do well to support international trading system reforms— a system it has been a big beneficiary of. Although China’s history of living by WTO decisions is on par with its current opponent, the regulations are ambiguous in areas of industrial policy, subsidies, and state-owned companies, and too detailed in the domestic security region. Ending them will help the conflict on both sides and the rest of the world.

17.3 The Community with a Shared Future for Mankind: Community of Shared Interest and Community of Shared Responsibility The community of Shared Future for Mankind is the catchphrase that has been used by many Chinese officials in various meetings. This concept first appeared

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in President Xi Jinping’s speech in Moscow in 2013.16 Since then, the President has used this phrase on many occasions, including in the United Nations General Assembly in 201517 and in the UN Headquarters in Geneva in 2017.18 In those speeches, President Xi raised many concerns of the world civilization as well as suggested many recommendations for the world to work together to tackle global issues, from fighting poverty to geopolitical issues. In 2017, the phrase “community of shared future for mankind” appeared for the first time in the United Nations’ document.19 Nevertheless, this concept remained somehow broad as many scholars and officials had different views on the scope of this new international system. Wang Yi, the Chinese Foreign Minister, said in his 2016 speech20 that this initiative has gone through three stages of evolution, namely “community of shared interests”, “a community of shared responsibility,” and “community of shared future” as a community of shared interests and shared responsibility are the path to the community of shared future. According to Wang Yiwei,21 the community of shared interests refers to economic interdependence, while the community of shared responsibility covers the scope of politics and security. In addition to these, Jia Wenshan22 added that the “community of universal security” is also the way to the community of shared future.

The Community of Shared Interests Despite the fact of parities or disparities of the historical relationship between countries around the world, common interests are the catalyst that tightens the ties between every state. In recent years, against the backdrop of rising unilateralism and 16

Ministry of Foreign Affairs of the People’s Republic of China, March 23, 2013, Xi Jinping Calls for the Building of New Type of International Relations with Win–Win Cooperation at the Core in a Speech at the Moscow State Institute of International Relations, Retrieved from https://www.fmprc. gov.cn/mfa_eng/topics_665678/xjpcf1_665694/t1024781.shtml. 17 UN, (2015), Working Together to Forge a New Partnership of Win–win Cooperation and Create a Community of Shared Future for Mankind, Retrieved from https://gadebate.un.org/sites/default/ files/gastatements/70/70_ZH_en.pdf. 18 Xinhuanet (2017), Work Together to Build a Community of Shared Future for Mankind: Speech by H. E. Xi Jinping, Retrieved from http://www.xinhuanet.com/english/2017-01/19/c_135994707.htm. 19 United Nations (2017), Seventy-Second Session, Retrieved from https://www.un.org/ga/search/ view_doc.asp?symbol=A/C.1/72/L.53. 20 Ministry of Foreign Affairs of the People’s Republic of China, May 31, 2016, Work Together to Create a The community of Shared Future for Mankind : Wang Yi, Retrieved from https://www. fmprc.gov.cn/mfa_eng/wjb_663304/wjbz_663308/2461_663310/t1369269.shtml. 21 Jacob Mardell (2017), “The ‘Community of Common Destiny’ in Xi Jinping’s New Era,” The Diplomat, Retrieved from https://thediplomat.com/2017/10/the-community-of-common-destinyin-xi-jinpings-new-era/. 22 Jia Wenshan (2019), “Shared Future for Mankind Highlights Interactional Dynamics,” CGTN, Retrieved from https://news.cgtn.com/news/3d3d674e786b444e33457a6333566d54/index.html.

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protectionism in the international community, China has resolutely pushed forward economic globalization, expanded the Belt and the Road international cooperation, and worked for win–win cooperation among all countries. China’s role in promoting global openness and cooperation, in fact, is very significant and is initiated at the right time. The Belt and Road Initiative is progressing at a great pace and has achieved numerous goals. This cooperation has brought countries closer as more than 70 countries are now partners. Moreover, this has enhanced the progress of globalization to the next level and more countries can see the advantages and join the ride. For now, one could say that the progress of globalization is facing hardship. Nevertheless, one has to consider that only openness can enhance growth and prosperity and, on the contrary, closing down the country means isolation in which the final result is economic ruin. And to this, as countries strive for development and growth; therefore, globalization has the willpower to prevail. For instance. Cambodia, being one of the least developed countries in the world, understands that it has to open itself up to international actors as much as possible for more development assistance and foreign investment. With that in mind, China is one of many friends that Cambodia wants to maintain a close relationship with. China is one of the biggest contributors to the economic development of Cambodia, has been trying to keep itself as close to China as possible through many different initiatives, like Belt and Road Initiative (BRI) and Lancang-Mekong Cooperation (LMC). At the same time, on China’s side, the Chinese know the importance of establishing close relationships with Southeast Asia states as it would, directly and indirectly, benefit the Chinese economy and political interests. In the last two decades, China has engaged with ASEAN on many occasions to boost cooperation in both politics and economy.

The Community of Shared Responsibility The Chinese government has expressed its dedication to the international stage for the pursuit of a new feature of international relations of mutual respect, fairness, justice and win–win cooperation, and the building of a community with a shared future for mankind.23 China also shares its values of “a shared future for mankind” with the value of multilateralism with international actors on the pathway to global peace, stability, development, and prosperity. The Chinese government also actively engages in fighting global challenges such as climate change, cybersecurity, terrorism, and major natural disasters, as the Chinese government believes that they are the threat to universal security which should be tackled through global responses, and regional and global security must be protected with common efforts.

23

Ministry of Foreign Affairs of the People’s Republic of China, 2019, February 17, Working for a Community with a Shared Future for Mankind by Promoting International Cooperation and Multilateralism, Retrieved from https://www.fmprc.gov.cn/mfa_eng/zxxx_662805/t1638512. shtml.

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Regarding this value, Beijing has become the largest donor of military aid in Southeast Asia, which some proportion of the aid flowing into Cambodia. The engagements are known as the “Golden Dragon,” in which the two states cooperatively engage in several key areas. One of the exercises on the “Golden Dragon”24 originally focused on areas such as natural disaster relief, has gradually expanded to include other areas as well. The 2nd “Golden Dragon” exercise was held on March 2018 with around 500 soldiers and lasted a little less than two weeks. Last but not least, the third round began on March 13, 2019, after weeks of rehearsals by the two sides, featuring a mix of personnel as well as equipment including helicopters, guns, tanks, and other heavy combat equipment and ammunition. Both sides also committed to fight against terrorism, promoting peacekeeping, humanitarian assistance, and disaster relief. Besides, the two states could be seen as having common values on universal security as both countries also share their responsibility to the United Nations peacekeeping force.

17.4 Conclusion The development of China reflects the importance of peace and stability. Development and investment can only be proliferated and flooded in when one country is fully stabilized and can guarantee and sustain the investment in a long period. Further, it also reflects the pragmatism of gradual and locally-based development. The progress of development is like turning the car at the crossroad which requires the driver to drive at a gradual speed; otherwise, if it is too fast it would cause a severe accident. Adding to that, the drivers also have to understand the condition of the road to comfort the driving as such, as the leaders need to understand the condition of the people to apply the strategic master plan with pragmatism to obtain the best interest and effective development. Regarding the community of shared future for mankind, the initiative to some extent remains broad and still has room to advance. The concept overall is good in many dimensions, including economic cooperation, political security, and especially the future of humanity. Therefore, there is still room to improve to jointly create a community of shared future for mankind. . The engagement between China and its partners should be expanded beyond the level of the government. Currently, there are some scholarship programs and cultural exchange culture programs, but they are still limited; therefore, these should be increased. Moreover, there should be more institutional cooperation rather than an individual. . China’s financial assistance should be more transparent. The funds and loans should be allocated more on the basis of research and development. Further, China 24

Prashanth Parameswaran, 2019, March 21, “China and Cambodia Hold Their Biggest Military Exercise Yet,” The Diplomat, Retrieved from https://thediplomat.com/2019/03/china-and-cam bodia-hold-their-biggest-military-exercise-yet/.

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should enhance and boost the role of the newly-established China International Development Cooperation Agency in assisting the international community. The agency should work closely with both the government and the people of a given country. The perceptions of the government can be drastically different from a member of the public, and this can cause a negative perception of Chinese development if the project only consults with the government and the public see a lot of negative impacts.

Chapter 18

“China’s 70-Year Development and the Building of a Community with a Shared Future for Mankind”: A Pakistani Perspective Syed Asif Salahuddin

Today the topic of my speech at this august forum is comparison and enlightenment of poverty alleviation and reduction between China and abroad. Indeed, this is a hard topic worldwide, as each nation is confronted with the task of providing a better life to its people. In this connection, China’s achievements are marvelous. Over the years, it has come out as a model in poverty-reduction campaigns. In my country, we are also facing challenges of poverty and hunger, and I am glad to inform you that our Prime Minister Imran Khan, soon after coming into power a year ago, cited China’s model, while making his pledge to the nation to build a healthy and prosperous society. Since day one, he has been trying to enforce China’s model in Pakistan in his efforts to bring down the rate of poverty. The media in Pakistan was trying to enlighten the government and the society about the negative impact of poverty on the development of overall socio-economic development. Even my colleagues in my news agency, the Independent News Pakistan, used to write articles and news on the importance of poverty alleviation in the pursuit of development. As far as I can tell, social injustice, inequality, and economic exploitation are the root causes of poverty. As a nation, we have to curb these evils by all possible means, to achieve the desired goals. I am glad to note that this year marks the 70th anniversary of the founding of the People’s Republic of China. It seems China is in a year of diverse activities, but poverty eradication is clearly the top priority as the 2020 deadline of alleviating poverty is approaching. Notably, poverty eradication goals, among other rural development aims, are solemn promises made by the Chinese leadership to Chinese people, especially rural people. I must say that, consistent with China’s meteoric economic transformation, China has made remarkable headway in alleviating poverty over the past four decades. It is remarkable that China is marching S. A. Salahuddin (B) Independent News, Islamabad, Pakistan e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_18

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toward eradicating poverty very successfully, and the Chinese leadership promises to completely eradicate absolute poverty by 2020. So, if we compare China’s achievements in poverty reduction with the rest of the Word, I must say China is number one, since it is doing this in the shortest span of time, improving the living conditions of their people. So, I must congratulate the Chinese nation and its leadership for their leading role in the socio-economic development of their people. At the end of my speech, I wish that our great friend China always stays high on the path of peace and progress, not only for its people but the entire world as a whole. Thank you very much for giving me a patient hearing.

Part II

World Order

Chapter 19

“China’s 70-Year Development and the Building of a Community with a Shared Future for Mankind”: Spain’s Perspective José Luis Centella Gome

We are living at a moment where we are drawing near to the obvious end of human history. Many things unknown are still to be found at the moment and so are many dangers which include threats to life on earth as we know now. The question is, at this historic juncture, should we stand the side of the old and outdated or should we choose to build the future, a choice that might incurs risks. From this perspective, we can see the contribution of the reform and opening up policy to the choice we are to make. The policy proposed the building of a multipolar world where people of all countries can live a life of dignity, a proposal that transcended the unipolar world built upon what we called the “North Atlantic Axis.” To realize this multi-polarity vision, President Xi Jinping put forward a new framework of international relations based on openness, cooperation, and dialogue among civilizations. The major objectives of this scheme are to ensure that natural resources and wealth are leveraged to improve the life quality of all residents of this planet, that everyone can live peacefully where they are, and that war will no longer be a tool used by some countries to control and manipulate other nations. It’s worth pointing out that this proposal doesn’t come from “a passing whim.” It is a natural development of the foreign policy of the People’s Republic of China (PRC) since Chairman Mao announced its founding at the rostrum of Tiananmen Square on October 1, 1949. The difference between 1949 and now is that China’s current standing on the world stage enables it to pool strengths and consensuses around the world, making the multi-polarity proposal a worthy challenger of the hegemony imposed by the North Atlantic Axis. In this sense, I believe the victory of the Chinese revolution in 1949 is the prologue of what we see in China today. It lays down the foundation of the PRC. The Belt and J. L. C. Gome (B) The Communist Party of Spain, Madrid, Spain e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_19

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Road Initiative (BRI) is deemed as China’s best offer to other countries because it denotes a new type of relations marked by unity, cooperation, peaceful co-existence, and mutual benefits. In other words, the building of a multi-polar world without neo-colonialism. A set of statistics shows that the Chinese revolution greatly improved the living standards of the Chinese people. From 1949, the average life expectancy in China doubled, rising from 32 to 65 while the literacy rate increased from 15 to 85%. Women were liberated from their hell-like situation. They no longer bound their feet and began to enjoy rights their predecessors had never tasted as arranged child marriage was abolished together with other repressive rules and practices. Besides these improvements on life quality, the revolution also brought a brand new understanding of international relations which surpassed group politics and established the five principles of peaceful co-existence. In 1953, Premier Zhou Enlai proposed these principles that honored mutual respect, non-interference in the internal affairs of other countries, equality and mutual benefits, non-aggression, and resolving international conflicts through negotiations and dialogue. President Xi Jinping applied these principles to the current international landscapes, paving the road to the building of a community with shared interests that can narrow the wealth gap in the global society and benefit all nations. It is by necessity that we should create a world of peaceful development where people subject to the exploitation of the “First World” can own their own wealth and natural resources and put their right to development at the center stage of economic, political, and ecological advances in a balanced and sustainable manner. China’s proposal clearly presented that peace is realized by changing the international order and restore the original aspirations of the UN Charter, not by advocating radical militarism or the colonial economy dominated by the IMF and central banks in the West. Starting as a plan to build and connect the infrastructure networks across the five continents, the BRI is an initiative that aims to help countries with difficulties in Asia, Africa, and Latin America raise their living standards through cooperation programs in the societal, economic, and cultural fields, capacity building, and coordination of development strategies. However, it would be wrong to label it as a portfolio of economic and commercial projects. BRI is more than that as it can be seen as a golden opportunity to forge a new international order in the global efforts to seek cooperation and unity. Therefore, it is worth stressing the importance of relating the New Silk Road proposed by President Xi to the five principles of peaceful co-existence as it is an ideal tool to end power politics and restoring the aspirations of the UN Charter through multilateralism. In other words, the BRI signals a possibility to create a new world, a vision that means hope for billions of people who are suffering from poverty, diseases that could be cured elsewhere, and all kinds of scarcity. As I said at the beginning of my speech, celebrating the first 70 years of the PRC helps us fully grasp the implications of the founding of the country. Any current

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success would be impossible without the political system and ideology built in the past seven decades. From the perspective of Spain, BRI connects the Greek port of Piraeus with the Spanish ports of Barcelona and Algeciras, promoting connectivity across the Mediterranean and opening a new route to Latin America from the Atlantic. In doing so, the New Silk Road finally completes a journey around the world. In this context, we need to bear in mind that dominating economic groups are pressuring other countries in a bid to maintain their domination. They want to depict China as a dangerous competitor who must be greeted by confrontation. Yet here I want to point out that in Spanish society, a considerable portion of people from different economic, political, and social sectors are utilizing China’s growing interest in Spain, especially Spanish culture, to strengthen the ties between the two countries in economy, commerce, culture, and society despite the setbacks. They are trying to make consensuses possible and grant Spain an important role in BRI. At the end of my speech, please allow me to answer the question I raised at the beginning. It’s time to fight for the future and become part of the new world whose birth is a necessity. It will be a multi-polar world of unity and peace where a life of dignity is accessible to all of us on earth.

Chapter 20

Consultation, Contribution, Shared Benefits, and Global Governance Fazel Karim Fazel

20.1 Introduction Intergovernmental cooperation is at the centre of global partnership for development. It has a vital role to play in the achievement of global development goals, in terms not only of the resources and technical assistance it can provide, but also in the areas of policy decision-making and norm-setting. Global governance holds institutions, policies, norms, procedures, and initiatives through which states and their citizens try to bring more predictability, stability, and order to their responses to transnational challenges. Effective global governance can only be achieved with effective international cooperation. Some Asian countries have suffered heavily from poor governance, social unrest, and violence, partly due to the interference of superpowers and terrorism. People have paid a big price for the uncertainties that have hindered development. The question remains of what is wrong with this part of the world? Issues concerning the region’s countries like peace and security, refugees, terrorism, and issues affecting economic and social progress, are all linked with underlying questions of global governance.

20.2 Discussion The countries of the world are at different stages of development and have their own different histories and cultures, but the people of all countries share a common desire for peace and development. It is also the goal and commitment of the ruler of every country to raise the country’s economic and social development level with a view to F. K. Fazel (B) Shamshad Radio and Television, Kabul, Afghanistan e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_20

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bringing people out of poverty and improving their quality of life. People of those countries agree that a country should also accommodate the legitimate concerns of others when seeking its own development and the common development of all countries is the only way for a country to achieve its sustainable development. It is argued that international cooperation and the resulting governance mechanisms are not working well. First, the current global governance system is not properly equipped to manage the growing economic integration and interdependence among countries, both of which are compounded by the current globalization process. Second, global governance structures and rules are characterized by severe asymmetries in terms of access, scope, and outcomes. While developing countries must abide by or shoulder the effects of global governance rules and regulations, they have limited influence in shaping them. Meanwhile, the unbalanced nature of globalization implies that important areas of common interest are currently not covered, or are only slightly covered, by global governance mechanisms, while other areas are considered to be overdetermined. These deficiencies have contributed to the generation of asymmetric outcomes among countries and have had important implications for inequality at the national level as well. Finally, current approaches to global governance and global rules have led to a greater particularly in developing countries than necessary for the efficient management of interdependence; this also prevents the reduction of inequalities within countries. Regional countries should work on new concepts of global order, security, and development civilization, to pave the ground for consultation, contribution, shared benefits, and global governance, to create realistic values for promoting lasting peace, stability, and development in the region. A consultation, contribution, and shared benefit is an important part of the thought on major country diplomacy for the new era. It is the basic principle for each country to participate in global governance and an effective way to build a community of a shared future for humanity. Developed and developing countries should jointly discuss plans for development, solve problems together, jointly build cooperation mechanisms and share a bright future. All participating countries should strengthen mutual trust and jointly resolve international political disputes and economic contradictions through consultation. All countries should follow the four golden principles of prosperity of their nations, which are consultation, contribution, shared benefits and global governance.

20.3 Summary A new concept for the international order and a new rule for international governance is to establish the mechanism for jointly building through consultation to meet the interests of all. It is important that all countries should have an equal say in international affairs. Therefore, by working together we will learn from others to make up for our shortcomings, and advance human civilization, promote mutually beneficial cooperation and contribution, and raise awareness about human beings

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sharing a community of common destiny and benefits. Furthermore, it is important to find joint responses to the challenges mentioned by boosting the relation between the countries in the region and a comprehensive governance concept is required that advocates lasting peace and universal security.

Chapter 21

In Search of an Alternative to the Failed Global Neoliberal Order Volodymyr Sidenko

In 1990s, the globalization process based on neoliberal foundations seemed to have triumphed irreversibly, while the notorious Fukuyama’s 1992 bestseller titled The End of History and the Last Man1 postulated, the final victory of the Western liberal democracy as the universal form of human government, following the collapse of the Soviet Union. However, after only a decade, the 2008–2009 global financial and economic crisis disrupted the growing trend of neoliberal globalization. Coupled with serious setbacks in market democracy transformations in different areas of the world, especially in the post-Soviet space and the North Africa and Middle East Islamic states, it brought about not only massive economic and social failure but also a prolonged period of global frustration and uncertainty. In fact, the appearance of deglobalizing trends revealed the inadequacy of the model of global order based on assumptions of neoliberal economic orthodoxy and the universal template of Western-type democracy. However, it was not the predicaments of losers but the success of winners among emerging market economies that changed the overall balance of power and ignited the process of revision of the global economic and political order. The new trade policy of US president Donald Trump, guided by the principle “America First”, de facto launched the far-reaching dismantling of some the basic pillars of the global order. It advocated American nationalism, unilateralism, protectionism, and, to certain extent, isolationism, which substituted the policies of American transnationalism that had been the main driver of neoliberal globalization for several decades. Thereby, various anti-globalization movements and organizations 1

Francis Fukuyama (1992), The End of History and the Last Man, Free Press.

V. Sidenko (B) Foreign Economic Policy to the President of Ukraine, Kyiv, Ukraine e-mail: [email protected] Razumkov Centre, National Academy of Sciences of Ukraine, Kyiv, Ukraine © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_21

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throughout the world found potent support for their efforts. The withdrawal from the Trans-Pacific Partnership (TPP) Agreement and Paris Climate Agreement, the exit from UNESCO, the blocking of the dispute settlement mechanism of the WTO (coupled with intentions to exit this institution if it is not reformed according to American desires), and the aggravation of the US-China trade dispute associated with massive protectionist measures are only some of the most visible components of the process of ongoing global institutional disintegration. Although the U.S. Biden administration has reversed some of these measures, it has not changed the general more nationalistic stance. The power policies based on nationalism that gained momentum have exacerbated multiple overt and hidden conflicts across the world (similar to the 1930s) and hit even the most prosperous regions. The latter has been vividly demonstrated by the development of crises within the European Union. However, the worst thing we could do under these circumstances is simply to regret or deplore such a course of events. We need to explore the roots of these tendencies and try to find workable remedies to cure the current global affliction. In fact, we have witnessed a rise of diverse worldwide alter-globalization movements, involving some political and business leaders, academics, NGOs and global networks. Since the climax of neoliberal globalization in 1990s, a number of seminal scientific investigations containing alternative approaches have been undertaken worldwide. This large-scale intellectual and political movement has put forward some major ideas and proposals. Among them, one could mention an extensive programme for restructuring, democratizing, and properly managing globalization, to make it serve the poorer countries: a global social contract between developed and less developed countries (Stiglitz, 2006).2 Within the broad range of intellectual concepts and political solutions that have been offered several ideas deserve special attention. First is certainly the idea of cultural diversity and the needed dialogue (or partnership) of different civilizations (see Table 21.1). Second, we refer to the idea of diversity of the ways and models of development. It is closely connected with the UNESCO Universal Declaration on Cultural Diversity on 2 November 2001,3 with its Article 3 proclaiming cultural diversity as a factor in development. But what is especially important is that it has produced the idea of diverse models of economic development. Many in-depth research endeavors have been done in this vein. One could mention, for instance, the emphasized link between cultural foundations and development and the concept of New Pragmatism, the latter being based on a strategic approach to future development and its active shaping up in a desired direction, proceeding from a specific and changing (in time and space) coincidence of development determinants

2

Joseph E. Stiglitz, Making Globalization Work, New York—London: W.W. Norton & Co., 2006. UNESCO Legal Instruments, http://portal.unesco.org/en/ev.php-URL_ID=13179&URL_DO= DO_TOPIC&URL_SECTION=201.html. 3

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Table 21.1 Selected major contributions to the development of the concept of dialog (partnership) of civilizations Country or international organization

Authors and sources

United Nations

On 9 November 2001, the UN General Assembly adopted its Global Agenda for Dialogue Among Civilizations, setting out the principles and objectives of intercultural dialogue

United Nations

United Nations Alliance of Civilizations (UNAOC) established in 2005 as the political initiative of Kofi Annan, former UN Secretary-General, co-sponsored by the governments of Spain and Turkey. Its mission has been to explore, by a high-level group of experts, the roots of polarization between societies and cultures and to recommend a programme of action needed to address this issue. The UNAOC’s Secretariat is based in New York. The Alliance maintains a global network of partners including states, international and regional organizations, civil society groups, foundations, and the private sector. Its four priority areas for action embrace: Education, Youth, Migration, and Media, with possible adding “Women as Peace Mediators” as the fifth pillar of UNAOC4

Multi-lateral non-government international The Dialogue of Civilizations (DOC) founded in 2002 by Jagdish Kapur (India), Vladimir Yakunin forum (Russia), and Nicholas F. S. Papanicolaou (USA) Since 2003, DOC conducts the annual Rhodes Forum involving representatives of international NGOs, the world’s media, and research centres of North and South America, Europe, and Asia, in fact creating a widespread international expert network Since 2013, the DOC has enjoyed Special Consultative Status with the UN Economic and Social Council (ECOSOC), and also collaborates with the UNESCO Germany (with representative offices in Moscow and Vienna)

The Dialogue of Civilizations (DOC) Research Institute, an independent think tank founded in mid-2016 with the mission to research (in the areas of Cultures and Civilizations; Economy, and Governance and Geopolitics) and develop proposals that address the key challenges faced by the international community, promoting conflict resolution based on equitable dialog (continued)

4

United Nations Alliance of Civilizations, Who We Are, https://www.unaoc.org/who-we-are/.

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Table 21.1 (continued) Country or international organization

Authors and sources

Russian Federation

Fundamental works of B. N. Kuzyk and Yu. V. Yakovets5 presented a systemic approach to possible systemic transformation of the global socioeconomic order. These issues have been regularly discussed in publications in the “Partnership of Civilizations”, international scientific and educational journal, co-published quarterly since 2011 by Pitirim Sorokin-Nikolai Kondratieff International Institute; Institute for Economic Strategies; the International Global Research Academy, Faculty of Global Processes of Lomonosov Moscow State University, MGIMO-University Center for Partnership of Civilizations and other institutions

Source Author’s compilation based on different sources of information

(Kolodko, 2011).6 US scholar D. Rodrik (2007)7 presented convincing evidence against uniformity in policy space and articulated the importance of local knowledge and institutional diversity. In particular, he postulated that leaders of the advanced countries will have to provide room for poor nations to develop their own strategies of institution-building and economic catch-up. Third, the idea of the recoupling of economic and social development has moved to the forefront, in particular due to the efforts of David Snower, former director of the Kiel Institute for International Economics, and President of the Global Solutions Initiative. This institutional framework annually (since 2017) hosts Global Solution summits (an associated event for the G20) involving participants from over 100 countries, and publishes the Global Solutions journal (quarterly) that advocates global paradigm change for a sustainable world order (see Snower, 2019).8 It has emphasised the importance of harmonisation of economic and political paradigms, cooperation in order to benefit one another, supporting personal empowerment and social solidarity, creating new moral narratives and controlling self-interest in favor of social groups, moving from corporations that maximize shareholder value to those driven by social purpose. The agenda of Global Solutions rejects both nationalism

5

Yakovets, Yu. V. Selected Works, Volume III: Strategy for Sustainable Development and Partnership of Civilizations. Moscow: Saimon Kuznets International Institute, 2017; Kuzyk B. N., Yakovets Yu. V, Civilizations: Theory, History, Dialogue and the Future. Vol. 1, Moscow: Institute for Economic Strategies, 2006. 6 Grzegorz W. Kolodko, Truth, Errors, and Lies: Politics and Economics in a Volatile World, translated from the Polish by William R. Brand, New York: Columbia University Press, 2011. 7 Dani Rodrik, One Economics, Many Recipes: Globalization, Institutions and Economic Growth, New Jersey–Woodstock: Princeton University Press, 2007. 8 Dennis J. Snower, “Toward global paradigm change,” Global Solutions Journal, issue 4, March 2019, pp. 12–32.

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and globalism, in favour of diversity, multiple, multi-level identities, and calls for a redesigning of multilateral international institutions to resolve urgent global issues. Fourth, multiple institutional frameworks have emerged to assist in the green (ecology-friendly) restructuring of the world economy. One of the most influential among them is the Global Commission on the Economy and Climate, which comprises former heads of government and finance ministers, and leaders in the fields of economics, business, and finance. The Commission has formulated the agenda (flagship project) on “The New Climate Economy” (see its report for 2018).9 Thus, we witness a rapidly proliferating intellectual and political movement towards reshaping the existing world economic, political, and social order. Against this background, the Chinese concept of a shared future for humankind appears to be of special importance. This is not only because to its origination from the top political level of a major superpower: the idea was initially introduced by President Xi Jinping during the 18th National Congress of the Communist Party of China (CPC) in November 2012, and later developed in his speeches at the UN and the 19th CPC National Congress in October 2017.10 Moreover, it attracts attention not only because it introduced a new policy stance of China towards a pronounced activism to enhance global governance and exploring new models of win–win cooperation for world development. What is even more significant, it appeared as a new philosophic paradigm for the New Era of world development (Zhao Xiaochun, 2018).11 The strength of this conceptual perception is determined by the set of its fundamental characteristics: (1) the multi-faceted character of the concept, embracing economic, political, security, ecological, and cultural dimensions as integral parts; (2) its being based on an extensive absorption of the best ideas of an alternative world order that have been developed worldwide and are partly and concisely represented in this article; (3) its focus on the future, creativity, and its emphasis on exploration of new opportunities deriving from the new breakthrough technologies that are to be employed in a win–win manner but not as a zero-sum game or an instrument of technology-based domination; (4) its innovative approach in the sense of the rejection of opportunities to use the status of a great power exclusively for the sake of its own national interest but appealing instead to greater global responsibilities; 9

Global Commission on the Economy and Climate, “Unlocking the Inclusive Growth Story of the 21st Century: Accelerating Climate Action in Urgent Times: the 2018 Report,” https://newclimat eeconomy.report/2018/. 10 Xi Jinping, “Secure a Decisive Victory in Building a Moderately Prosperous Society in All Respects and Strive for the Great Success of Socialism with Chinese Characteristics for a New Era,” work report delivered at the 19th CPC National Congress, Beijing, October 18, 2017, https://www. xinhuanet.com/english/download/Xi_Jinping’s_report_at_19th_CPC_National_Congress.pdf. 11 Zhao Xiaochun, “In Pursuit of a Community of Shared Future. China’s Global Activism in Perspective,” China Quarterly of International Strategic Studies, Vol. 4, No. 1, 23–37, https://doi. org/10.1142/S2377740018500082.

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Table 21.2 Main features of alternative concepts of globalization: neoliberalism versus shared future for mankind Neoliberal concept

Shared future for mankind concept

General methodological basis

Explicit domination of economic thinking: social progress is derived from economic

Multi-faceted comprehensive approach to economic, social, and human development as mutually supporting

Main policy targets

Search for greater individual (group, national) benefits and profits (rate of return on invested capital)

Search for common benefit, with greater responsibility of great powers; serving public goals with best possible economic efficiency

Basis for shaping policy models

One-size-fits-all approach

Unity in diversity principle

Policy outcomes: distribution of incomes and benefits

A zero-sum game: “the winner takes it all”

Typically, a win–win situation

Environment protection

Forced cuts in harmful Green economy as a cultural emissions and pollution of the imperative environment, to avoid negative externalities

Social sustainability

Education and health as individual human capital assets + rising individual material welfare

Education and health as largely public (social capital) assets + rising individual material welfare coupled with broadly defined social policies

Competition versus cooperation and solidarity

Prevalence of competition

Balance between competition and cooperation and social solidarity when needed (no one to be left behind)

(5) it does not confront the ideas of unity and diversity in a mode of thinking derived from Samuel Huntington’s “clash of civilizations” but seeks unity in diversity: it postulates diversity not as a source of conflict (which is actually happening in today’s world based on the “we vs. they” dichotomy and hostility towards “the others”) but as a source of creative development; (6) it signifies a clear departure from the policies of conquering nature towards coevolution of human society and nature, which appears not only as a matter of survival for humanity but as an aesthetic (cultural) imperative; (7) it is much more functional than previous endeavors to reshape the world order because of its reliance on huge resource allocations. The latter is especially visible in the case of infrastructure allocations within the implementation of the Road and Belt Initiative. The substantial differences between the basic features of the traditional neoliberal concept of globalization and the proposed “shared future” concept are summarised in Table 21.2.

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The current period of a certain reversal in the globalizing process is closely connected not only with the revival of old protectionist policies but also with the need to transition to alternative modes of global development. Such a transition is likely to be an extremely difficult endeavor. The most significant barriers on this way are the inertia of human behavior and deeply rooted social traditions in shaping life preferences and building trust in social institutions. In fact, we usually perceive socially significant ideas through the lens of personal experience and interests. The methodological individualism underlying the neoliberal economic and social model rests on these fundamental premises and vastly exploits the human propensity to act egoistically. For some nations (representing the Anglo-Saxon model), unrestricted individual freedom is the basic cultural foundation. However, in other socio-economic models, we see a different picture where personal and social foundations are mixed specifically, and common interests and values may prevail, and this appears similarly as a cultural phenomenon. This cultural divergence poses a highly important question: How can we share our future if our “cultural genotypes” differ? Historical experience proves that this problem cannot be solved efficiently by endeavors to transpose national institutions of the most advanced nations to the others, whether it is done in the framework of “best experience sharing,” political advice, or conditions-linked foreign financial aid, or as a precondition to integrate into a regional community (like the EU). Quality institutions really matter for development and economic prosperity—Daron Acemoglu and James Robinson12 were right in many of their findings on this issue. However, the cultural foundations of nations matter even more than institutions: they are more deeply enshrined in human nature than formal institutional arrangements and are not subject to rapid changes. You can reform your formal institutions quickly but never your culture and those informal institutional forms that it determines. Nevertheless, human culture evolves in the course of human and social development. Thus, the only viable way to bring differing cultural structures closer and provide a basis for sharing of their important elements is a continuous and extensive cooperation and common effort in attaining significant public goals. Common institutions may appear much more easily resulting from continuous and mutually important interaction. This methodological principle has three major implications, on which we are to focus our policies: • Creating more opportunities for nations to communicate, with due regard to issues of national security; • Investing more in areas of common interest, with equal access to various modern business and social infrastructures and equal opportunities to be engaged in technological progress; • Emphasizing aggregate long-term return over short-term profitability, and broad social efficiency over narrow financial profit. 12

Daron Acemoglu and James A. Robinson, Why Nations Fail. The Origins of Power, Prosperity, and Poverty, New York: Crown Business, 2012.

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The required radical evolutionary change in globalization policies also depends on a new brand of global leadership and global responsibility. It will not be compatible with the old type of centre—periphery relationship and efforts to impose an institutional template on less developed nations and punish those who deviate from it. It will have nothing to do with forceful and premature opening by leading nations and international financial institutions of underdeveloped national financial markets or land markets. Those who are in charge of formulating the global development agenda are to focus more on capital formation and innovative capacity in developing nations than on financial austerity. The latter does not mean irresponsible monetary and budgetary policies. But to ensure better global governance, we must realize that the process of financialization of the global economy has reached a hypertrophied scale: it overshadows the development of the real sector of the economy and, in fact, distorts the criteria of long-term efficiency of socioeconomic development. The new global economy of the future can hardly emerge if based on selfish Homo oeconomicus, the concept that for several centuries has been the basic principle and building bloc of economics worldwide. The new global leadership needs a much broader understanding of the nature of human behavior, which will necessarily become meta-economic. The Chinese concept of a shared future for mankind, which is based on rich insights in the nature of the human spirit and the forms of social relationship, opens up new prospects for a concerted global evolution in this direction.

Chapter 22

Building Power and Justice for a New World Süleyman Sensoy

22.1 Nature of State and Life: The New Ecosystem When, having looked at the basic trends, global competition has been developing over “micro-nationalism”, “integration” and “unpredictability” in the new economy age based on the “knowledge and knowledge-based products” following the “earth and machine”; and the challenges determining the new nature of life and state are being formed as basic references as a “source and sharing crisis,” unsustainability of the “production-consumption-development” formula, “elimination of middle class”, “energy, water and food insecurity,” going to the “4th Dimension” in every field of life, “elimination of human source in labor”, “transforming to soft power from hard power” based on the changing nature of states and expectation management. Within all of these basic parameters, the transformations in technology tend to change human life and nature entirely by developing, based on artificial intelligence, virtual/refined reality, and mobility. It is obvious that the “Industry 4.0” and “Society 5.0” concepts are important titles in terms of managing the transformation of the world. Another factor is the turbulence that China created by getting more involved in the world stage with each passing day. The New Silk Road project “Belt and Road” has been shaping as the global integration project involving 64 countries both from sea and land and permanently changing the distribution of the financial pie. Along with all of these developments, the “Ecosystem of Security” changes with its law. From now on, the Security-Democracy dilemma will be witnessed much more. Because the survival of democracy is very difficult in countries where the middle class melts and security axis slides on a sophisticated level. The question “Will security bring us authoritarian regimes?” should be discussed more. It also should be seen that S. Sensoy (B) Turkish Asian Center for Strategic Studies, Istanbul, Turkey e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_22

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authoritarian regimes or chaos lie as two alternatives in the countries which lack a middle class. How to make the division of labor in terms of regional and global security and how to share the cost are in line to be key issues of the coming period. The development of new security alliances can be analyzed from the risks and initiatives of various countries, especially Turkey. The content of the concepts “property” and “power” has been changing historically. The future of the EU within the syndrome of “failure in success” will be determined by the results of polarization which is revived in the West after Brexit and similar to pre-World War II. New weapons declarations of Russia, one of the new global power candidates, and gold guaranteed yuan and oil trading of China have been milestones for the security ecosystem and reserve money, by the way, the meaning of Brexit in its effect on the balances has been a little further behind.

22.2 Security of the Future Having been defined in the First World War, “Security” has begun to take place on the basis of international affairs. These deductions, which were re-defined in the Second World War, took its latest form with the Cold War, and was institutionalized in the security system that is established and managed by the international system. Last but not least, the traditional security approach has been interpreted by the United States’ announcement of its strategy to combat global terrorism after the September 11 attacks and the fact that all stakeholders in the system have been part and practitioner of this strategy. The radical changes in the international system since the 1990s and the technological developments brought about by globalization have led to the emergence of new threats in modern times and the current threats to undergo a change in shape. With the inclusion of non-state actors and non-military threats in the international system, the current security environment has become multidimensional, and in parallel, the need to update the methods of struggle has become a necessity. The terms “war”, “power,” and “peace” contain the most effective descriptions to understanding of the security environment until after the Cold War. The predecessors of traditional security assume that the violent tendencies of the past will continue in the future. Besides, they think that the only way to deal with the security environment of the future is only possible to take the lessons from the past and evaluate that the maximizing of power will maximize security as well. With the end of the Cold War, concepts and patterns that constitute the security perception of this period have also been transformed, and the terms used in defining the traditional understanding of security have been changed along with globalization and technological development. The concepts of army, facade, arms, and battlefield of traditional security concept have been exposed to extraordinary changes and transformations, and the whole

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world has almost become a tug of war. This has led to the creation of a “multidimensional” field of “security” that is open to asymmetric threats that are difficult, even hardly predictable, of the source, time, and shape. Along with the new security concept, risks such as international terrorism, organized crime syndicates, non-state armed actors, cyber terrorism, aggressive international states, and the proliferation of conventional and weapons of mass destruction pose a threat to nation’s physical existence. When we consider war within the definition of Clausewitz as the “continuity of politics with other means,” it is evident that the conflict and war environment will continue as long as there is political space, even though it has evolved as mentioned. In the evolution of war, there is no doubt that technology has played the most decisive role. Developments in electronics, communication, and material technologies in the second half of the twentieth century have made significant advances in the military field. The reflections of these developments in the twenty-first century have radically changed the way in which war is carried out. The development of communication technologies, geopolitical developments, and the emergence of non-state actors (organizations, micro-nationalism, terrorism, etc.) rather than nation states has caused war to be carried out with new procedures, tactics and systems. In this new approach, called the “Fourth Generation War,” much smaller, more mobile, interconnected units in a network-centered structure have been used as a part of political, economic and social operations. In the first concrete examples of the Fourth Generation War, such as the Libyan War, the Syrian Civil War, and the Afghanistan War, it is seen that states used nonstate actors for their political and military goals and that the wars were carried out in the form of a “proxy war” rather than being openly declared or waged on battlefields. Guerrilla warfare and other irregular warfare strategies step forward. Psychological warfare, electronic warfare, and cyber warfare are used for tactical and strategic results. In today’s world where technology has not yet deactivated the human factor, at a point where technology is providing support services for security activities, types of equipment that can empower people ten times more than people have, merged facilities that do not miss the threat during the observation and sophisticated means of destruction for human use, can be seen as the constantly updated form of the humanitarian strategies that planed against humans, which are longstanding. The first examples of the unmanned security areas that we currently witness will be the most common phenomenon we will encounter in the near future. It is necessary that the facts, targets, paths, and even the results should be re-evaluated in different ways when vehicles become unmanned, and then the battles and finally the areas to be evaluated in the whole security and defense are changed. The security of the future will, in fact, be shaped around future needs and generalized living conditions. In a study carried out on the Internet, one of our daily indispensables, even in a publication published in 1996, “a network of non-governmental actors (such as the Internet) will take advantage of the information revolution and a new kind of social conflict that will continue to be formless, low-intensity, and oriented towards the institutions will be raised” thesis can be put forward.

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The blurred positioning of the subject matter of “security” brought by globalization has long been debated on the individual-society-state scale and will be acutely better positioned in near future. Although the technology and individual needs are known to have an effect on this positioning, the point which to bring it is not clear. It can be seen that the change in the social and public acceptance of the concepts of high/low politics will determine the scope and means of security, which is part of the concept. Beyond the approaches built on a futuristic imagination, the securitization of the phenomenon of the future is the rational re-evaluation of the foreseen future conditions before human society and the state within the context of security phenomena. Actually, the future should be assessed in terms of qualification of the point of planning and shaping to prioritize subject matter.

22.3 Expectation Management Yusuf Has Hacib, a Turkish scholar, once said: “An army with many soldiers is essential for keeping a country. Many facilities are necessary to sustain such an army. These facilities depend on the people living in prosperity. Prosperity of people depends on just and proper laws. If one of these will be neglected then the rest of them would be dysfunctional. If all the four of them are neglected then the core of the state would tend to disassemble.” A state maintains its existence as long as it provides a prosperous life for its citizens by fulfilling their needs for safety, property, etc. For this reason, it is asserted that the aim of a state is “to provide the maximum level of service to the greatest number of people”. The continued existence of the state depends on not only its current actions but also its reliability in the eyes of its citizens in terms of their future expectations. This suggests how the concepts of legitimacy and expectation management are substantial for the continuation of the state. Throughout history, there have been some theories on how the best possible actions can be ensured by states, and some of them have tried to develop suggestions based on the individual while some others have done so by focusing on the society. An individualistic state approach rests upon the idea that the happiness of any given society depends on the happiness of each individual of it. Thereby, according to this approach, the state’s actions must be minimized. Conversely, a social approach rests upon the idea that happy individuals and social development are possible only where a good social life exists, and that therefore the state must have a central role on the public sphere and quite extensive action capacity. The nation-state, as is known, is a modern concept that emerged from changing political structures going back to the Middle Ages. In the beginning of modern period, as states were trying to form nations, throughout the nineteenth century, depending on the growing nationalism, “nations” tended to build their own states and eventually “nation-state” became a norm-political structure of the time.

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As a result of the opinion arguing for the ultranationalist movements, however, are the main reason for both the First and Second World Wars, and the efforts of the states to maintain their functions within a global liberal capitalist system have caused, a certain extent, the deformation of nationalism and to become intense the integration efforts based on the “common market.” A change started from nation-state to market-state and the first example of this is EEC/EU. This change still continues all over the world. Particularly, considering the facts that China has experienced during the last three decades, in terms of giving priority to the individual or state, it is being observed that the nature of the state has also been ideologically changing. The world has experienced many state practices such as socialism, and as if not went to plan communism or liberalism has also been tested. For the purpose of ensuring a coherent relation between the ideological tendencies of different social segments and making the perception of legitimacy permanent, the practices of the “social state” perspective have been implemented especially in Western-European countries. A model of “state capitalism” that is currently embodied by China itself is going through the phase of testing. The changing nature of the state means changing regulations-laws in domestic affairs and changing strategic tendencies in foreign affairs. Changing laws or regulations sometimes causes other changes in strategic tendencies and some other times strategic tendencies can have some dominant effects on domestic policies. For this reason, domestic affairs and foreign policy interactions need to be arranged in a correct and suitable way. It is possible to say that we have been in a new systematic solution-seeking process within and in parallel with the changing nature of the state; and in this sense the world system has not arrived at an ultimate phase of a state understanding yet. Rather, we are still looking for a better system. Furthermore, it can be said that we have been passing through a long-standing system crisis. There have been many serious attempts and studies on how we can deal with many issues such as welfare, unemployment, social security, and equality between societies within the framework of the changing nature of the state. It is still difficult to find exact answers to the questions that would underpin this pursuance such as “Will capitalism continue its existence?” and “How long will the US be able to continue its leading capacity for the world?” However, it is possible to make some predictions over the legitimacy perception which is one of the fundamental concepts of political science. The concept of legitimacy must respectively be addressed both at national and international levels. At the national level, legitimacy requires that a successful and persuasive perspective on the citizen’s concerns and expectations about the future is provided by state; and their confidence and consent should be well- matched with the state. This is also a prerequisite for a country’s domestic and foreign policies. At the international level, legitimacy is a crucial concept for the continuation of the current international system and can keep its functionality as long as it satisfies the expectations of all the efficient actors at the international system level.

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Today, in terms of terrorist acts, it is also vitally important that legal use of force by a nation-state is open to accountability. Losing its resort to the use of force may lead to “wars” that will be made between terrorist groups and “legitimate” states in the future. Today, these thoughts lie behind the conflicts and tensions that are still persisting in countries such as Iraq, Syria, Somalia, Afghanistan, and Pakistan. In our age when every aspect of life has started to be controlled by the economy, “expectation management” also has gradually become a priority/method that is being focused on largely by global powers in particular, in the context of both being guaranteed the legitimacy of the state and the direction of domestic-foreign policy interactions, as well as being influenced by the foreign policies of other countries by public diplomacy efforts. “Expectation management” is not only the basic reference of the state’s success but also the basic component of the power of determining the security and course of action in both domestic and foreign policy. For this reason, during the forthcoming period, to be able to manage the expectations of the citizens by states like Turkey scale will be a determinant of security by controlling external effects and enhancing internal cohesion or integrity. Because of their limited facilities and economic problems, it is inevitable that the countries where the expectation management cannot be realized well drift into a state of chaos and are manipulated. There are things must be done so that expectation management can be achieved, such as keeping the image of the honest state for its citizens, promising less but providing more services, meeting needs before they are demanded, keeping the ties or communication between the citizens and the state, providing scientific, critical reports on the state’s implementations on a regular basis and developing new and coherent policies based on the feedback resulting from these reports. The most important point is to keep the confidence of citizens in the state and enable them to be proud of their state and country. In this regard, the activities carried out by state may not be enough alone for today. Besides subjects such as domestic peace and social unrests, the success of how the internal integrity of the society and the continuity of the state can be kept against exogenous mobility, around the cross-border area in particular, and strengthening the legitimacy ties between the state and society will strengthen the state’s hand in internal and external security, especially in both military and diplomatic issues. During such a period of time as the nature of the state is being questioned, besides developing essential and inevitable policies in the frame of substantial concepts such as “expectation management,” discussing the contribution of different segments of the society, academics, NGOs and think-tanks, and providing an intellectual consciousness and communication platform are as important as the result. Beyond philosophical discussions, the unpleasant experiences of nations that came to realize late the industrial revolution or the invention of firearms would come into question for the state cannot manage the fact of the “changing nature of the state.” While the basic instruments of competition between East and West, which will shape the century, appear to be micro-nationalism, integration, and unpredictability; and countries unable to comply with the change in the nature of the state are hosting the initial painful experiences of these instruments.

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In this regard, awareness about the changing nature of the state itself is half of the related process.

22.4 Building Civilization, Power, and Justice Although Western civilization has challenged all other civilizations with the claim of being the most advanced civilization as a result of the modernization activities that started in the West in the last few centuries, other civilizations have endured and even started to make their presence felt more with the increased effects of globalization. The main feature of Western civilization, in terms of perception of existence, is that it considers nature and humanity as two separate poles of existence, and that it turns the human-nature relationship into a dominance relationship. Therefore, a complete differentiation and thus understanding of struggle become widespread between subject and object. In the final analysis, “civilized” humanity has been thrown into a struggle that reaches the degree of madness in all patterns of production and consumption and in social formations. The perception of existence of the Anatolian-centered understanding of civilization is embodied in Yunus Emre’s saying, “I have tolerated the created ones for the Creator’s sake” and Sheik Edebali’s saying “Keep humans alive for the state to live.” A perception of civilization based on these propositions has the potential to form a starting point in solving many issues ranging from crimes against humanity to environmental degradation in today’s world. Today, where relations between state and society are evaluated in terms of economic interest, and where ethics and moral values have lost their importance, the need to revive the perception of “existence, humanity, and justice” in the understanding of civilization embodied in Anatolia is being felt more and more deeply day by day. Thus, the secret of living together with “others” will be re-understood, and the barriers for each segment in a society for living free and safely and at peace and in easy circumstances will have been removed. Just like China, Turkey has a unique and extremely important position in the process of dynamic globalization and interaction between civilizations. The Anatolian geography, which has a central geography at the most convenient point of the continents of Africa, Asia, and Europe, is on the interaction reservoir of intercivilizations, where humanity’s ancient accumulation is embodied and has left its mark in the most colorful and lasting way. It has possessed a special accumulation with its extensive modernization experience. In this sense, Turkey is among the leading countries directly reflecting the tensions of North–South and experiencing them in the most comprehensive way even in the meaning of East–West, tradition-modernity, and economics-politics. Turkey and China have a special place among the rare countries which have the ability to culturally internalize the ancient wisdom of the East with the tradition of rational thought of the West, and the economic productivity of the North with the search for global justice of the South, and to carry them to the stage of history. It is

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necessary to develop different methods and strategies in order to be able to properly understand, interpret, and direct this dynamic transformation process. In today’s consumption age, where people break away from history and move away from future concerns, in other words, where the relations of time and space become problematic, resources are rapidly depleting. In case it is not given an end to consumption frenzy, the prediction that the fossil fuels synthesized and stored by natural ways in millions and perhaps billions of years will be depleted in only one or a few centuries are the most obvious evidence of this. While environmental crises are experienced together with modernity, the proposition “humanity dominates nature” has turned into a contradiction, which destroys existential security for the sake of reaching freedom. This approach introduced as one of the basic criteria of being modern has paved the way for environmental disasters threatening universal existence by considering nature as an inexhaustible resource to be exploited and irresponsibly dominated. The parameters of competition in interpersonal relations are basically about who will dominate which elements of nature. Similarly, the definition of “humanity” has acquired new dimensions in terms of existential security and freedom at the present time, where developments in genetic science and cloning activities increased, and where the use of chemical and radioactive substances became widespread, and where environmental problems started to increasingly become more complicated. Besides, the uncontrolled use of modern technology brings with it many environmental problems that are irreparable. Unless a critical and healthy change can be realized in consumption patterns, it is understood that we will not be able to leave a habitable world to the future generations. In addition, present consumption patterns cause social status to be determined by consumption power, and this causes the basic values of civilization to be meaningless and leads to social disintegration. The solution of such problems will be only possible by bringing an adequately deep and qualified understanding of civilization to the new generations. The cores of such an understanding exist in the Asian civilization’s accumulation. The problems arising from technological developments, and the problems of industrialization and urbanization, and the energy, water, and environmental problems should be seriously handled and re-evaluated in relation to the protection and maintenance of civil values, and appropriate policies should be developed in this regard. The approaches in the fields of urban planning, water security, energy security, and environmental security, etc., should be re-evaluated with such a perspective. The problems being tried to explain here are both the cause and the result of the search for a capitalist economic growth. That is to say that unless necessary measures are taken, current problems will convolutely grow and soon become more complicated in a short period of time. Health and climate problems are acquiring more worrisome dimensions each passing day due to imbalanced population movements. And the solution of all these problems necessitates a civilization-based deep solution. As a result of the intense interaction between technological developments and today’s consumption culture, people’s feelings of dissatisfaction get deeper, and

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individuals, who have boundless ambition, start to be interested in mafia and terrorist structures with the dream of making a fast buck and consuming more. The development of concepts such as cyber terror and cyber security is a result of the increase of international mafia organizations and activities at an unprecedented level within the context of money, human, and drug trafficking, etc., and of the consideration of over-ambitious people as such that all kinds of ways to reach their goals are permissible, and of the fact that this situation gains prevalence among large masses. Offering a substantial solution to this problem with technical internal, external, and international security measures is impossible, and putting long-term civilization projects into practice is an inevitable requirement in this context. The rise of Asian countries, with China being in the first place, has shaken the competitive power of Western countries, and this necessitated the revision of social security policies in these countries. At this point, strengthening civil social networks that decrease the burden of state and functionalizing unique civilizational institutions as foundations are necessary. Today, countries face several challenges. Micro-nationalist tendencies are the foremost among them. The external powers, which want to widen their sphere of influence in some countries or regions, resort to using the micro-tendencies in these places by transforming them into nationalist movements. Unfortunately, the policies implemented by most countries cause the erosion of legitimacy, and this creates a centrifugal impact on the micro-nationalist movements. In the recent period, some countries are developing new syntheses, such as “social democracy” or “liberal economy, communist management” among the common liberal/capitalist and communist/socialist state models. Also, the disturbances arising in the face of this negative lookout in the world pave the way for the development and increasing prevalence of “illegitimate” formations on the other end. The fact that nation states are helpless against the current problems causes the proliferation of domestic or international non-state actors. The movements in African countries, such as Mali and Somalia, are the most obvious evidence of this. The measurements taken in the international arena are not sufficient for the solution of these kinds of problems. As a matter of fact, the tendencies and images of the parties wanting to solve the problem may even make the solution more impossible. The solution of these kinds of problems consistently may be possible by means of humanistic approaches making the most of the history and civilizational accumulations of the parties. Insisting on shaping today’s cities only with the central and mechanical policies of a modern state causes problems, which are impossible to solve in the long-term and in many areas, such as economic, social, and architectural areas, with social security and general security being in the first place. At this point, there is a need for approaches that will make cities more habitable by bringing humanitarian and ethical values into the forefront. A civilization whose cities could not be made habitable and prosperous cannot be expected to gain acceptance at a global level and to make a significant contribution to the world order newly being formed.

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When looking in terms of the factors time and location, spiritual locations, and social institutions, like foundations, have great importance within the context of the emergence, expansion, formation, and survival of civilizations. Plus, the important persons and opinion leaders who left a mark in history have also great importance in this regard. The moralities, such as reliance, good neighborhood relations, and patience, etc., arising within the framework of a civilization’s understanding of existence turn into protective castles of that civilization within time, and state-society relations play a determining role. Therefore, it is necessary to introduce the persons, values, and locations that make the civilization a civilization, and to keep them alive, and to protect them. It is necessary to activate think tanks and NGOs as a complementary power in a more active way, and to strengthen the state image, and to make the state-society relations healthier, and to strengthen the legitimacy of the state in the face of society. In the final analysis, it is the meaning of our life to work for having countries that are branded for their public administration, companies, cities, and social and cultural texture on the basis of power and justice, with the continuous innovation produced by the dynamics of strong critical thinking, and which are leaders in human development, and where people all over the world can say “I want to live in this country.”

Chapter 23

The Domestic and International Features of the Current Multipolar Trend Ali Shah

The return of multi-polarity constitutes the major ongoing contemporary transformation in the international system. It has influenced almost every important sphere of human activity. It is inevitably compelling a change in international relations and domestic relations within nations. Whether this change will make the world more peaceful and secure or less stable and more volatile will depend upon how individual nations react to this transformation. Associated with this change in the distribution of capabilities in the inter-state system are the positive and negative forces of globalization that are impacting domestic, regional, and global politics. The positive forces are characterized by the tendency for cooperation. The negative forces are marked by the tendency for increased competition and conflict. Countries that have welcomed the multipolar trend are also the countries that are promoting cooperation amongst nations. Countries that oppose this trend or find it disturbing are promoting competition and conflict in major domains of the world system. In the current historical conjuncture, these competition-driven states are those that have traditionally occupied long-standing positions of advantage in the Westphalian system. It is ironic to note that these countries that now look askance at globalization once were champions of globalization themselves not long ago. The reason for their current negative behavior is the change in their relative position of privilege. The current multipolar trend differs in terms of the direction of the systemic cultural diffusion from the old multipolar Eurasian system that prevailed from the mid-eighteenth century till the outbreak of the First World War in 1914. The direction of social and cultural diffusion in the older multipolar system was primarily eastward. Cultural diffusion in the present multipolar trend is increasingly headed westward. A. Shah (B) NUST Institute of Policy Studies, National University of Sciences and Technology, Islamabad, Pakistan e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_23

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The Belt and Road Initiative (BRI) represents the major initial stage of this diffusion. As the westward direction becomes more established with the passage of time, newer forms of diffusion are likely to emerge. The states driving this westward diffusion as well as the states supporting this movement are the key cooperation-driven states in the world system. It is well-known that the historical experience of eastward diffusion was checkered. While it led to tremendous material progress, it also produced massively unequal distribution of the fruits of this progress mainly due to its preference for the strategies of domination and zero-sum power politics. The co-occurrence of growth and power politics had the effect of making the latter respectable because it was seen as a necessary condition of growth. This form of agonistic inter-state politics has been concomitant with competitive domestic politics in the states that have dominated the eastward diffusion. For these states, competition among nations is seen as a natural externalization of the conflict among domestic social groups, and the struggle among domestic interest groups is seen as a natural internalization of the friction found between states. Constant iteration of competition based on the continual adherence to a closed world-view that has been in turn informed by the notion of universal conflict has created the path-dependence of contemporary power politics. This poses a particular problem for cooperation-driven states, because fashioning win–win strategies to escape the trap of aggression and conflict means that the competition-driven states are going to discourage and resist such efforts. This means practicing altruism will be difficult in the international system for some time to come, even though it is a potent form of obviating conflict. While it may be possible for two states that have shunned competition in favor of cooperation to promote win–win outcomes and even take altruistic action in their mutual interaction, it would be challenging for cooperation-driven states to create such outcomes with regard to competition-driven states because of the latter’s intransigence. The inability of conflict-driven states to outgrow their Hobbesian heritage is one of the key factors contributing to the persistence of power politics and conflict.1 The regression now being caused in the international system appearing specifically in the form of different types of conflicts and increased instability in major regions of Eurasia is mainly due to the resistance of such states against the westward diffusion under the new multi-polarity. Stability and peace in the international system, therefore, depend largely upon how competition-driven and cooperation-driven states order their mutual relations and their domestic relations in future. The vision for the new type of international

1

Competition-driven states also cooperate amongst each other but their mutual cooperation is propelled mainly for the purpose of maintaining competitive international relations. Therefore, this form of cooperation does not qualify them as cooperation-driven states. On the other hand, the fact that cooperation-driven states may find themselves in competitive situations with respect to competition-driven states does not make them competition-driven, because they are responders not initiators of competition in the international system.

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relations put forward by the current generation of Chinese leadership can act as a reliable guide for cooperation-driven states in this dual ordering.2 In so far as the organization of the domestic relations of states is concerned, at least four broad types of domestic orders can be identified in the contemporary international system. Each order is distinguished by the sphere that plays the leading or directive part in it.3 In the first type, the laissez-faire or market-led domestic order, the market provides the motive force for development, with the overall subordination of the state and the society to the market. This order first emerged in Great Britain, and then became established in the countries of North America and Western Europe. In the second order, the state-led domestic order, the state provides the directive and developmental impulse to market and society. This order exists in varying forms in countries like China, Japan, Russia, South Korea, Singapore, and Turkey. In the third order, a society-led domestic order, the associational realm of society plays a key role in the development of the state and the market. This order can be seen at work broadly in those countries of South America like Bolivia and Venezuela where social movements succeeded not long ago in controlling national governments and providing political leadership. In the fourth type, non-directed domestic order, none of the three spheres succeeds in assuming a decisively leading role. This order can be found in many Sub-Saharan countries. These domestic orders become relevant for cooperation and competition in international politics once we observe that the actions of most nations with free-market domestic orders paradoxically promote competition and those of most nations with state-led domestic orders promote cooperation in international relations. Countries with society-led and non-directed domestic orders favor competition and cooperation in international relations, depending upon the nature of their relations with free-market nations or state-led nations. There are certainly exceptions in each category, but these exceptions do not belie the general tendency that distinguishes one domestic order from others. Cooperation-driven states will succeed in building the new type of international relations as envisaged by the Chinese leadership if they can develop long-term partnerships with the majority of countries that have free-market domestic orders as 2

Ministry of the Foreign Affairs of the People’s Republic of China, “Building a New Type of International Relations Featuring Win–Win Cooperation—China’s Answer to the Question “Where Are the International Relations of the 21st Century Heading” By Wang Yi Minister of Foreign Affairs People’s Republic of China,” July 1, 2016, accessed September 30, 2019, https://www.fmprc.gov. cn/mfa_eng/wjb_663304/wjbz_663308/2461_663310/t1376908.shtml. 3 This is not to say that a significant amount of diversity from country to country does not exist within these orders. This broad generalization does not mean that historically within any country leading spheres have not changed. This categorization also does not mean that other spheres cease to be relevant or important when one sphere plays a directive role. For instance, the market in state-led domestic order can be very developed just as the state in the market-led domestic order can be very strong. China is the leading example of a country in which the state has played a leading role in developing highly successful market-led reforms and promoting extensive social development. The United States is the leading example of a free-market country in which the state is exceptionally strong.

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well as attract an increasing number of countries with society-led and non-directed domestic orders to take analogous positions on key questions like global trade, interdependence, poverty alleviation, the reform of the international system, and the eradication of conflict. What predisposes cooperation-driven countries to play this role is the ability of their state-led domestic orders to foster conditions necessary for balanced domestic development in which economy and society are not overshadowed by the directive domain of the state. The challenge of maintaining this domestic balance gives such states the experience and exposure required for meeting the demands of global peace. These types are also important in so far as addressing the asymmetry of power distribution in international politics is concerned. Structural realism or neorealism, the dominant theoretical strand of power politics, is based on the one-sided assertion that “differences” between states “are of capability, not of function.”4 This assertion ignores that differences in capabilities eventually lead to functional differentiation among states through the assignation of core, peripheral, and semi-peripheral functions to various states in the world system. What this means is that each state “duplicates the activities of other states,”5 as pointed out by neorealism, but at the same time each state performs different functions in the world system depending on whether it is situated in the core, periphery or the semi-periphery of the system. This functional differentiation serves to maintain the difference of power among states. When we see that the domestic orders of most underdeveloped countries are either society-led or non-directed, those of most advanced countries are market-led, and those of most countries which have developed rapidly out of the periphery and have either become or are on their way to becoming core countries, are state-led, we understand better the strategies and mechanisms required for promoting win–win international development. Cooperation-driven countries cannot build the new type of international relations so long as difference in capabilities perpetuates functional differentiation among states. China, as the leading cooperation-driven country in the world, is helping reduce power asymmetries and promote a more inclusive world through using its superior capabilities to assist countries with lesser capabilities, but it is going to be a long-term global process. The process of collective learning by deciding to give up zero-sum politics may induce competition-driven states to become cooperationdriven peacefully during this secular trend, but there are no solid guarantees that this conversion will pan out. One key determinant of this process will be the quality of leadership in different countries. Leadership has always been a key factor in domestic and international politics, but it has become ever more crucial with the increase in the linkages between political, social, economic, and cultural domains caused by the sophistication of information and communication technologies (ICTs), on the one hand, and the proliferation of new forms in these domains, on the other. This means inter-state or intra-state political 4 Kenneth N. Waltz, Theory of International Politics, Reading, MA: Addison-Wesley Publishing Company, 1979: 96. 5 Ibid.

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competition or cooperation now influences both the domestic economies of states as well as their mutual economic relations more rapidly and more extensively than was the case, say, fifty years ago. Or the ramifications of a social movement in one country can affect not only the political culture of that country, but can also influence populations in other countries. If the opportunities for cooperation have multiplied, then so have the risks of competition. The risk intensity and the potential for opportunity utilization depend upon the caliber of national and global leaders. It is interesting to see that the levels of leadership competence and proficiency differ across the four types of domestic orders. High levels of individual intelligence do not automatically translate into high levels of leadership competency. The moral dimension of human action plays a critical role in the cultivation of advanced leadership skills. This dimension allows prudent and confident utilization of technical and technological means for problem resolution. Deep understanding of this dimension enables leaders to limit the spatial extent and temporal duration of the negative forces of competition, as it allows them to increase the extent and duration of the forces of cooperation. This is the key ingredient of successful social change management. A society whose leaders cannot combine instrumental skills and moral awareness are left vulnerable to different kinds of shocks. Such leaders fail to understand the state, society, and the market as complex adaptive systems. The result of this failure is misidentification of the causes and the effects of events leading to flawed policyand decision-making. The fundamental contradiction of such policies and decisions is that that the steps taken to tackle problems or make improvements in one apparatus of the state or sector of the economy create further problems in other parts of the state and the economy.6 If left unaddressed, this problem–solution-problem dialectic spirals out of control to become self-generating. This logic of problem proliferation lies at the root of many contemporary crises across many parts of the world. If this process is not reversed, it can make reform extremely difficult and technically unfeasible, even if it is politically feasible, especially in countries with societyled and non-directed domestic orders. In the contemporary world, with the exception of the national leadership of state-led domestic orders, the leaders of other types of domestic orders has in general dealt rather ineffectually with domestic and global problems. In so far as certain leading countries with advanced market-led domestic orders are concerned, sub-optimal leadership responses may be a result of the dominance of “inverted totalitarianism” which “represents the political coming of age of corporate power and political demobilization of the citizenry (original italics)” in these domestic orders.7 In market-led societies, reform may be technically feasible but politically unfeasible due to this condition. The international system will become increasingly unstable if the social change management skills of the leadership of advanced countries begin to deplete. 6

Genrich Altshuller, And Suddenly the Inventor Appeared: TRIZ, The Theory of Inventive Problem Solving, trans. Lev Shulyak, Worcester, MA: Technical Innovation Center, 1996: 15. 7 Sheldon S. Wolin, Democracy Incorporated: Managed Democracy and the Specter of Inverted Totalitarianism, Princeton, NJ: Princeton University Press, 2008.

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This shows that leadership skills may exist independently of the level of development of countries. It also shows that the behavior of leaders is linked to the nature of the sociopolitical systems or domestic orders in which they are embedded. A sociopolitical system rewarding conflict will nurture skills required for the promotion of conflict. A domestic order prioritizing cooperation will incentivize a different set of skills. Leadership also minimizes or maximizes the prospects of peace or conflict by the manner in which it shapes and manages the expectations of domestic and international actors. Chinese leadership has demonstrated advanced skills in terms of centering domestic and global perceptions and behaviors on the values of harmony, peace, stability, and prosperity. This has served to strengthen the rules-based international order. China has also been exceptional in externalizing the benefits of its domestic development. Developmental cost internalization is another area of expertise of the Chinese leadership. The greater the extent to which states can internalize the cost of development, the greater will be the likelihood of stability in the international system. Rank disregard for internalizing developmental costs was one of the key causes of conflict during the previous era of multi-polarity which caused its disintegration. This disregard still persists in important parts of the world but there is now a greater awareness of its implications. This lack of attention is the result of a leadership culture informed by the shared knowledge of the fear of dispossession underlying an overweening sense of entitlement. This shared knowledge engenders aggressiveness and insecurity in individual and collective behaviors. Though the tradition of win–win domestic and global cooperation led by China is creating a new pool of shared knowledge for collective utilization of common resources through collective practices, the success of this effort will depend upon the extent to which Eurasia can cease to be the arena of zero-sum politics. New forms of cooperative development will need to be promoted in the political, economic, social, and cultural domains for deepening and accelerating the multipolar trend. The aim should be the integration and diversification of these domains based on the concentration of transferable resources and practices in each domain. This will mean, for instance, that a political strategy should at the same time function as an economic and cultural measure and vice versa. It will also require, among other things, diverse and dynamic partnerships between the Islamic world and China which are already being developed through bilateral and multilateral platforms. Based on the principle of mutual non-interference, these partnerships may lead in time to the mitigation of the present factionalization of the Islamic world. This will be good for overall global peace. These partnerships are also extremely important because the only other geographical entity, apart from China, to be classified as a civilizational state by an eminent Chinese thinker is the hypothetically integrated Islamic world coalesced into a modern state.8 As one of

8

Zhang Weiwei, The China Wave: Rise of a Civilizational State, Hackensack, NJ: World Century Publishing Corporation, 2012.

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its strategic goals, this partnership should aim at the rehabilitation of the centurieslong tradition of knowledge production and socio-political construction in the Islamic world, which is sure to provide highly original, viable, productive, and contemporary solutions and strategies for current crises and issues. The Islamic world right now may not be in a position to restore this tradition on its own but a Sino-Muslim partnership can do it. In addition, the fact that most major countries of the Islamic world occupy the significant central and southern portions of the Eurasian landmass and act as important connecting links between its western and eastern extremities will also help two-way diffusion of the efforts for Eurasian stability and peace. These efforts may turn key Eurasian regions like the Middle East and South Asia from constituencies of fear into hubs of harmony. The current period of multi-polarity will be durable, if it is defined by the integration and the consistent application of the principles of gradualism, sequentialism, and comprehensiveness. Gradualism will help increase the adaptive capacity of societies for the establishment of new ways of doing things. Sequentialism will help the alignment of multipolar strategies with the dynamic intrinsic logic of emergent situations. Comprehensiveness will ensure that all domains of human actions are embraced by corrective measures; that such measures cover all aspects of the problems; and, that they deal with the critical aspects of these problems before they address secondary aspects. It is heartening to note that the Chinese approach to domestic politics and international relations is gradualist, sequentialist, and comprehensive as understood here. This approach, however, has to guard against the purposive preservation of anachronistic elements and residual practices of outmoded traditions in domestic and global politics. The insidious quality of these elements and practices is their modern form but their obsolete content. They appear to be essential for free and fair domestic and global development, but since their essence is retrogressive, they inevitably disrupt the process of development. Those who purvey these elements will misconstrue any setback in the efforts to secure cooperation for common prosperity in the international system as an inherent sign of the weakness and unsuitability of collaborative strategies of cooperation-driven states. These elements and practices will also be endlessly packaged into many attractive ideological forms for domestic and global consumption, but their net effect on humanity’s progress will continue to be negative. The best guarantee against such attempts is the intensification of multidimensional cooperation for consolidating the multipolar trend in the world system.

Chapter 24

Geoeconomics and the Contemporary Power Shift in the International System Gyula Attila Csurgai

24.1 Introduction At the end of the Cold War Edward Luttwak, a US expert in strategy, claimed that ideological rivalries between Western liberal and communist collectivist models of societies would be replaced by a worldwide economic rivalry, in which trade, finance, and the mastering of important technologies would often prevail over military power.1 Indeed, relations between states in the post-Cold War period have been shaped by an increased economic competition including “non-market” factors such as intelligence sharing between state agencies and private businesses, successful economic diplomacy, and different techniques to influence and manipulate non-governmental organisations to weaken an economic adversary, among other things. The considerable influence of these non-market factors illustrates the limits of the liberal economic theories that emphasise the dominant role of market forces. Moreover, the 2008 financial crisis, the increasing use of financial means by China to gain geopolitical influences worldwide, the Russian strategy to use energy as an instrument in foreign policy, the use of extraterritorial jurisdiction by the United States as an instrument of economic warfare, the state-capitalist models of economic development, and the growing competition for scarce resources necessitate re-considering the role of the state in economic security. The current international system is characterised by a transition from a US- led Western hegemonic system to a multipolar system. Relative economic and political 1 Edward Luttwak, “From Geopolitics to Geoeconomics: Logic of Conflict, Grammar of Commerce,” The National Interest, No. 20. 1990.

G. A. Csurgai (B) Association of World Learning in Switzerland, Nyon, Switzerland e-mail: [email protected] School for International Training, Geneva program in Multilateral Diplomacy and International Studies, Brattleboro, USA © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_24

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power is shifting away from the Euro-Atlantic zone most notably to Asia, but also to other world regions. This global power shift is due to the rapid rise of China in the first place, and secondly to the strong economic growth of India and Southeast Asia in the last few decades. The Asia–Pacific zone has become the centre of gravity of global geopolitics and geoeconomics. The current global power shift is mainly economic. The US remains the most important military power with the highest military spending in the world, reaching 649 billion US dollars in 2018.2 The US military budget has remained by far the largest in the world, almost as much in 2018 as the next eight largest- spending countries combined. China, the second-largest spender in the world had its military expenditure at a level of $250 billion in 2018.3 The US maintains nearly 800 military bases in more than 70 countries and territories abroad—from giant bases to small radar facilities. Britain, France, and Russia, by contrast, have about 30 foreign bases combined. Concerning the economic aspects of the global power shift, it is important to mention that comparing the GDP on a Purchasing Power Parity (PPP) basis, China has since 2014 already had a bigger economy than the US.4 Projections for 2050 indicate the dominant share of Asian countries of the world economy: China will be the leading economic player, India the second, Indonesia the fourth, and Japan will be in the fifth position. The US will be the third largest economy and none of the European countries will be in the five most important economies on a global scale.5 The Forbes list of the world’s biggest companies in 2018 indicate that the Asia– Pacific region leads with 792 names, 40% of the list.6 Concerning the population factor it is important to mention the relative demographic decline of Europe and the United States. The population of Asia is already about 4 times larger than the combined population of North America and Europe.7 One of the most relevant examples of the global power shift is the Belt and Road Initiative (BRI) launched by China in 2013. The BRI is a monumental project includes a massive infrastructure development to link the Eurasian landmass, as well as Africa, both by land and sea, to China. The BRI will connect, through 6 trade corridors, more than 60 countries representing 69% of the world population and 51% of its GDP.

2

References to data provided by SIPRI (Stockholm International Peace Research Institute), https:// www.sipri.org/media/press-release/2019/world-military-expenditure-grows-18-trillion-2018. 3 https://www.sipri.org/yearbook. 4 https://mgmresearch.com/china-vs-united-states-A-gdp-comparison. 5 https://eu.usatoday.com/story/money/2019/01/11/china-india-gain-us-worlds-top-economy/255 1849002/; https://www.pwc.com/gx/en/world-2050/assets/pwc-world-in-2050-summary-reportfeb-2017.pdf. 6 Data obtained from Forbes Global, “The Forbes Global 2000 is a List of the World’s Largest Corporations as Measured by Revenues, Profits, Assets and Market Value,” https://www.forbes. com/global2000/#7161a2a9335d. 7 United Nations, Department of Economic and Social Affairs, Population Division (2019), World Population Prospects 2019: Data Booklet (ST/ESA/SER.A/424).

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24.2 Geoeconomics Although the concept of geoeconomics appeared at the end the Cold War, thanks mainly to the works of Edward Luttwak, the interrelations between state power, economy, and international trade had been taken into consideration throughout history.8 Controlling trade routes, gaining access to natural resources and conquering markets have been important factors in international economic relations. Venice became gradually a powerful geoeconomic actor from the eleventh century. In spite of its small geographic configuration, this city state became a considerable trading power thanks to its strategy of alliance building combined with an efficient diplomacy, the mastering of advanced technologies in ship building, the use of economic espionage, and a well-developed financial sector, among others. Mercantilism, closely associated with the rise of the nation state in Europe during the period spanning from the 15th to the eighteenth century, advocated state intervention in the economy for the sake of the security of that state. Protectionist trade and monetary policies were used to achieve trade surplus that increased the wealth and power of the state. The German economist, Friedrich List (1789–1846), advocated economic nationalism to support state policies to help industrialization, and in general, to build domestic economic power in order to gain security and independence.9 List considered that the choice between an interventionist and a liberal economic policy is a strategic question dependent on the particular situation of a nation, its economic development, and political power.10 In peace and in war, economic warfare has been applied against countries in order to weaken them economically and thereby reduce their political and military power and/or to influence a given state to change its behaviour. Some instruments of economic warfare are trade embargoes, boycotts, sanctions, tariff discrimination, freezing of capital assets, suspension of aid, prohibition of investment and other capital flows, expropriation, and blocking of access to natural resources. Economic rivalries have often resulted in geopolitical competition and led to different types of conflicts, including military ones. In both the first and second world wars, economic warfare played a key role in weakening military adversaries. For example, before Japan’s attack on Pearl Harbour, a US financial embargo had been implemented against Tokyo, in tandem with an oil embargo, in the immediate aftermath of the Japanese Empire’s invasion of Southern Indochina in July 1941.11 During the Cold War, there were some tensions related to diverging economic interests within the US led western bloc. However, the necessity to maintain the cohesion of the Western alliance vis-à-vis the Soviet bloc resulted in a situation in which these tensions were not supposed to challenge the unity of the West. Economic 8

Ali Laidi, Histoire Mondiale de la Guerre Economique, Perrin, Paris, 2016. Friedrich List, National System of Political Economy, Cosimo Classics, New York, 2013. 10 Eckard Bolsinger, The Foundation of Mercantile Realism Friedrich List and the Theory of International Political Economy, Paper presented at the University of Lincoln, 2004. 11 Edward S. Miller, Bankrupting the Enemy: The U.S. Financial Siege of Japan before Pearl Harbor, Annapolis, MD: United States Naval Institute Press, 2007. 9

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means were considered as an effective instrument to weaken the Communist bloc; this was illustrated by the US strategy in the 1980s that included the following measures among others: (a) The implementation of the Strategic Defence Initiative (SDI) to use ground and space-based systems to protect the United States from attack by strategic nuclear ballistic missiles. The USSR could not cope with this initiative in the context of the logic of the Cold War arms race. (b) In 1983, the US administration approved the National Security Decision Directive 75, which resulted in the implementation of a strict regime of sanctions to limit the foreign policy and military options of the Soviets. (c) The US exercised its influence on Saudi Arabia in 1985 to drastically increase oil production to cause a sharp drop in oil prices that, in turn, impacted considerably Soviet revenues from oil exports that represented a significant part of Soviet hard currency earnings. After the end of the Cold War, the disintegration of the communist bloc resulted in the erosion of the cohesion of the US led western bloc and geoeconomic rivalries have impacted considerably Transatlantic relations. These economic power rivalries have been taking place as well between political and military allies as the evolving nature of relations between the US and continental Europe illustrates. The growing trade tension between the European Union and the United States is illustrated by some of the decisions of the Trump administration to unilaterally impose tariffs on different European products exported to the US. Contemporary economic power rivalries are increasingly characterised by applying methods of non-military warfare: Such as gaining control over strategic sectors of the economy by a foreign power, use of Sovereign Wealth Funds for technology transfer and various information operations and currency wars, etc.12 Moreover, as the US led interventions in Iraq and Afghanistan illustrated, military confrontations and direct control of a given geographic area by armed forces are often perceived as less advantageous than the use of indirect strategies and soft power (two important constituents of geoeconomics) to achieve different strategic objectives of states. The indirect approach to projecting power is demonstrated, for instance, by (1) the growing Chinese influence in different geographic zones ranging from East and Central Asia to Africa and Latin America, and (2) the increasing German influence in Central Europe, a traditional sphere of interest for Germany, thanks to its efficient use of financial, economic, and cultural power. Geoeconomics illustrates the strategic interactions between state agencies and various economic sectors to enhance the power position of states in the contemporary international system. The French scholar Pascal Lorot, director of the French Review Géoéconomie, defines geoeconomics as: the analysis of economic strategies—notably commercial—, decided upon by states in a political setting aiming to protect their own economies or certain well-identified sectors of it, to help their national enterprises acquire technology or to capture certain segments of the world market relative to production or commercialization of a product. The possession or 12 Christian Harbulot, La Machine de Guerre Economique, Economica, Paris, 1992 and La main invisible des puissances, Ellipses, Paris, 2007. Robert D. Blackwill and Jennifer M. Harris, War by Other Means, Geoeconomics and Statecraft, Harvard University Press, Cambridge, Massachusetts, London, England, 2016.

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control of such a share confers to the entity—state or national enterprise—an element of power and international influence and helps to reinforce its economic and social potential.

Going beyond Luttwak’s and Lorot’s interpretations, geoeconomics can be understood as well as the economic power projections driving foreign policy outcomes. Such outcomes are not necessarily related only to the enhancement of economic power position of a given state. Indeed, geoeconomics can refer to the use of economic instruments to promote and defend national interests and achieve specific geopolitical goals. States can implement as well geoeconomic strategies that simultaneously advance multiple interests: geopolitical, strategic, security, economic, and development. The main tools of geoeconomics are the following: trade, investment, finance, aid, technology, information power, and natural resources. The information power of a given state depends to a considerable extent on its capabilities of strategic management of information and has a key role in geoeconomics. The growing impact of information and communication technologies (ICT), and related issues such as big data, artificial intelligence, and cyber security, among others, has resulted in a new context of complexity, as ICTs increase the speed of the impacts of changes that affect political, economic, security, and military matters. One of the most important components of a successful geoeconomic strategy is Economic Intelligence (EI). EI can be defined as the research, analysis, and dissemination of information useful to different actors of a given business entity or of a given state to support geoeconomic strategies of these entities.13 EI can be understood as the transformation of information into knowledge and the knowledge into operational choices.14 To have an efficient geoeconomic disposition, strategic networks of EI should be established between the state level and business. Economic Intelligence is not limited to the research, analysis, and dissemination of information. This intelligence is often applied in offensive and indirect strategies such as disinformation, perception management, lobbying, and destabilisation of an adversary company. Business and state entities therefore have developed both defensive and offensive capacities of EI. Defensive strategies related to information protection are very important as an enterprise can become a potential target of information gathering by competitors to obtain information on financial situation, market penetration strategies, clients, potential clients, and innovation among others.15 The 2015 takeover of the energy division of the French company Alstom by US company General Electric (GE) provides a relevant example on the importance of Economic Intelligence and geoeconomic analysis. Alstom energy division was targeted by a strategy of destabiliation that included, among others things: the arrest and imprisonment of one of its chief executives in the United States, the use of US extraterritorial jurisdiction, lobbying and the imposing of a huge fine, 772 million US 13

Gyula Csurgai, “Geoeoconomic Strategies and Economic Intelligence”, Advances in Geoeconomics, Ed. J. M. Munoz, Routledge, London, New York, 2017. 14 Carlo Jean and Paolo Savona, Intelligence Economica, Rubettino, Soveria Mannelli, 2011, p. 21. 15 Christian Harbulot (Ed.), Manuel d’intelligence économique, Paris, PUF, 2015.

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dollars by the US Department of Justice which aggravated the financial vulnerability of Alstom’s energy divisions.16

24.3 Geoeconomics Questions the Liberal Paradigm The so-called “Democratic Peace” theory is one of the important constituents of the liberal paradigm to study international relations.17 This theory states that the form of domestic politics within democracies makes state mobilization for war difficult and leads to the empirical observation that democracies have not fought a war with each other.18 Although pre-World War One Germany, Great Britain, France, and the United States could not be considered as full-fledged democracies by contemporary standards, these states were more or less based on a parliamentary system and were not dictatorships. These countries had intensive commercial ties with each other. Nonetheless, France, Great Britain, and the United States considered the rapid rise of German economic and military power as a major challenge. It is not the type of political regime but the perceptions of the changing balance of power by Great Britain, France, and the US, due to the increasing international influence of Germany that influenced the transition from peace to war. Thenceforth, World War One broke out, in which Great Britain, France, and the United States had the objective of considerably reducing the power potential of Germany. This objective of the main victorious powers manifested itself as well by the imposition of the humiliating conditions of the Versailles Treaty on Germany after the end of that war. There is a limitation of the democratic peace theory to explain wars between contemporary democracies that are fought by non-military means for geoeconomic supremacy. In fact, geoeconomics can be considered as war by other means than the military ones, as Robert D. Blackwill and Jennfer M. Harris argue.19 At present, democracies occasionally wage economic wars on each other. Similarly, political and military allies can engage in fierce geoeconomic battles to conquer markets, control technologies, and maintain financial and monetary domination, as well as other matters. The nature of “Ally–Adversary” relations is manifested in Transatlantic relations. Although European NATO member states are in a military alliance with the United States, commercial rivalries are part of the EU-US relations, such as the mutual accusations in the World Trade Organization related to subsidies 16

A detailed description of this take-over can be found in the book: Frédéric Pierucci, Le piège américain, Editions JC Lattès, Paris, 2019. 17 Patrick A. Mello, Democratic Peace Theory, in The SAGE Encyclopedia of War: Social Science Perspectives, Paul Joseph (Ed.), Sage Publications, 2017, online: http://dx.doi.org/10.4135/978148 3359878.n188. 18 Colin Elman, “Introduction: History, Theory, and the Democratic Peace,” The International History Review, 23:4, Routledge, 2001, online: http://dx.doi.org/10.1080/07075332.2001.9640946. 19 Robert D. Blackwill, Jennifer M. Harris, War by Other Means, Geoeconomics and Statecarft, Council of Foreign Relations, The Belknap Press of Harvard University Press, Cambridge, Massachusetts, 2016.

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given to Boeing and Airbus. A stronger example is the use of the ECHELON electronic surveillance system, managed by the United States in collaboration with other English-speaking Western countries, and PRISM, a clandestine surveillance program under which the United States National Security Agency (NSA) collects data of Internet and phone communications. The information collected through ECHELON and PRISM and given to economic actors can be used to promote the economic interests of the US,20 illustrating the role of the state apparatus in, ostensibly, intra-firm competition. Cooperation between state agencies and companies runs counter to the tenets of neo-liberalism. The neo-liberal ideology advocates a high degree of deregulation, opening up rapidly the domestic economy to international exchanges and investments, privatization of most sectors of the economy, and limitation of the public sector. The neo-liberal model failed in several countries. One can mention the Argentinian economic depression taking place between 1998 and 2002, or the devastating consequences of the Russian “shock therapy” in the 1990s. Contrary to the rapid liberalization and deregulation of the economy, the East Asian states opted for a gradual opening of their economies combined with a long-term economic development approach in which the state played a strategic role.21 One of the most obvious examples of this approach—also called State Capitalism—is the successful economic development of South Korea which was a rather poor country in the 1960s. However, it became gradually a developed and prosperous state with competitive export-oriented economic sectors by the 1990s.22

24.4 Some Elements of the Chinese Strategic State and Its Approach to Geoeconomics From a geoeconomic perspective, it can be stated that there has been no diminution of the importance of the state, but a transformation of its strategic role in order to adapt to a new power reality of the twenty-first century in which commercial, financial, technological and cultural factors play an increasing role.23 The objective of this “Strategic State” is to create the conditions for establishing a successful geoeconomic disposition that can create synergy between the private and public sectors of the economy and government agencies. The tools used to create a national geoeconomic framework of cooperation include education and training, research and 20

Laris Gaiser, Economic Intelligence and World Governance, Reinventing States for a New World Order, Il Cerchio, Citta di Castello, 2016, pp. 177–186. 21 Ezra F. Vogel, The Four Little Dragons: The Spread of Industrialization in East Asia, Cambridge, MA: Harvard University Press, 1993. 22 Young-Iob Chung, South Korea in the Fast Lane: Economic Development and Capital Formation, Oxford University Press, Oxford, New York, 2007. 23 Hervé Kirsch (Ed.), La France en guerre économique, Plaidoyer pour un Etat stratége, Vuibert, Paris, 2008.

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development, commercial strategy, economic diplomacy, and economic intelligence among others. Grouping together each of these elements into a national geoeconomic disposition may determine the influence of the state in the international system in the twenty-first century and impact considerably its socio-economic development. This process is influenced by cultural, historical, and geopolitical factors, and by a shared perception by various actors of public and private sectors, on the role of geoeconomics to enhance the economic security of the state. In this context, it is important to note the existence of different national approaches to developing and implementing geoeconomic strategies.24 To examine some characteristics of the Chinese approach to geoeconomics, it is important to take into consideration the historical and civilizational elements in a longue durée (long duration) perspective.25 China is the only country in the world with a history of a unified state for over 2000 years, and it is the world’s only continuous civilization lasting over 5000 years. China should be understood more from a civilizational point of view than from a purely political and ideological one. The British author Martin Jacques writes26 : The most fundamental defining features of China today, and which give the Chinese their sense of identity, emanate not from the last century when China has called itself a nation-state but from the previous two millennia when it can be best described as a civilization-state: The relationship between the state and society, a very distinctive notion of the family, ancestral worship, Confucian values, the network of personal relationships that we call guanxi, Chinese food and the traditions that surround it, and, of course, the Chinese language.

The main reason why the Chinese state enjoys legitimacy in the eyes of the Chinese can be found in the relationship between the state and Chinese civilization. The state is seen as the embodiment, guardian, and defender of Chinese civilization. Maintaining the unity, cohesion, and integrity of Chinese civilization–of the civilization-state–is perceived as the highest political priority. Unlike in the West, where the state is viewed with varying degrees of suspicion, even hostility, and is regarded, as a consequence, as an outsider, in China the state is seen as intimate, as part of the family, indeed as the head of the family; interestingly, in this context, the Chinese term for nation-state is “nation- family.”27 The Chinese Professor Zhang Weiwei considers that the Chinese state is characterized by four main factors: a huge population, a large territory, a very long history, and a very rich culture, which have in term shaped all the key features of China’s development model, with all its possible ramifications for the future trajectory of China and beyond.28 The long history of the Chinese civilisation 24

Christian Harbulot, La Machine de Guerre Economique, Economica, Paris, 1992, La Main invisible des puissances, Ellipses, Paris, 2007, Manuel d’intelligence économique, PUF, Paris, 2015. 25 Due to the limited length of this paper there are only few characteristics of the Chinese approach to geoeconomics are mentioned. 26 Martin Jacques, When China Rules the World. The Rise of the Middle Kingdom and the End of the Western World, Penguin books, London, 2009. Chapter on the Civilisation-State, pp.195–203. 27 Ibid. 28 Weiwei Zhang, The China Wave: Rise of a Civilizational State, World Century Publishing Corporation, New Jersey, USA.

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favours the development of long term planning and implementation of long term strategies as it has been illustrated by Chinese economic reforms and the Belt and Road Initiative. China’s economy has doubled every decade since 1979, and its foreign trade every five years since 1978. In 1978, China ranked as the 34th largest trading nation. By 2013, it had reached the top of that list. Its annual economic growth rate has been high, around 10% for several decades since the introduction of economic reforms in 1978 In the last few years its growth rate has steadily decreased to an average of 6%–7%, which can still be considered as relatively high compared to most of the rest of the world. Although these significant growth rates have not benefited all regions of China uniformly, China has managed to lift more than 800 million people out of poverty since the start of its economic reforms.29 According to the 2018 Global Innovation Index, China is in the first position in the world in the category of patents and scientific publications and number of available researchers and second in research and development expenditure.30 The mastering and development of key technologies by Chinese companies and internationalisation of these companies within a relatively short period of time can be noted as well. One example among many others, is the China Railway Rolling Stock Corporation (CRRC) which has within a couple of years become the biggest railway producer in the world manufacturing metro, high speed trains etc., CRRC has 180,000 employees, 46 subsidiaries and their products are sold in 102 countries. The very significant achievements of China in socio-economic development within relatively short historical time—about 40 years since the end of the 1970s when the economic reforms gradually started—indicate that non-Western approaches to development can function well and can be legitimate. Each country has the right to choose its own path of development. The Belt and Road Initiative provides a relevant example of how geoeconomic strategy may impact both economic development and geopolitics. Some of the main strategic benefits of the BRI include bolstering regional stability, improving China’s energy security, developing export markets and re-reorienting trade. The (BRI) also favors the development of China’s inland regions and can subsequently contribute to the enhancement of the geopolitical cohesion of China. The BRI will increase Chinese influence in East Asia, Southeast Asia, Eurasia, the Middle East, Africa, the Artic region, and Latin America. In addition, more than half of the world economy will be taken out of the US dollar-dominated trade and economic relations which can lead to the strengthening of the global role of the Renminbi. Consequently, the BRI may contribute to the emergence of new international financial order. This process could be accelerated in case of a new financial crisis that could start from the US and spread to other regions. The BRI places China in the centre of the Eurasian

29 30

World Bank Overview on China, 2018. https://www.worldbank.org/en/country/china/overview. Global Innovation Index 2018, WIPO (World Intellectual Property Organisation), Geneva.

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Heartland.31 One of the main geopolitical significance of the BRI is to connect the major land powers of Eurasia: China, Russia, and Germany. The collaboration of these three states and the Chinese land and maritime strategies to gain influence over the Rimlands of Eurasia can be considered as the strengthening of Eurasia and the weakening of the US led sea power strategy that seeks to prevent the emergence of peer competitors in Eurasia.32 In case of a potential collaboration of India with the BRI, the gravity of the international system would be significantly altered and an Asian-led globalisation cycle would impact significantly the norms, trade rules and the narratives about global governance.33 The global power shift represented by the gravitation of global power back to Asia from the Euro-Atlantic zone should be perceived in the longue durée (long duration) perspective of historical cycles. As a matter of fact, China and India had been leading the world economy for many centuries.34

24.5 Some Concluding Remarks from a European Perspective The BRI project provides an opportunity for Europe in its necessary geopolitical and geoeconomic repositioning in the context of the twenty-first century global power shift. Europe find itself between the declining Transatlantic zone and the re- emerging Eurasia. Europe is part of Eurasia. The increasing problems between the United Sates and continental Europe, including trade tensions, the use of extraterritorial jurisdiction by the US as a weapon of economic warfare against European companies, the unilateral policies of Washington (such as the American withdrawal from the socalled Iran Nuclear deal), indicate a trend of growing tensions between Europe and the United States. The active participation of Europe in the BRI can balance the relations with the US. Besides, Europe has major interest in the establishment of a new stable financial infrastructure that is not exposed to the excesses of speculative financial capitalism.

31

In this context it is interesting to observe map made by Researcher Hao Xiaoguang and published in September, 2013, with the authorization of National Administration of Surveying, Mapping and Geoinformation of China, http://english.whigg.cas.cn/ns/es/201312/t20131211_114311.html. 32 On the concept of the Rimland on can read the book of the Dutch American geopolitical thinker, Nicholas J. Spykman, America’s Stragegy in World Politics, The United States and the Balance of Power, Harcourt Brace and Co., New York, 1942. 33 Parag Khana, The Future is Asian, Global Order in the 21st Century, Weidenfeld Nicolson, London, 2019. p. 321. 34 Alexandre Lambert, China’s Belt and Road Initiative in a New Era of Geoeconomic Rivalries, Conference Paper, GIGS (Geneva Institute of Geopolitical Studies) Summer Course “Geopolitics” 2019.

Chapter 25

Geopolitical Shifts and Great Power Responsibility Robert de Wijk

American political leaders tend to rely too much on America’s economic and military might, whilst most European politicians are being guided by the normative principles of the Liberal school and neglect the fundamental power-political principles of the Realist school. The result is a poor analysis of international relations, failed thinking on power, inconsistent, short-term thinking, and little self-reflection. This is the product of centuries of global domination in the absence of any real challenges. What this may lead to is indicated by the cases in which Russia and China are playing major roles whose leaders do think and act in line with the power-political principles of the Realist school. This is a problem in a world whose nature is changing fundamentally. This contribution argues that great powers should understand the geopolitical shifts involve risks and that they should avoid misperceptions at all costs. If not, the construction of the community with a shared future of mankind is doomed to fail.

25.1 Self-Images, Value Systems, and Geopolitics What is certain is that emerging countries want to assert themselves. This means that self-image will play an increasingly important role in geopolitics; in other words, in a multipolar world, visions of cultural excellence become more important. Such visions are linked to the rise of nationalism. Nationalism is a powerful weapon for getting a population behind its leaders and adds to the dynamism of a society if the feeling arises that the culture in question is superior to others. A PEW Research study concluded already in 2003 that despite globalization, nationalism remains a R. de Wijk (B) The Hague Centre for Strategic Studies, the Netherlands, Hague, Netherlands e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_25

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powerful ideology. In many countries, people think that their culture is superior to others’,1 and strikingly, this is mainly the feeling in developing countries. Among the developed countries, the United States in particular believes that American culture is superior to other cultures. In the second decade of the twenty-first century, these notions have only become stronger. If people are convinced of the superiority of their own culture, then it is hardly surprising that many people believe that their way of life must be protected from foreign influence. Indeed, a large majority of people agree with this notion in all the countries researched by PEW. This was also true of the countries that play a key role in international relations. Feelings of superiority such as these can be dangerous if, for example, there are feelings of territorial nationalism. The PEW Research study revealed this to be a widespread phenomenon. In Asia, half of all Japanese and 79 percent of inhabitants of the Philippines believed their country to have legitimate territorial claims. More than two-thirds of Russians thought that parts of neighboring countries belonged to Russia. There are no indications that nationalist thinking on cultural superiority and territory has diminished in the years since the PEW Research study was carried out. On the contrary, nationalism has been a major motivating factor for the more assertive foreign policies in Russia, China, Japan, India, and the countries surrounding the South China Sea. It is thus interesting to consider how emerging countries regard the West. Not every country is able to impose its rules of the game and values on the world or expand its sphere of influence. Countries such as the United States, Russia, and China do have such options. They combine power with the idea that they are exceptional cultures with special missions in the world. Due to the rise of multipolarity, the world will therefore increasingly have to deal with the impact of conflicting value systems. In itself, thinking in terms of value systems is nothing new. The ancient Greeks, Romans, and Chinese believed themselves superior to other peoples, and this idea arose in the West during the Enlightenment. Gradually the idea of “universal” values developed, such as humanity, democracy, and social and economic progress. This thinking is deeply rooted in European culture and leads to misunderstandings and misperceptions regarding countries that have different visions. Given the political, economic, and military state of the European Union, non-Western countries see this as less and less of a threat. However, this way of thinking is spurring many nonWestern countries to define themselves in opposition to the West. Alexander Lukin argues that the majority of Russians are unhappy with the fact that the West sees them as backward and reactionary.2 Lukin rightly states that value systems are playing an important role in world politics. What is more, due to their growing power, the major players will increasingly be guided by their value systems. This underlines

1

PEW Research Global Attitudes Project, Chap. 5, Nationalism, Sovereignty and Views of Global Institutions, 3 June 2003, http://www.pewglobal.org/2003/06/03/chapter-5-nationalism-sov ereignty-and-views-of-global-institutions/. 2 Alexander Lukin, “Eurasian Integration and the Clash of Values,” Survival, vol. 56, no. 3, June–July 2014, p. 53.

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the observation made earlier that future conflicts would increasingly occur along geopolitical fault lines. The United States is a typical example of a country whose foreign policy is guided by the idea of being “different,” a phenomenon that is known as exceptionalism. When formulating his foreign policy, George W. Bush harked back to traditional notions of the special nature of America: the American Creed or political testament. Freedom, democracy, individualism, and laissez-faire were the motivating factors behind American political action and also strengthened the foundations of American exceptionalism. Such thinking goes back to America’s roots and reflects an idealistic conception of the country’s origins. Religious motives are not extraneous to this, as shown, for example, by 19th-century views on manifest destiny: the idea that Americans have a mission, that they are morally superior and that they may impose their ideals when necessary. In the nineteenth century, the two volumes of Alexis de Tocqueville’s De la démocratie en Amérique also contributed to the notion that America was “different.”

25.2 “Being Different” and Foreign Policy The American expert in the area of security studies, Robert Tomes, has written that in the United States the debate about exceptionalism has gained new momentum.3 It was one of the main themes of the presidential elections of 2012. The Republican candidate, Mitt Romney, attacked the incumbent President Obama on this point: “we have a president now who thinks America is just another nation. America is an exceptional nation.” But Obama also believes in American exceptionalism, although his version of the idea is different from Romney’s. During the Syria crisis, Obama argued that the United States had functioned as the anchor of global security for seven decades and that the world was a better place as a result.3 In a speech at West Point, the President was clear about the importance of exceptionalism: “I believe in American exceptionalism with every fibre of my being. But what makes us exceptional is not our ability to flout international norms and the rule of law; it is our willingness to affirm them through our actions.”4 Many Americans believe that the United States has a God-given duty. It is known that President George W. Bush was strongly guided by his religious views. It is logical that a president who believes his country to be not just any country, but a superpower with a God-given task, would not want to become subordinate to the decisions of international organizations such as the UN, international law, and treaties. Seen from this perspective, it is understandable that the United States does not wish to hand over its citizens to the International Criminal Court. Moreover, the United States does not 3

“Remarks by the President in Address to the Nation on Syria,” http://www.whitehouse.gov/thepress-office/2013/09/10/remarks-president-address-nation-syria. 4 “Remarks by the President in Address to the Nation on Syria,” http://www.whitehouse.gov/thepress-office/2013/09/10/remarks-president-address-nation-syria.

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desire any interference in its domestic affairs and sees the whole American Continent as its sphere of influence. This goes back to the Monroe Doctrine of 1823, which President Woodrow Wilson used at the beginning of the previous century to carry out interventions in the Dominican Republic (1915–1934) and Haiti (1916–1924). During the Cold War, this doctrine was used to prevent the Soviet Union from giving support to Cuba and other countries in Central America. American exceptionalism was strengthened by the fall of the Soviet Union. US Secretary of State Madeleine Albright (1997–2001) even described the United States as “the indispensable nation.” A number of traditions thus arose in American foreign policy over the centuries: unilateralism and the right to act unilaterally when necessary; an instrumental view of international institutions and international law, which are only accepted if they support the interests of the United States; the right to defend interests in the Western hemisphere; a sense that the country is destined to play a defining role in the world; elements of cultural and political imperialism; the dissemination of concepts supported by the United States, such as democracy and human rights; and the containment or combating of competing ideologies or countries that could challenge the United States. For the most part, emerging countries view this as arrogant and as interference in their domestic affairs. President Trump does not reject the notion of American exceptionalism, but his approach is more isolationist. Trump’s America First policy has led to a trade war with China, the breakdown of the multilateral system and the rejection of both military intervention and strong alliances with likeminded countries. The idea behind it is that the United States should protect its interests and prevent other countries from becoming a challenge. This brings him closer to the Chinese and Russian leadership.

25.3 Chinese and Russian Views Just like the Chinese leadership, the Russian leader, Putin, is clinging on to traditional notions of sovereignty and non-intervention. This view is based on ideas of greatness, but until now, the two countries—unlike the United States—have largely had regional aspirations. Putin’s view of domestic political order is captured in the term “sovereign democracy.” According to this concept, developed by the Kremlin ideologue Vladislav Surkov, Russia is developing its own form of democracy, free from foreign influence and normative pressure. Moreover, President Putin is taking every opportunity to underline the unique and special nature of the Russian people. In order to emphasize patriotic feeling and typical Russian values, he declared 2014 to be the year of culture. His efforts are supported by the Orthodox Church, which has been an important factor in growing nationalism in recent years. Patriarch Kirill I has not only been a patriarch of Putin’s ideas regarding the “Russian world”—a soft-power concept focused on the propagation of Russian culture and the Russian language and mission—but during the Ukraine crisis, Kirill also called on Ukraine to heed the countries’ shared Orthodox Christian values and not to start flirting with

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Western Europe. However, the fear that Ukrainian believers might separate forced him to adopt a more moderate position than Putin’s. Chinese nationalism is rooted in a deep sense of humiliation, mainly at the hands of the West. The country has an aversion to everything that resembles a foreign diktat or foreign influence, as these are seen as harking back to the abovementioned Century of Humiliation. The European Council on Foreign Relations concluded that relations between the European Union and China are based on the old idea that by doing business with Europe, China will liberalize its economy, transform itself into a constitutional state, and become more democratic. This assumption completely fails to take account of China’s economic and political power and the fact that the country has developed in ways that are independent of Western values.5 China’s view of the West is revealed, for example, by the fact that it describes the Korean War as “the war to resist the United States of America.” Moreover, a number of more recent incidents have convinced China that the United States is pursuing an anti-China policy, as explained above. This belief is reinforced by Trump’s trade war. For the time being, it looks as though China, like Russia, will largely develop as a regional power. But China does not lack the feeling of having a mission in the world, either, as shown by the propagation of the Beijing Consensus. The latter is seen as an attractive idea by countries that do not have deep-rooted democratic traditions. An increasing number of countries have adopted elements of it. The Belt and Road Initiative is instrumental to spreading China’s soft power.

25.4 A Fragmented World In the end, what might be the consequences of this combination of new power relations, shifting economic centres, and the new thinking in terms of superiority? One plausible future scenario is that the world fragments along its geopolitical fault lines, and value systems and entities develop further: the European Union, China, Russia with its partners in the Eurasian Union, and the United States, possibly with its NATO allies and partners to various free trade agreements. These developments will result in a more fragmentary political-economic structure in which no single country or region dominates the international order. Ian Bremmer and Nouriel Roubini call this a “G-zero” world.6 The term refers to declining Western power and the development of a fragmented system of new centres of power. Authors such as Moisés Naím believe that there would be no longer be any room for power politics in such a world.7 Naím’s argument is compelling, but it is wishful thinking. Until now, international relations have developed in accordance 5

J. Fox and F. Godement, A Power Audit of EU-China Relations, London: European Council of Foreign Relations, 2009. 6 Vito Racanelli, “Davos: Who or what is G-zero?” Barron’s, 26 January 2011. 7 Moisés Naím, The End of Power: From Boardrooms to Battlefields and Churches to States, Why Being In Charge Isn’t What It Used to Be, New York: Basic Books, 2013.

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with Realist theories, which argue that states are the key actors in international relations and that in the end, if things do not work out, they are guided by power politics, not a supranational authority. They only want to cooperate when they face a common challenge. Following the Realist school, we can conclude that a multipolar world would be less stable than the world that we knew until recently. In a multipolar world, misperceptions are more likely per se. The more players there are, the greater chance there is of making the wrong call. One potentially dangerous aspect is that emerging countries and countries that have much to lose believe—based on the idea of being “different”—that they have right on their side, and therefore become blind to others’ motivations. This can lead to the kinds of misperceptions that have historically resulted in frequent conflicts and crises. As explained above, this phenomenon is strengthened by the observation that feelings of nationalism and superiority or exceptionalism are becoming an ever more important means of uniting citizens behind a more assertive foreign policy. Territorial nationalism, as explained above, is already playing a major role in Russia, China, Japan, and other countries surrounding the South China Sea, such as Vietnam and the Philippines. What is more, geoeconomics is becoming increasingly important, because emerging countries understand that their prosperity and security are linked to having unhindered access to scarce resources. By definition, geopolitical change produces winners and losers. If the process of geopolitical change continues—and it looks as if it will, so long as the Chinese economy does not collapse—then the world will become less Western. Great powers rise and fall; this has been the case throughout history. The United Kingdom’s decline as a superpower had few consequences for the Western world because the United States assumed the helm. But if the Western world as a whole becomes less important, then the consequences could be significant. One of the conclusions of contribution is that a diminished West will no longer be able to shape the world order in line with its own preferences. As a result, the West will be less able to protect its interests. Declining power could therefore result in decreasing prosperity and thereby lead to social and political instability, because free trade and access to supplies of raw materials are not defining factors for the economic growth of emerging countries alone. If free trade and access to raw materials are threatened, then action will be required; military action, if need be. This is also the case for conflicts that threaten the stability of the Western world itself. Moreover, emerging countries’ mercantilist, state-capitalistic policies demand a political and economic response from the West. The relative decline in the West’s power requires both an acceptance of the geopolitical changes that are occurring and a new burst of energy in order to adapt to the new era. The Realist school predicts that at times of great threat, countries become more supportive of greater cooperation. But with the election of President Trump, the conditions for greater cooperation appeared to be unfavorable. Due to the new phase that globalization has entered and the ongoing turbulence in large parts of the world, people feel that they no longer have any control over their

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lives. As a result, peoples are focusing more on their nations, regions, or cities— populist leaders are sensing more opportunities, there is the threat of political fragmentation and polarization, fundamental principles such as democracy and the free market are being questioned, and nationalism is gaining a stronger hold. These factors will further strengthen the process of decline. For this reason, in Foreign Affairs the American thinker Francis Fukuyama recently described the United States as a “land of decay and dysfunction”.8 As an additional reason for this, he cited the judicialization of American society and the growing influence of lobby groups, which are causing citizens to lose their faith in government. Despite this, we can ultimately expect awareness of these global challenges to bring about change, and active policies will be introduced to counter further decline. The reality of international relations forces changes in policy. Historically, this has always been the case, and there is no reason to suppose that things will be any different now.

25.5 Conclusion What implications could this have? Most importantly, especially in the West a change in mind-set is needed. Due to these changes, people may eventually become aware that Western dominance of world politics can no longer be taken for granted, and a change of course is essential in order to be able to respond to the geopolitical changes outlined in this book; what Joseph Nye calls the diffusion of power and the erosion of high politics. Western countries will then have to prioritize pragmatic diplomatic relations with emerging countries, including China and Russia; they will have to take more account of the interests of these countries; and they will have to show greater readiness to find compromises that these countries can also accept. There must also be greater awareness that international relations is becoming less and less about being right, and more about searching for overlapping interests, such as the fight against climate change, international terrorism and the prevention of devastating resource conflicts. If this does not happen, then the world will rapidly become more insecure. A change in mind-set also implies that Western policy becomes less normative, and that political leaders show more restraint regarding interventions with humanitarian objectives. Interventions will then increasingly be limited to protecting overlapping Western interests. Moreover, when undertaking interventions, greater account will be taken of the fact that regime change can lead to a power vacuum, allowing groups to seize power in a country and causing the whole country to sink into chaos, eroding global stability in the process. Every escalation of a conflict that is in itself insignificant between the West, Russia, and China is dangerous, because all of these parties still maintain large arsenals of nuclear weapons. In Europe, experts feared that the threat of the use of nuclear weapons would become more real if Russian-speakers in the Baltic States 8 Francis Fukuyama, “The Sources of Political Disfunctioning,” Foreign Affairs, September– October 2014, p. 11.

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were to rebel, as they had done in Ukraine, and their efforts were openly supported by Russia, or if NATO were to become militarily involved in the conflict in Ukraine. In contrast to the West, Russia has a large number of short- range and mid-range nuclear weapons, which could create the temptation to threaten to use nuclear weapons at an earlier stage. In Asia, a Chinese attack on American air carriers would undoubtedly lead to an American nuclear retaliation. It is certain that that due to the ongoing crises in Ukraine and the South China Sea, the relations between East and West appear to be changing fundamentally. In Europe, the Ukraine crisis appears to have brought an end to the order that was established by the Charter of Paris of 1990. A new division appears to be emerging, in which spheres of influence are once again playing a major role. This development comes at a moment when, due to the changing generations, there are very few Western politicians who understand this geopolitical game and can play it convincingly—just like at the beginning of the Cold War. The American political scientist Robert Legvold has argued that the crises in Ukraine and the South and East China Seas are forcing us to revisit the lessons of the Cold War.9 We should start by realizing that during the Cold War, it was already the case that differences between countries could lead to conflicts with dynamics that could no longer be kept in check. Realizing this means recognizing that transitional phases in international relations are unstable by definition, and that they therefore bring risks. Mitigating those risks is a key requirement for great powers. The lessons of the Cold War that need to be re-applied are simple, but they do require a change in the mind-set outlined above. First, distrust is often the consequence of distorted perceptions of each other’s intentions. Misperceptions can be extremely dangerous and can lead to faulty conclusions. It is thus essential to understand where the other is coming from. Second, it is not the actions of one party, but the process of action-reaction, that leads to crises. The cycle of action-reaction must be avoided by moderating one’s own position and by offering one’s opponent a solution. Third, it is crucial that rather than trying to force one’s opponent to change their ideas—for this will not happen—attempts are made to influence the opponent’s choices. This means that we also need to revisit all the old concepts of coercion or coercive diplomacy. Fourth, mechanisms for managing conflict, such as the OSCE’s confidence-building measures and the NATO-Russian Council, should be taken seriously. The great difference between now and the time of the Cold War is not that there are opposing power blocs with irreconcilable ideological differences, but that spheres of influence and geopolitical fault lines are defining the world order to a major extent and will be responsible for future crises. In the end, however, the great powers need one another in order to tackle the burning issues that could erode the security of the whole world, ranging from the ongoing conflicts in the Middle East to instability on the Korean Peninsula, and from climate change to access to scarce raw materials. If the great powers are able to work together, then crises will still occur in future, but they will develop in a much more controlled fashion.

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Robert Legvolt, “Managing the New Cold War,” Foreign Affairs, July–August 2014, pp. 82–84.

Chapter 26

Confronting the Crises of Global Governance Sohair Abdalsalam Ibraheem Saber

Humanity today faces a growing range of global problems that require urgent attention—from the multiple wars and terrorist attacks fueled by violent extremism, repression by autocratic regimes, and conflicts in Africa, Eastern Europe, the Greater Middle East, and elsewhere, to the growing global dangers posed by climate change, economic shocks rippling through closely coupled economies, and increasingly sophisticated cyber threats. These interconnected issues cannot be dealt with effectively by any one state or group of states; we unavoidably share responsibility for one another’s security. Yet meeting these challenges, which undermine human security, human development, and human rights, also exceeds the operational and political capacities of global governance institutions created in the mid-twentieth century for critical but different purposes. We live in a convergent era. Growing global connectivity, in particular, both enables forces of disorder and opens new opportunities to tackle centuries-old afflictions, such as global poverty, gender discrimination, and the spread of disease. For these and more recent issues like environmental degradation, the 2010–2020 decade has been convergent. Powerful technologies and the intensified movement of people, goods, services, and capital associated with today’s hyperconnected global economy provide new ways to advance the Sustainable Development Goals for 2015–2030 launched previously by world leaders at the United Nations. The UNFCCC conference in Paris offered a critical opportunity to deliver on the agenda for combating climate change. The UN is also rethinking how it does conflict prevention, peacekeeping, and peacebuilding, and there remains contentious debate about how best to promote human rights and the international rule of law. In short, the times ahead have potential to cross a threshold into a new era in global governance and human experience. This Report engages that prospect with the breadth that it deserves. S. A. I. Saber (B) The Hague Institute for Global Justice, the Netherlands, Hague, Netherlands e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_26

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The Hague Institute for Global Justice’s Commission on Global Security, Justice and Governance offers pragmatic reforms using new tools and networks to build better global institutions and a new global ethic, with the aim of focusing policymakers, opinion leaders, and international civil society on the need for more dynamic and creative global solutions to looming global challenges. Responding to new threats and opportunities requires that we overcome the deep-seated divisions driving the present crisis of global governance, which will take time. With the launch of this Report, a concerted effort will begin to promote these and related global governance innovations, looking toward and continuing through the UN’s seventy-fifth anniversary in 2020. The Intersection of justice and security—or just security—is critical to understanding and tackling today’s global governance threats and challenges. Justice, including through the rule of law, is essential to safeguarding human security at the personal and communal level. Conversely, a just society is an illusion without security. Analyzing key global challenges through the prism of just security highlights both acute tensions and potential complementarities to be, in the first case, recognized and in the second, managed or reinforced. It lends fresh insights and greater urgency to tackling often intractable problems across and within borders. The goal of just security is to forge a mutually supportive global system of accountable, fair, and effective governance and sustainable peace. This vision is rooted in long-standing international commitments to human rights, international law, and the critical role of flexible and evolving multilateral institutions, states, and nonstate actors in global governance. Beyond the United Nations and other global institutions, a growing number of regional organizations, including the African Union, the Association of Southeast Asian Nations, the European Union, and the Union of South American Nations, are shaping global trends. Equally important are civil society, the business community, municipalities, and the media, each offering unique perspectives and assets and varying in size and reach. These increasingly global actors can work together in a network approach to governance toward inclusive and innovative solutions to some of the world’s most complex and pressing global issues. Three major challenges and opportunities for global governance are fragile and conflict-affected environments, climate and people, and the hyperconnected global economy. First, in fragile states and regions, large gaps in security, justice, and governance are readily identified but hard to fill. Despite a surge of UN peacekeeping and stability operations begun at the turn of the millennium, coping with state fragility and violent conflict remains as complicated and costly as ever, and billions of US dollars are spent annually in the quest for sustainable peace. Multiple, concurrent, and recurring intrastate conflicts, exploited by international terrorist and criminal organizations, have reversed the declining trends in political violence witnessed since the end of the Cold War. In 2014 alone, the number of refugees increased by 2.1 million to record levels, and the number of persons internally displaced by armed conflict grew by 5.2 million, another unfortunate record. At the same time, the growing roles of women, civil society organizations, and businesses, whose voices are amplified

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through modern communications technologies, offer new opportunities for effective peacebuilding, governance renewal, and transformational justice. Responding to these threats, challenges, and opportunities, the Commission’s recommendations include: . Create next-generation UN conflict mediation and peace operations capacity: build responsive capacity to provide experienced mediators, including a greater proportion of women, for crisis and conflict prevention and peacebuilding; build capacity to deploy civilian, police, and military personnel to meet urgent peacekeeping requirements; build a new cadre of experienced personnel to serve as Heads of Mission and members of mission senior management teams; beyond transitional justice, invest in transformational justice; and coordinate activities closely with and materially support regional actors and local civil society, with particular attention to inclusion of women in peace processes. . Strengthen the Responsibility to Prevent, Protect, and Rebuild: invest in earlywarning capabilities and Responsibility to Protect (R2P) action plans for an approach to atrocities prevention that involves all UN agencies and programs; embed UN mission monitors in all forces participating in R2P implementation; and set concrete, achievable goals for all international actors seeking to prevent, react to, and rebuild after mass atrocities. Second, with each successive report of the Intergovernmental Panel on Climate Change (IPCC), the need to take extraordinary and decisive action addressing the causes and impact of climate change becomes more evident and urgent, as does the need for new, more productive approaches to meeting climate challenges, including greater public–private collaboration. A steady rise in emissions of greenhouse gases globally is heating the atmosphere and the oceans, melting polar and glacial ice, and raising sea levels and ocean acidity to the detriment of sea life and human security alike. The changing climate strikes hardest at those with the least capacity to adapt, other than to move. The IPCC projects the number of climate change refugees at 100 million in 2025 and 150 million in 2050. Humanity’s impact on the global climate is ever clearer, but its response has yet to address the deep injustices created by too little adaptation of support for such vulnerable populations. Mitigating and adapting to climate change globally may well require a new understanding of what constitutes security and justice in the twenty-first century. Responding resolutely yet creatively to this quintessential global governance challenge, the Commission makes the following major recommendations: . Innovate climate governance: facilitate new kinds of engagement between the UNFCCC and other international regimes, subnational authorities, and civil society and business groups; establish an International Carbon Monitoring Entity, a Global Climate Action Clearinghouse, and a Climate Engineering Advisory Board to review all experiments involving atmospheric modification; and define a global goal for climate adaption comparable to the 2 °C atmospheric warming target set for climate change mitigation.

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. Develop a green technology licensing facility within the Green Climate Fund: harness private-sector innovation for climate mitigation and adaptation, especially in support of vulnerable populations in developing countries. Third, economic and technological globalization have created a hyperconnected global economy with significant benefits for many but worsened economic inequalities for others, as well as new threats to global economic stability and to public, corporate, and personal security. The US financial crisis of 2008 and 2009 spread throughout the global financial system, caused bank losses of more than US$4.1 trillion, and drove global unemployment up by thirty million. National and regional economies remain vulnerable to capital flight, billions of US dollars-equivalent are lost annually to illicit financial flows, and connectivity facilitates novel kinds of crime, espionage, and intellectual property and natural resource theft. But three billion people (and climbing) can access the Internet, contributing—along with other means of modern communication—to an explosive growth in global trade. Expanding access to new technologies and participation in the global economy has the potential to lift tens of millions of people out of abject poverty, creating a more secure and just world. In response to these inherent risks and opportunities, the Commission offers the following recommendations: . Establish a G20+ within a new framework for global economic cooperation to avert financial shocks and deliver on the Post-2015 Development Agenda: enhance G20-UN-Bretton Woods institutional coordination to prevent the spread of crossborder financial shocks, promote inclusive economic reform, and foster the equitable growth necessary for achieving the seventeen Sustainable Development Goals. . Develop a global network of cybercrime centers and increase Internet access in the Global South through enhanced capacity-building: bolster the global response to cyberattacks through INTERPOL and national Computer Emergency Response Teams (CERTs); and increase Internet access and cybersecurity in the Global South through multiple initiatives, including the International Telecommunications Union’s Connect 2020 Agenda and the promotion of cyber hygiene. A practical and integrated reform approach, underscoring and closely linking security and justice concerns, enables progress on all three global issues, as well as a better appreciation for key cross-cutting issues such as gender, migration, and anticorruption. When managed effectively, the hyperconnected global economy provides tools that can empower international and local responses to the special needs of fragile and conflict-affected environments. So can new communications technologies and the Big Data revolution help to unleash human creativity and collective action for addressing the climate crisis. At the same time, our small, dense, interconnected world cannot prosper if more than a billion inhabitants fail to cross a basic threshold for a safe, dignified life, or if rising sea levels, extreme drought, powerful floods and storm surges, trafficking gangs, and networks of violent extremists threaten the security, well-being, and survival of millions.

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A coherent set of global governance reforms to better promote just security requires innovating and streamlining global institutions and engaging critical regional organizations, local authorities, the business community, and civil society across generations more effectively. Advancing progress requires a strong grasp of the impediments to previous reform efforts. In particular, these include: (i) a lack of political will to change, particularly among powerful countries or within entrenched bureaucracies; (ii) poor design and advocacy for a specific policy or institutional reform; and (iii) limited skill and effort invested in sustaining a reform program through to completion. By helping mobilize pressure for global (intergovernmental) institutional reforms while serving as resourceful partners for global institutions with fresh perspectives, nonstate, regional, and local actors are an integral part of still nascent network governance. To succeed in the twenty-first century, the United Nations and other global institutions must extend their traditional convening role for Member States to include innovative ways to engage these increasingly influential actors. Seizing the opportunities for improved global governance, though cognizant of the risks and challenges to reform, the Commission makes the following recommendations: . Establish the UN Global Partnership: give a greater voice to underrepresented policy issues, such as women’s rights, migration, and training a modern workforce, through new social compacts and a new hub and online platform whereby the entire UN system can tap into the expertise of civil society and the business community. . Expand UN Security Council membership and nontraditional engagement: create more opportunities for countries, regional organizations, local authorities, and nonstate actors to contribute to peacemaking, peacekeeping, and peacebuilding, while increasing the Council’s representative legitimacy and restraint in the use of the veto. . Establish a UN Peacebuilding Council: transform the Peacebuilding Commission into a Council—similar to the Human Rights Commission’s transformation in 2005—with new coordination authorities, new financial and knowledge resources, and a new focus on prevention, including through “peacebuilding audits.” . Strengthen and more fully use the International Court of Justice: expand acceptance of the World Court’s jurisdiction and make use of its authoritative advisory opinions in innovative ways. . Enhance the working relations between the UN Security Council, International Criminal Court, and UN Human Rights Council: support sustained dialogue, sanctions to enforce judgments and arrest warrants, and leverage the Human Rights Up Front initiative’s system-wide conflict analysis and recommended early actions in response to large-scale human rights abuses. . Launch the UN Parliamentary Network: establish a parliamentary advisory body for the UN General Assembly to raise greater awareness and participation in UN governance, consistent with other networks in place for the World Bank, International Monetary Fund, the World Trade Organization, and regional organizations.

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An effective strategy for reform requires smart coalitions of like-minded states and nonstate actors to mobilize and sustain support for change. The ideas, networks, resources, and leadership skills of all actors with something to contribute need to be assessed, cultivated, and harnessed at the earliest stage of initiatives to reform global governance, including from governments, civil society groups, the business community, regional organizations, and local authorities. Three examples emblematic of these features are the Coalition for the International Criminal Court, the International Campaign to Ban Landmines, and the international effort to adopt R2P as a global norm. Clear interim milestones, backed up by well-honed communications, monitoring, and coordination tools, are also important to success. In particular, the Commission recommends investing in a hybrid approach that taps into the strengths of two major avenues to global governance reform designed to overcome deep-seated divisions in the international community: . reform through parallel tracks acknowledges that different kinds of multilateral reform negotiations will require different negotiating forums and will proceed at different speeds. In doing so, it can facilitate a careful sequencing of reforms based on criteria such as urgency, political feasibility, and cost. . marking the UN’s seventy-fifth anniversary in 2020 with the culmination of a multi-stakeholder and formal multilateral negotiation on global institutional reforms, a World Conference on Global Institutions could serve as a rallying point for smart coalitions and simultaneously generate political momentum for multiple, urgent global reforms. Every effort should be made to engage the voices and ideas of civil society at the most local level, as well as under-represented groups, in the lead-up to the World Conference. When security and justice are recognized as jointly pivotal to global governance, today’s most urgent challenges can be overcome. Just security can inform a practical reform program that innovates our global institutions, laws, policy tools, and relationships. Leaders from all countries, including from powerful states and emerging global actors, have a particular responsibility to ensure that the United Nations and other global institutions continue to inspire, safeguard human rights, and give even the most vulnerable people a reason for hope. Guaranteeing security and justice for all peoples and nations is the practical and moral imperative of our time. Just security is intended to enable humanity not only to survive but to thrive with dignity, offering the basis for a new global ethic and new direction for global governance.

Chapter 27

“Tian Xia”—China’s Concept of International Order Shiu Sin Por

27.1 Introduction President Xi said the world is facing “huge changes, unseen in a hundred Years” (百 年未见的大变局). This is no exaggeration. Indeed, the recent China–US relations crisis, and more so, US president Trump’s unconventional approach to international relations, are a good sign and indicator. Harvard professor Graham Allison has been running around the world scaring people with his “Thucydides’ Trap” while he should have stayed in Washington lobbying his government. Because, according to his own study, it is the declining dominant power who is the most likely one to initiate a war. All of these have revived the study of international relations theory and practice to a scale not seen since the end of WWII. Real-politics, geo-politics, or power-politics, these traditional and dominating theories of international relations are still the norms within the diplomatic and academic circles worldwide. But we are having a hard time using these theories trying to explain what is happening in the world today. It is particularly difficult to fit China’s behavior into a simple geo-political framework. China, as a rising power, is the second largest economy in the world, and is fast becoming the largest. She has inevitably become the focus of this discussion, and as expected, has been repeatedly asked about her views on international relations. Suspicions and doubt about her intentions and ambitions are unavoidable. China is trying hard to explain her positions and so far with limited success. China asserts she is not an imperialist power and has no hegemonic intention. But her expansive “Belt and Road Initiative” invites strong opposition from the US and suspicion from many corners of the world. The South China Sea disputes make her neighbors nervous and the US uptight. How to square China’s expanding

S. S. Por (B) New Paradigm Foundation Co. Ltd, Beijing, China e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_27

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international activities and influence with her assertion of non-hegemonic intention? What is China’s concept of the world and nation-to- nation relations?

27.2 The Building Blocks of China’s Approach to International Relations The contemporary basis of China’s international relation principles can be summed up in five building blocks. They were all creations since the founding of the New Republic in 1949. Some old, created in the early fifties, most of them quite new, created just in the last few years. To my knowledge, these five elements were never grouped together and presented as one comprehensive theory. As China’s approach to international relations is still in its formative stage, these five elements might not be the final blueprint. But they are sufficient to give a full and fundamental picture of China’s concept of the world order. I capped these elements into the ancient Chinese concept of Tian Xia (天下), “everything under heaven,” an old concept with a contemporary substance. These five elements of China’s international relations conception are the followings.

The Nation State (民族国家) The very basis of China’s international relations is the affirmation of the concept of the nation-state. The concept was once new to China and the Chinese. Before the 20th century, China’s conception of itself was very different from the concept of the nation-state developed in the West since the 1600s. Many scholars in the West asserted that China is more a civilization than a modern state. Lucian Pye’s claim saying that China is a civilization “pretending” to be a nation-state is basically wrong. China no doubt is a civilization. This western concept of nation-state, an entity with a clearly defined territory, citizenship and had a legitimate government, was alien to China. These three criteria were imposed upon China. China in the old days had no concept of a well-defined boundary, of a clear concept of citizenship, and no concept of an illegitimate government. (Illegitimate emperor? Yes.) China, since the mid19th century, was forced to deal with a world unknown to her before. After painful lessons, she tried hard to reconciliate her understanding of the world and herself with the reality. China is not “pretending” to be a nation-state. China is “struggling” in the last hundred years to be a nation-state. Not many have been aware that, not until lately, China has a clearly defined land boundary with the exception of that between she and India. As for the sea boundary, they are still in formation. The South China Sea disputes are the living example of this effort in actions.

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China has now fully accepted the modern concept of nation-state. Without a choice, but China is still struggling to construct its modern statehood. One of the reasons is the complication that China is not a uni-ethnic country. China, after great difficulties, consolidated her many ethnic groups into fifty-six officially recognized nationalities. How these nationalities fit into a single huge state is an on-going difficulty. Despite her difficulties on this front, China firmly accepts this modern concept of nation-state as the basis for her nation-to-nation relations. From this, she put forward the Five Principles of Peaceful Co-existence as the very basis of world order.

The Five Principles of Peaceful Co-existence (和平共处五項 原則) These five principles, mutual respect for each other’s sovereignty and territorial integrity, mutual non-aggression, mutual non-interference in each other’s internal affairs, equality and mutual benefit, and peaceful co-existence, were first espoused by Premier Zhou Enlai in 1953 when he met with an Indian delegation. They were put forth in the Bandung Conference in 1955 in Indonesia. These principles were largely reflected in the final communique of the conference and have been the cornerstone of China’s relations with other countries. These five principles are fully consistent with the United Nation Charter. China sees these principles as the foundation of nation-to-nation relations and has adamantly adhered to them ever since. There are many accusations about China interfering in the internal affairs of other countries, though little evidence has been given to support these accusations.

New Model of Major-Country Relations (新形大国关系) President Xi brought forward this concept in a meeting with US president Obama in 2013. The presence of large major countries is a reality in the present world. They play a role of proportional, or disproportional influence in world affairs is also a reality. China aims to develop a special relationship among the major players in world affairs so their leadership and key roles can be coordinated and played to their full effect. This is also intended to manage their differences, reduce conflicts, and foster cooperation in a multi-polar, globalized and diverse world, supplementing the efforts of the United Nations.

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The Belt and Road Initiative (BRI) (“一带一路”倡议) The BRI is no doubt the wake-up call for the West to face the reality of a rising China. The Initiative was widely interpreted by the West as a desperate solution for China to deal with her surplus production capacity. But soon after, they realized that this is not just an attempt to solve China’s domestic problems. The BPI has tremendous geo-political significance. By that time, it could no longer be stopped or contained. The label “Silk Road” has a sense of historical nostalgia and a poetic flavor. It is a master stroke of packaging for the Initiative. But the BRI really has nothing to with geography, a fact that should be obvious now. The BRI is everywhere, not just in Central Asia. It is simply a Chinese effort to forge China’s foreign relations through joint development. The BRI is not a Chinese Marshal Plan. It is basically not an aid program. Projects are done on economic and business-like basis. Aid elements are only occasional and supplementary. It is an export of the Chinese development experience: Infrastructures come first. But that is not what BRI all about. It has five components. They are: 1. 2. 3. 4. 5.

Policy coordination (政策沟通) Facilities connectivity (设施联通) Unimpeded trade (贸易暢通) Financial integration (资金融通) People-to-people bonds (資金融通).

The BRI is a very comprehensive approach to building nation-to-nation relations. Economic development is a focus, but not its sole purpose. So, it is understandable that the initiative draws political concerns from major powers. It is no doubt has diplomatic implication and geo-political effects. In approaching this drive, China laid out her principles in pushing the Initiative. They are: “Be jointly built through consultation to meet the interest of all (共商、 共建、共享)” A better translation would be: Consultation, Joint Effort, and Mutual Benefit. These three principles form the working basis of all the effort under the BRI. Nobody is forced to join in any project. They do so only if it is beneficial to them. So it is for China as well. Policy synchronization, infrastructure connectivity, free flow of trade, financial and capital flow, people-to-people relations, are vastly different from the traditional foreign investment activities of the developed countries in the third world since WWII. Some interpret this as Chinese “imperialism,” but the subject countries do not see it this way. Building nation-to-nation relationships through joint efforts in economic development is at the core of China’s approach to international relations. This would be done on a voluntary, consensus basis to mutual benefit. Combating poverty and striving for economic development is seen by China as a way of helping other countries to get out of difficult political situations. There is not necessarily a definitive relationship between them. But at least it can help. This is an essential difference between China’s approach and the Western approach to nation-to-nation relations.

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China does not pre-judge the nature of the regime she is working with in building nation-to-nation relation, an implementation of her five principles of co-existence. History will tell who is right and who is wrong. I think we already have the answer. Political system imposed from outside hardly ever work successfully.

“The Construction of the Community with a Shared Future for Mankind” (人类命运共同体) The official translation: Community of Shared Interests, Destiny and Responsibility (人类利益共同体、命运共同体和责任共同体) is cumbersome. My suggestion is simply: “The Common Fortune of Humanity.” This is a high-sounding phrase. But it is not as far-fetched as it might sound. The case of global warming is a good illustration of the common welfare and responsibility which no nation or individual can escape. Issues like this call for common effort; without it, the problem is unlikely to get solved. The world is facing many issues of this nature, for examples, refugee and mass migration, disease and epidemics, population explosion. All these require joint efforts and putting new burdens on the world community. International relations can no longer stay at the level of geo-politics and real-politics alone, one nation’s self- interest alone. In summary, China’s Tian Xia view of international relations is built on the basis of modern nation state theory, a theory which may be a little bit outdated but is still relevant and necessary. Together with a vision and purpose for the interest and future of humanity, through joint efforts to improve the economic conditions of everyone, under the driving force and support of major players, this Tian Xia view of the world and nation-to-nation relations is my summation of China’s worldview.

27.3 Why is “Tian Xia” not Something that Can Be Easily Understood by the West? It is not unusual nowadays to have a non-Latin-based word getting into the western vocabulary. Mah-jong is a good example. You cannot just call this Chinese game “western bridge”. Mah-jong is in many ways very different from bridge. The only similarity with bridge is that it is also played by four players around a table. Any variations of geo-politics, real-politics, or power-politics not only cannot reflect the basic substance of the concept of Tian Xia, but it will grossly distort it. China’s conception of international relations is so different and so complex that it is hard, if not impossible, to find or build a word in English or other Latin-based languages that can adequately reflect the essential content of this theory. People can get used to the vocabularies like mah-jong or karaoke. I hope they can get to understand the concept of Tian Xia too.

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27.4 Historical Origin of the Term The literal meaning of Tian Xia is “all under heaven”. “Tian” is sky, or heaven without any religious connotation. “Xia” is underneath. To Chinese, Tian Xia is practically referring to the known-world, to them and at the time. This is equivalent to “everything under the sky” except Tian Xia mainly refers to human beings and human society. Fairbank understood this as the Chinese concept of world order, which is correct and accurate. Levenson’s understanding of Tian Xia as China’s cultural and value system, producing Chinese culturalism, is only the consequential, or complementary factors in the concept of Tian Xia. Whoever used the term, or the concept of Tian Xia, in the past was by definition, self-centred. The known world is limited to their knowledge. But to say Tian Xia is Sino-centric now is ahistorical. “中国,” the middle kingdom, is only a contemporary term, a simplification of the full name 中华人民共和国 (the Peoples’ Republic of China) or 中华民国 (the Republic of China). The historical use of the term 中国 had a very different meaning. To say China has always seen herself as the centre of world is inaccurate. It is definitely not the case in the last one hundred years. Since the founding of the Chinese Republic if not long before, China finally realized and accepted that she is only a country amongst many others. China’s Tian Xia concept is no longer has China as the centre of the world, not politically or culturally. Tian Xia is everyone’s Tian Xia, not just the Chinese. Dr Sun Yat-sen, the founder of the Chinese Republic, may be the first prominent Chinese to espouse this contemporary understanding and meaning of Tian Xia. His famous proclamation: 天 下为公, Tian Xia for (or belongs to) the Public (Everyone), is an accurate presentation of this modern terminology of an ancient Chinese concept to the world. To use this ancient word Tian Xia to crown contemporary China’s concept of world order is to set a premise, a basis for her overall approach. It starts and ends with humanity as a whole, not just one nation state. This is significant as it is a fundamental departure from Western theories of its kind. This is not to deny the existence of nation state. In fact, China strongly defends this basic unit that make up the world community today, despite its imperfection and problems.

27.5 Discussion World Governance My proposed concept of Tian Xia differs from that of Professor Zhao Tingyang of CASS. His Tian Xia concept starts with planet earth. He claimed that there is a general will of humanity. My guess is that he borrowed this from Rousseau. From there, he derived the need for a world government, a universal political system, to maintain world order. To stress humanity has a common interest is fine. But to claim there is a common will is far-fetched and lack any supporting evidence. It can only

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be an ideal, a goal for the future. From there, he tried to realize the common will through a world government. This can only be a dream. Seeing the situation in the United Nation now one would easily agree that the idea of a world government is unrealistic. The UN lately cannot even pay its bills. Its existence is being questioned unlike ever before. China’s view of international relations does not envision a strong and effective world government even though she is a big supporter of the United Nation. Cooperation, whether it is bilateral or multi-lateral efforts, is seen as a more practical and feasible means to resolve problems, as least for the foreseeable future, supplementing what the UN is doing now.

Self Interest What does China’s concept of international relations have to do with her self-interest? Even the concept of Tian Xia starts and ends with the whole of humanity, that does not necessarily mean China is completely selfless in her dealing with world affairs. The fact that Tian Xia starts with the nation state means China regarding the protection of her national interest is a primary concern. This applies to everyone under the Five Principles of Peaceful Co- existence. This does not contradict with the concept of Tian Xia.

Traditional Concept of Sovereignty Under Challenge The Traditional concept of national sovereignty is under challenge constantly in the modern world. The assertion of the so-called universal values, like human rights, liberal democracy, and the rule of law, served as a reason on many occasions for interfering in the internal affairs of other countries. This is a new development since the drafting of the UN Charter which requires the respect of each member state’s sovereignty. China strongly disagrees with this kind of interference. Her Tian Xia concept would not have any effect on this behavior until it is accepted by most nations.

Marxism and Tian Xia China is a Marxist state. Marxist ideology is being reinvigorated and reinforced under President Xi Jinping’s leadership. How can this Tian Xia concept be explained under the Marxist theory of human society is a question yet to be answered. I believe the concept is consistent with Marxist theory if one takes a long view of human society development. While communism is no longer viewed as imminent and inevitable, a common humanity is still a reality, increasing pressing itself onto a globalized

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world. The global village is no longer a slogan but a fact of life. Marxism strives for a common destiny of mankind. To this extent, it is consistent with the concept of Tian Xia. Marxism’s basic concept of class struggle as a driving force of history and social development is not necessarily inconsistent with Tian Xia if one accepts that class struggles can come in many forms, both peaceful and violent. Much work needs to be done in this area.

27.6 Concluding Remarks China’s international relations concept, as presented here, is comprehensive, has continuity, and is in developmental stage. It is different from the Western theories of geo-politics, real-politics, and power-politics, even though they are both nationbased. China’s world view starts with nationhood but always with humanity as a whole in mind. It is an alternative to the western model, but not necessarily a replacement. I understand that people in the West, government officials and scholars in particular, find it hard to accept this non-western approach to nation-to-nation relations. Actions speak louder than words. My suggestion is to look at what China does first, and take their words later. The same rule should also apply to everyone’s behavior in world affairs. In closing, I would like to quote Liang Qichao (梁啟超, 1873–1929), a wellrespected scholar and historian in the late Qing and early Republican periods. He laid out the difference between China’s political philosophy and its Western counterpart quite frankly in his struggle to wrestle with the Western concept of the nation state in his “History of Chinese Political Thought During the early Qin Period”: “European nation states have their roots in the city government and castle township in the Middle Ages. Their political theory emerged from this basis. This type of organization’s underlying principle is the consolidation of forces within to withstand and defy those without, so that hatred for foreigners is the means of arousing patriotic feelings. In their extreme, the nourishment of emotional racial-hatred groups, the bud of nationalism grows into full foliage. The more it develops, the more pronounced the disorders of modern society become. On the other hand, since civilization began, the Chinese people have never considered national government as the highest form of social organization. Their political ethics has always been in terms of all mankind, with world peace (平天下, evening out Tian Xia) as the final goal, and family and nation only as stages in the perfecting of the World Order (Tian Xia). China has contended, moreover, that political activities should never be the prerogative of, or for the benefit of, any one group or section of mankind.”

Chapter 28

A New Paradigm for a Changing World Order Irina Semenenko

In our turbulent times there is a growing awareness of threats to security at all levels of social life, and an evident need to find policy solutions to face old and new challenges. These include not only national security issues which are an integral part of the international political agenda and growing in importance in the twentyfirst century conflict-stricken world, but also security challenges individuals and communities face in everyday life. Responding to social, environmental, cultural, and other related risks that societies encounter has now become the focus of attention of both the academic and the political communities. These latter face challenges to effective governance at the international level; finding, evaluating, and promoting effective responses to such issues is a priority for both experts and politicians. The concept of a community of a shared future for mankind promoted by China is in this sense a valuable and ambitious contribution towards enforcing global governance and international cooperation. It encompasses both national and international development strategies as key dimensions of a strategic positive vision of the future. It can effectively raise awareness of the risks we face and of the possibilities we have or can acquire to respond to such risks. President Xi Jinping brought up this approach when he addressed students and staff at the Moscow State Institute of International Relations (which is my alma mater) in spring 2013. The focus on development in the common interests of peoples and nations sharing a common destiny in a globalizing world is indeed of existential importance. National development models are of course diverse; this diversity rests on political culture traditions, on economic conditions, and on availability of resources, but also, on a creative approach to using material and non-material resources for development. I. Semenenko (B) Russian Academy of Sciences, Moscow, Russia e-mail: [email protected] Primakov National Research Institute of World Economy and International Relations, Russian Academy of Sciences, Moscow, Russia © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_28

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The priorities people of a certain cultural tradition have and the identities they feel it is essential to ascertain in a rapidly changing cultural environment are no less important. The challenge for nations and for politicians who speak on their behalf is to agree over common priorities, to share motivations for the common good and, most importantly, to promote effective mechanisms to reach the set goals. China’s experience in pursuing its own development model while integrating deeply into the international economic and political world order has been an impressive example of such a vision. The consequences that the speed of change has for both community and individual security and well-being are aggravated by the depth of these changes. Social and technological transformations mark the emergence of a “risk society” (to use the powerful term coined by the German sociologist Ulrich Beck). In a rapidly transforming world order, policy responses at the international level often lag behind public demand; this produces uncertainties and stimulates the search for a new development paradigm that can provide answers to new global challenges, including ones that we cannot foresee at the moment. This is vividly evident in the changing discourse on migration and multiculturalism, in state policies, and in relevant political action in the regulation of migration and migrants’ integration in different corners of the world. A substantial part of humanity does not see any place for itself in the existing world order, and exclusion is not only an economic issue. On the individual level this implies a threat to life and a permanent identity crisis. The long-term social contract based on the market economy and the welfare state, guaranteeing individual freedom and tolerance towards people of diverse cultural, ethnic, and religious backgrounds is also facing severe challenges. Neither the market, nor the social policies and welfare institutions at our current disposal in their own right provide a balanced and consistent foundation for long-term development. An important priority here is a balanced identity politics approach. This implies (among other things) taking practical measures to promote positive nonmaterial values and responsible consumption. A key priority is education as a sphere where strategic visions and innovative practices can be swiftly integrated and promoted. It is also important to consider the preferences people of a certain cultural tradition have and the identities they feel it is essential to ascertain in a rapidly changing cultural environment. The local level where policies are implemented and where results are conspicuous for quality of life at the individual and family level is a crucial focus here. We see networks of actors of various backgrounds—from academia to the state, from expert communities to those engaged in the educational process, from local communities to local authorities and businesses—as potential agenda setters for sustainable development. This presumes linking individual, community, and state responsibility to accommodate interests, values, and identities that are motivated by development issues. The formation of a consistent development policy agenda is centered on a positive and inclusive national identity and on social issues. This is important for societies seeking to overcome deep social cleavages. A new development paradigm encompasses a set of value-oriented guidelines that can appeal both to policymakers and to those who benefit from such policies.

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It calls for a turn in the social sciences toward more consideration for ethics, values, identities, and motivations and for a paradigm shift towards responsible development in policy making. This is also relevant because so far irresponsible development has not experienced systemic limitations on the global level. It is evident that global climate change, pollution, and waste disposal have become acute political issues. This agenda is widely discussed today, and sustainable development has acquired strong verbal support from politicians, businesses, international organizations, and NGOs. On the other hand, there is a growing awareness that sustainable development and economic growth can take different paths. So social inclusiveness, positive quality of life dynamics, and a supportive social climate are key sustainability benchmarks. And sustainability goes hand in hand with responsibility for the choice of priorities and for the means of their implementation. One simply cannot exist without the other. In this context there appears to be a fundamental contradiction between the current interests and motivations and the imperatives of plausible and future-oriented answers that some among the actors who are responsible for the international development agenda are ready to take up and promote. These issues were considered in “The World of 2035. Global Outlook” forecast our Institute—the Primakov National Research Institute of World Economy and International Relations, Russian Academy of Sciences—published three years ago. We are now preparing a new global forecast for 2040, and it will be essential in this context to look at the positive contributions of great powers such as Russia and China to promote sustainable future-oriented development policies and to assess their potential. The Russian academic community sees the issues we are discussing today as a key research priority and as a solid basis for expert dialogue and cooperation.

Chapter 29

The Emergence of Modernization in the West and the Question of Its Applicability Elsewhere Shyamon Sapumal Alwis Jayasinghe

29.1 Definition Modernisation is the transformation from a traditional, rural, agrarian society to a secular, urban, industrial society. Industrialisation lies at the bottom of modernisation. However, modernisation involves far more than the economic and technological components of industrialisation. It is a total transformation of society and the individual that occurs as a response to the challenge.

29.2 Quantum Leap in Human Social Evolution Modern society is an industrial society. “If one imagines all of human social evolution chartered on a 12-h clock, then the modern industrial epoch represents the last five minutes, no more.” The social evolution of man occurred in three quantum leaps. The industrial revolution and the modernism that came with it is the third quantum leap. However, in terms of speed and scale this phase is way beyond the other two leaps. The first stage of social evolution was when human beings took to hunting and gathering. This was over half a million years ago when humans lived an unsettled life of roaming from place to place. The next stage, inaccurately referred to as the Neolithic Revolution, took place when these roaming hunters and gatherers turned to a settled life of agriculture and animal husbandry. The development of the plough led to a rise in productivity, and this created a surplus. This released men into

S. S. A. Jayasinghe (B) Ministry of Defense of Sri Lanka, Sri Jayawardenepura, Sri Lanka e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_29

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other specialised areas like artisans, merchants, priests, and bureaucrats. In the 4th millennium BC cities arose and trade and markets began to develop. This state of affairs went on until the seventeenth and eighteenth centuries. During this period the next quantum leap in social evolution took place that brought us to this industrial age and modernism we live in. This first arose in northwestern Europe, particularly in England, the Netherlands, northern France, and northern Germany.

29.3 Intellectual Background The German sociologist/economist Max Weber threw some light in the explanation of why these countries in northwestern Europe became hosts to the rise of the Industrial Age that heralded modernism. Weber had studied the connections between various religious ideas and economic development. His classic work, titled The Protestant Ethic and the Spirit of Capitalism (1904) is considered a landmark study and milestone with regard to this fascinating area on interconnection. Weber argues that northwestern countries gave rise to the Reformation and Protestantism, in contrast to the dominance of Roman Catholicism in the rest of Europe. He explained how the typical Roman Catholic was “other worldly,” and given to a life of contemplation and withdrawal from the material world. The Roman Catholic submitted himself to the priest and the church leaving the rest to God. The focus was on the next existence. In fact, Weber pointed out how even eastern religions like Hinduism and Buddhism had been similarly “other worldly.” On the other hand, Protestantism was a revolt from the Roman Catholic worldview with regard to spirituality. Mankind’s salvation was in his own effort and not by submission to the Church. The work we are assigned to is our divine vocation done before the eyes of God. We are our own priests as we walk with God, via the vocations assigned to us. Protestants, especially Puritans, Weber said, had a strong view about hard work and frugality. The idea was that our success in material pursuits represents a sign that God has blessed us. To the Protestant all work was a religious duty done in the eyes of God and a man’s success is a sign of God’s recognition for hard work. The Protestant work ethic, Weber pointed out, represented the ideal intellectual or world view for the emergence and growth of industry and business and that this is precisely what happened in the northwestern European countries. Max Weber also made the point that such a worldview presupposes a rational and scientific outlook that was helpful in designing for industry and business.

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29.4 Emergence of Industrialization and Its Impact Areas The growing intellectual atmosphere conducive to technological innovation resulted in the Industrial Revolution. Its seat of origin was initially in Great Britain. Work shifted largely to factories where workers were brought together to achieve output by a specialisation process. Work became increasingly done in by machines rather than by hand. Human and animal power was replaced by inanimate sources of energy such as coal and oil. This became the rational way to increase productivity. The division of labour did confine the worker to a small section of the total end product. As Adam Smith pointed out in his famous example of the pin manufacturing factory, this specialisation boosted a production surplus and relieved the worker from the toil of spending all day in the farm. One can best understand the impact when one considers that in agrarian times the family became at once the unit of production, consumption, socialisation, and so on. What happened was that the Industrial Revolution also spread from city factories to the agricultural and animal husbandry sectors where mechanisation was introduced. All this kind of development meant the growth of surplus. This, in turn, assisted in the emergence of hitherto unknown service industries. The emergence of professional tradesmen and bureaucrats took place. Working life became separated from personal life, church from the state. Numerous other far reaching changes occurred. Labour was freed from feudal and customary ties and obligations and the resultant creation of a market in labour. New leaders called entrepreneurs began investing and running business ventures and the business class became more and more dominant with wealth accumulating in their hands. A large proportion of the rural labour force became superfluous. What is called a “sectoral transformation,” took place. Manufacturing attracted a majority of the labor force to the cities. For example, in both the US and the UK, by the end of the twentieth century, a majority of the workforce had been absorbed by the manufacturing and service industries. In preindustrial agrarian societies more than 97% of the adult population were farmers or farm hands. The industrial and modern age also witnessed a vast explosion of the population. Europe’s population doubled during the eighteenth century from about 100 million to about 200 million and doubled again in the nineteenth century to 400 million. In the year 2006 the figure reached 6.5 billion. The major cause for this was the production of innovative medicines and the extension of medical facilities for the management of health. The other demographic change defining modernism was the shift to urban from rural areas and the growth of vast cities and metropolitans. This brought out another prominent feature in modernism and that is the phenomenon of urbanisation. Modern life is decidedly urban life. In agrarian societies 90 per cent or more of the population had been rural.

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The Sociologist Georg Simmel explained how urbanisation had brought forth a new culture since it became a way of life. City life with its overstimulation leads to a bored and blasé attitude, the developments of cults, ephemeral fashion, etc. Simnel noted the superficial paradox that “one nowhere feels as lonely and lost in the metropolitan crowd.” The good side is that cities provide diversity and creativity. Cities attracted the talented youth. Karl Marx derisively referred to “the idiocy of rural life.” Another prominent impact area of modernism is the drastic change in the family system. In agrarian society the family was an autonomous unit where both work and social functions took place. Production has now moved away from the household to the factory. The consequence is that the family is no longer self-sufficient but something that becomes increasingly dependent on external structures and on processes external to itself. The forces of individualisation witnessed elsewhere eventually invaded the family. The extended family idea gives way to the small two-generation nuclear family of parents and dependent children only. Along with its shrinking role the family is now restricted to become one’s sphere of private life. It attends to the needs of children and provides an avenue for the private sexual life of the spouses. While in the agrarian days the individual finds his identity in the family, the growing importance of the working place has now shifted that identity to the position one is at work. One’s occupational role of clerk, machinist, artisan, or medicine man now takes on the role of identity definition.

29.5 Secularisation, Church and State Separation, and Rationalisation A dominant cultural impact of modernisation witnessed in the lives of men and women today is the spread of secularisation. Marx made an important point with regard to modernisation’s secular appeal. He referred to “the disenchantment of the world.” He meant that the underlying worldview encouraged by the modernisation phenomenon, which science, technology and industrialisation had given birth to, was a growing tendency to reject the world view of the preindustrial age. This development was rooted in the rise of the Reformation and Renaissance in Europe. We have considered the causative role of the reformation and rise of Protestantism in the emergence of the Industrial Revolution. The role of the Renaissance in developing the scientific and rational worldview had been considerable. That was also specific to Europe. During preindustrial days, the average man depended on supernatural forces to minimise harm to him and to bring prosperity. The events occurring around him were largely attributed to gods and deities and religion played such a dominant role. On the other hand, the new world of industrialisation and modernity was based on assumptions of the free operation of natural forces that alone caused natural calamities. Modernisation is turning the old world of dependence on divine forces

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on its head. The new world is focused on man himself and his responsibility for whatever happens. The galloping success of technology, medical science, etc. seems to have given man a sense of his own power and control in dealing with the world and other human beings. On the other hand, one is cautioned not to overemphasise secularisation’s universal applicability as even in the modernised societies religion still plays a part in the lives of men and women. The dominant tendency is, however, clearly toward secularisation. The increasing division of the role of the church and of the state is another aspect of secularisation. In most countries the respective functions are no longer mingled, and the job of ruling and governance is being left to the lay leaders known as politicians. The fact is clear that religious beliefs are losing their central hold in the lives of men of modern times. Religious institutions are increasingly left for ceremonial situations. On the other hand. the revival of religious cults has been largely a reaction to the inevitable that is unfolding before our eyes.

29.6 Rationalisation and Bureaucracy Secularization, in turn, is simply a reflection of a broader cultural process that we refer to as rationalization. It is a consequence of the scientific worldview that underlies modernism. Max Weber has pointed out how rationalisation has affected many crucial areas in society that is outside the direct scope of science. Weber, more than any other scholar, has worked on the phenomenon of the rise of bureaucracy in the area of modern governance. ‘Bureaucracy’ refers to the impersonal operation of rationalised institutions and practices, rules and regularisation that are established to run organisations of human activity. In the functioning of bureaucracy Weber sees “the highest development of the rational principle.” Personal considerations like kinship interests and family interests are replaced by the detached considerations of issues like productivity, discipline, and order.

29.7 Impact of the American and French Revolutions As the initial locale of industrialization and modernization, we have considered above the causal factors of the Reformation and the rise of Protestantism in northwestern Europe. Another source-influencer that helped create the context for modernism over there were the American and French revolutions in the eighteenth century. These explosive events established the political character of modern society. After these revolutions it so happened that no government could lay claim to legitimacy unless it is based in some manner on “the will of the people.” The French aristocrat and scholar Alexis de Tocqueville spelt this out very well in his works, The Ancient Regime and the Revolution (1856) and Democracy in America (1835–1840).

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This new social value of democracy became so powerful that even dictators like Napoleon III in France and Adolf Hitler in Germany sought legitimacy of their rule by paying lip service to these slogans. The latter referred to their regimes as based on the will of the people. Today, the broad democratic value has been regarded by ruling elites at least as the distant professed goal. In the case of the American Revolution, another was added to the political manifestation of modernism and this was the principle of self-determination. National self-determination became one of the most powerful slogans of the liberal and radical ideologies that shaped the modern states of the nineteenth and twentieth centuries.

29.8 Questions of Applicability to Non-Western Countries It is clear that industrialism has been the key to modernisation; industrialism and modernism go together. We have discussed the phenomenon of modernisation as far at its original Western setting has been. It is interesting to move on to the development of modernisation in the non-Western countries and cultures. On the face of it, it can be argued that some of the political catalysts of industrialisation and modernising that were present in northwestern Europe did not occur in the non-Western world. The reference here is to the Reformation, the Renaissance, and the political explosions of the American and French Revolutions. Then, there are issues relating to cultural differences. In most non-Western countries the feudal social values stemming from the preindustrial agrarian era are persistent and influential. Hence, industrialisation and the modernising process, it is argued, are likely to be less organic in the non-Western context. The key point to consider here is that, although external, ideologies can catch on like an infection to “different” host countries depending on their practical appeal. The secular and scientific world-view spelt out by the Renaissance fits practical realities and make sense. Similarly, the obvious material benefits of productivity that industrialisation appeals to people anywhere and everywhere in the world. Industrialisation contains a strong internal process dynamic that makes it unstoppable in any country. With the global spread of industrialisation and rising productivity it is impossible for any country to step aside and isolate itself. That would be national suicide. “Different” societies and cultures develop their own responses to the challenges of industrialisation the industrialisation and modernising process by simply adapting their own differences to meet the new system that has become a necessity. This is precisely what took place in Japan, one of industrialisation’s first nonWestern success stories. Japan was the first to lead and it demonstrated that there are many routes to modernisation. In the mid-nineteenth century Japan was a poor nation that was humiliated by the powerful West. However, with the initial assistance of the Marshall Plan Japan was quick to take the challenge to industrialise. The country did that so well that it soon rose up to be equal to some of the strongest Western Powers. Today, Japan is one the world’s high income and most affluent countries. Alongside

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industrialisation Japan evinces the non-economic and cultural changes witnessed in the West. Following the Russian Revolution in 1917, many developing countries in Asia, Africa, and Latin. America also sought to industrialise according to centrally drawn up economic plans. Even in India which had a liberalised history one political party (The Indian National Congress) did guide the process of industrialisation via centrally drawn-up economic plans. Central planning was later observed to be facing obstacles in these countries and most of them are today encouraging private investment and entrepreneurial plans.

29.9 Conclusion: China’s Example Initially following the Russian model China, too, began with a great deal of central planning. Under Deng Xiaoping (1978) a great deal was achieved. Deng Xiaoping emphasised that China has to follow its own path to modernisation and he was not overly attracted by foreign advisors. This guidance line is simply a reflection of the truth that there are many ways to industrialisation. Since Deng Xiaoping, China has been doing it all its own way. The country has since incorporated the energy of private entrepreneurship and market economy. Ye Win, a native economist in China has written an interesting piece of research about China’s exceptional success in industrialisation. The piece is titled, “China’s Rapid Rise: From Backward Agrarian Society to Industrial Powerhouse in Just 35 Years” (Regional Economist, April 2016). According to Ye Win, China’s real leap started merely 35 years ago although four previous attempts had been made before that beginning with the Qing dynasty. He describes this latest leap as “perhaps one of the most important economic and geopolitical phenomena since the original Industrial Revolution 250 years ago.” The country is so vast and has still a long way to go in the process of industrialisation and modernisation. What this country has achieved thus far is truly remarkable, says Ye Win. Thus far, however, the social and cultural consequence of the modernisation process which have been identified in the Western system is being, in its basic terms, reflected in all non-Western lands. The routes taken may be different, but the end results are, fundamentally, similar, though very localised in style.

Part III

Community with a Shared Future for Mankind

Chapter 30

Two Great Projects in the Framework of the Concept of the Community with a Shared Future for Mankind Rexhep Meidani

Dear colleagues and friends, Some months ago, Yuval Noah Harari, after publishing two major works, Sapiens (explored the past) and Homo Deus (explored the future), has explored and presented his last ideas on the present in a new book titled “21 Lessons for the twenty-first century.” For the author, “Humankind is losing faith in the liberal story that dominated global politics in recent decades, exactly when the merger of biotech and infotech confronts us with biggest challenges humankind has never encountered.” For him, among the most important questions are: How can we protect ourselves from nuclear war, ecological cataclysm, and technological disruptions? What can we do about the poverty, the different imbalances, threat of terrorism, poverty, or the epidemic of fake news? How to maintain our collective and individual focus in the face of constant and disorienting change? Are we still capable of understanding the world we have created? In my view, a powerful response to these challenges is found through the concept of “a community with a shared future for mankind,” or a “community of common destiny,” developed and advocated strongly in the last years by President Xi Jinping. Very special was his analysis on January 18, 2017, in Geneva, at the United Nations Office. There, he delivered a keynote speech titled “Work Together to Build a Community of Shared Future for Mankind,” where he elaborated further the model’s concept, based on equality, mutual benefits, and win–win results. In his interpretation, President Xi, while he was upholding globalization, injected new ideas for international relations in the twenty-first century, different to the main thesis of the President Donald Trump’s doctrine: “America First,” based on national economic protectionism. Above all, Trump’s concept, orientated in opposite direction, has astounded

R. Meidani (B) Tirana, Albania e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_30

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the entire world. Differently, President Xi’s proposals, in the process of globalization, reflect the main interests of human society, particularly the fact that the human race is confronted today with a growing number of global issues such as climate change, terrorism, cyber security and major contagious diseases. For them, there are no borders, and they need to be addressed through international cooperation. And for that, China is playing a proactive and constructive role through different initiatives. Two of them are the “17 + 1”-initiative and Belt and Road. In Geneva, President Xi, in his speech, considering that in “World Economic Forum Annual Meeting, in Davos, many speakers pointed out in their speeches that today’s world is full of uncertainties,” stressed that “we need to get clear about a fundamental issue: Where did we come from? Where are we now? And where are we going?” For him, “mankind is in an era of major development as well as profound transformation and change…, in an era of numerous challenges and increasing risks.” As a consequence, the proposed model for current and future global change is a “call of our time,” and through it we must “achieve shared and win–win development.” In another place he mentioned: “All countries and international judicial institutions should ensure equal and uniform application of international law and reject double standards and the practice of applying international law in a selective way, thus ensuring genuine equality and justice in the world… To achieve this goal, the international community should promote partnership, security, growth, inter-civilization exchanges, and the building of a sound ecosystem”. In this very important speech, delivered in Geneva, President Xi, in fact, analyzed largely the concept, giving some ideas in upholding peace and stability and boosting common development. Among them, very crucial, for him, were: 1. to stay committed to building a world of lasting peace through dialogue and consultation, improving the mechanisms and means in resolving disputes, reducing tension, and putting an end to wars and conflicts. Also, major powers should respect each other’s core interests and build a new model of relations featuring non-conflict, non-confrontation, mutual respect, and win–win cooperation. They should treat smaller countries as equals instead of imposing their will on them. 2. to build a world of common security for all through joint efforts, because no country in the world can enjoy absolute security, particularly in today’s world where the terrorism is the common enemy of mankind and for that, fighting terrorism, enhancing coordination, and building a global united front against it is the shared responsibility of all countries. 3. to build a world of common prosperity through win–win cooperation, supporting an open, transparent, inclusive, and nondiscriminatory multilateral trading regime and building an open world economy. Trade protectionism and self-isolation will benefit no one. 4. to build an open and inclusive world through exchanges and mutual learning, in which the diversity of human civilizations not only defines our world, but it is also an engine driving the advance of them. Human civilizations are different only in identity and location.

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5. to make our world clean and beautiful by pursuing green and low- carbon development, maintaining harmony between man and nature and pursuing sustainable development. For the Chinese President, supporting strongly these important pillars, China remains unchanged in its commitment, particularly: (1) to uphold world peace; (2) to pursue common development, based on a win–win strategy of opening-up; (3) to foster partnerships, pursuing a policy of peace, friendship and cooperation on the basis of the Five Principles of Peaceful Coexistence; and (4) to develop further multilateralism as an effective way to preserve peace and promote development. As we see, the main scope is to build a new framework of international relations and to promote and improve global governance, instead of a nation- state oriented behavior, boosting the common interests of mankind. Said differently, it is becoming urgent the building of a harmonious world of enduring peace and common prosperity working together for a common destiny, for a more equitable and balanced global development partnership, in sharing rights and shouldering obligations. As it clear today, in the face of the complicated situation of the world economy and global problems, no country could take good care of itself alone, no country can address alone the main challenges facing mankind. Above all, a retreat into self-isolation will be a death of the humankind. For a new governance of the world, instead of the Cold War and the hard power politics, we need a harmonious cooperation and the smart power politics. Particularly, it is necessary to build a global human unity in favoring the cultural diversity in front of human cultural homogenization, the multilateral trade instead of protectionism and isolationism, the win–win cooperation, the macro policy coordination, and healthy international relations, respecting the specificities among countries, civilizations, cultures, and religions and their flourish and grow in harmony. As it is clear from what was said above, the concept of “Building a Community of Shared Future for Mankind” is based on a thorough and profound analysis of the situation of the world today and its future outlook. In many aspects, we are approaching to a crucial point of major development, transformation, and adjustment. For that, it is essential to find ways in solving the two major global issues: What kind of world to build? How to build it? Above all, to establish a new theoretical breakthrough and a new norm for international relations, a new approach to countries relations, developing state- to-state relations through partnership and cooperation, and setting up a stronger network of global partnership. It calls also for a new type of international relations founded entirely on win–win cooperation, on mutual benefit common development. In this sense, the concept of a community with a shared future for mankind, as a supreme ideal for human society is suitable for all countries, regions, nations, and civilizations. On the other side, the establishment of a community of shared future for mankind could be achieved through practical and concrete actions and joint efforts of people all around the world, and more in developing different initiatives and new global platforms for international cooperation.

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In the frame of the idea of Building a Community of Shared Future for Mankind, China, during these last years, among others, has launched to two important initiatives: . The first one is the “16 + 1” platform, created in 2012. Through this initiative, China is strengthening the cooperation with 16 Central and Eastern European (CEE) countries (11 EU member states and five Balkan countries). Actually, also, Greece is another country included in that platform, named now as a “17 + 1.” Another state, ready to participate in it, could be also Kosovo, which, based on the Berlin initiative, was among Western Balkans countries, adopting the EU standards. . The second one is Belt and Road Initiative, which has a big number of participating countries that have either shown strong interest or are already engaged. In fact, it is not a simple geopolitics, but a very important economic framework of cooperation for all countries interested on it. The aim of Belt and Road is not to reinvent the wheel, but more to complement the development strategies of countries involved. With the Belt and Road Initiative and its reach into the wider world as the core of China’s global engagement, the 17 European countries have now a better idea on the mechanism “17 + 1,” because both are linked very closely to each other. In the “17 + 1” initiative, these 17 states are competitors with one another and they are offering a growing market of over hundred million consumers near the doorstep of the “old” Europe. Also, in my view, this “17 + 1” initiative is a new engine for EuropeChina Cooperation, a concrete kind of smart power strategy, in stimulating different contacts, developing mutual trade and investments, strengthening connectivity and cooperation on culture, science and technology. Apart from a policy forum or a general framework for all 28 states, named the EU-China Connectivity Platform, that aims to create synergies between EU policies/projects, each EU member could pursue its own bilateral policies towards China. Unfortunately, both initiatives were greeted with suspicion by the EU and its bureaucracy, including the question of rivalry. But different concerns raised from the bureaucracy of Brussels, in some cases also from the politics, are without sense, creating a kind of confusion between normal economic and trade cooperation on one side and the legal and political principles forming political consensus on main affairs among EU member states on the other side. In a globalized world, any fruitful economic cooperation of a European country with China doesn’t reduce the role of the EU policy in this country. Also, any pretention that China is a threat to the European unit, that Chinese initiatives could undermine consensus within the EU, are entirely wrong and against the main principle of multilateralism and the free economic and liberal trade. In my optics, the “17 + 1” initiative is a bridge to Europe in both geographical and metaphorical senses. Cooperation between China and CEE, particularly on developing the region’s infrastructure, will both enable physical connectivity and promote economic integration between China and Europe. In this sense, the “17 + 1” initiative is becoming a new engine for cooperation EU-China, particularly in the key areas of energy technology, industrial projects, agriculture, and transportation.

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Regarding the EU’s perspective toward China’s Belt and Road Initiative (BRI), there is no unified and clear EU position, at least not yet. It doesn’t mean that EU has no further strategic interests in Asia, the world’s most populous and economically largest continent. This has to do with more urgent problems for the next future of EU, mainly Brexit, the concerns over populism, the migration crisis, the Catalonian crisis, etc. However, at the individual EU member state level, a large number of European members have already embraced the initiative and have commenced cooperation, especially in the framework of the mechanism “17 + 1.” Much more important, is the BRI or the New Silk Road. This initiative is a multifaceted, multinational one. It is establishing a network of enhanced overland and maritime economic corridors extending between China and Europe, better integrating a region that consists of over 65 countries and 60% of the population, 75% of the energy resources, and 70% of GDP in the world. In this sense, China’s “One Belt, One Road” project aims to make central Asia better connected to the world, and, at the same time, it is one of the instruments to further opening up China’s economy. In November 2017, Chinese President Xi, one year before the 40th anniversary of Deng Xiaoping’s platform on reform and opening-up, declared: “We should continue to foster an open economy that benefits all. Openness brings progress, while self-seclusion leaves one behind. China will not slow its steps in opening up itself.” In this process of Chinese opening up, also Albania is trying to find its right place, profiting from both initiatives, and considering the positive cooperation and friendship of both countries, since the beginning. In fact, the Albania-China relations date back to the period after the Second War, when Albania was one of the first countries to establish diplomatic ties with the People’s Republic of China and giving its contribution in China’s regaining its seat at the UN as the PRC in the early 1970s. Remembering that, in the year of celebrating the 70th anniversary of the People’s Republic of China (PRC), I would like to express my deep esteem, my high respect and admiration for what China has accomplished during these decades! Considering the number 70, which traditionally in China is an auspicious number, and the fact that a person who reaches 70 is evaluated “rare and precious” (guxi 古稀), I would like to emphasize again that the entire growth of China is especially “rare and precious”. In the new situation, the possibilities for both countries, Albania and China, are higher. Albania itself is strategically positioned at a crossroad between east and west, with the major port of Durres linked to the Balkan hinterlands and the rest of Europe by rail. The economy is showing signs of improvement. Albania, after financial crises, grew nearly 3.5% the last year. The country’s credit rating is still subprime, but it was upgraded by Standard and Poor’s to B+ . Albania’s GDP per capita has risen three-fold over the last decade. In the last years, there has been increasing interest from Chinese companies to invest in Albania and replacing the traditional Western investing partners. According to statistics from Chinese Ministry of Commerce, the bilateral trade volume reached 636 million U.S. dollars in 2016, up 13.9 percent year on year. Currently, China is Albania’s major trade partner and main investment source. The trade volume between Albania and China has grown steadily in recent years and China is now the second partner related to trade exchanges, accounting for around 8% of exports and surpassing old-time partners Greece and Turkey. Chinese

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companies, whether public or private, have shown interest in strategic sectors of Albania. The number of Chinese enterprises present in Albania is around 150, according to National Registration Center data. Also, over 90 Chinese companies have visited Albania to seek for investment opportunities, trade partners, projects, or other opportunities of cooperation with Albania during last year. Above all, some new Chinese investments in Albania are penetrating in some very important sectors. Thus, China’s Geo-Jade Petroleum, a traded oil company, bought controlling rights in two Albanian oil fields then controlled by Canada-based Banker’s Petroleum for nearly $442.3 million. Months ago, two other Chinese groups announced that they were buying Tirana International Airport in a concession deal. This move is consistent with China’s strategy of buying stakes in major transportation hubs along the Mediterranean. These investments, the Tirana International Airport and the country’s largest oil producer, turned China into a strategic investor in Albania. China and Albania agreed to enhance cooperation in areas of infrastructure, production capacity, tourism, and agriculture under the framework of Belt and Road Initiative and the “17 + 1” mechanism. Major Chinese companies had expressed interest in signing long-term contracts with Albanian companies operating in the field of chromium extraction, since they seem to be the biggest buyer of this mineral. Albania offered a range of public–private investment opportunities in stable and growing sectors such as energy and mining, transport, electronic communications infrastructure, urban waste, tourism, agriculture and fisheries, and economic zones. However, some projects in Albania and Balkan countries, lived under different geopolitical umbrellas, are moving slowly. Also, in the Balkans, on one side, the EU and the United States are trying to keep control, and, on the other side, Turkey and Russia are back or trying to be back, using the different antagonisms there. In the case of China there is no antagonism, new or ancient ones. On the contrary! What is needed now is the velocity, an accelerated cooperation based on the Belt and Road Initiative and the “17 + 1” mechanism, and I believe, in both initiatives the reserves are very high, particularly in the Balkans regarding the “17 + 1” strategy. Thank you for your attention!

Chapter 31

Sino Shift and Path to Influence Under the New International Economic Order: How Should China Pave the Way for a Community of Shared Future? Oh Seok Hyun

I would like to express my deepest appreciation to His Excellency of the State Council Office and President of the Chinese Academy of Social Sciences for allowing me to join this prestigious International Forum. It is not only honorable, but also very exciting to be with His Excellency and most knowledgeable and insightful participants. Today, I would like to talk about the global economy, challenges faced by developing economies, and policy directions for inspiring sustainable and inclusive growth, international policy coordination, and role of China in the global community.

31.1 Global Economic Outlook Twelve years after the broadest and deepest post-war recession, the world seems to be growing at a slower pace than expected. The return to stable and synchronized global recovery seems to be illusory. Policy makers around the world still face enormous difficulties in restoring robust and balanced global growth. The world economy has been held back by several major headwinds: persistent macroeconomic uncertainties and volatility; low commodity prices and declining trade flows; rising volatility in capital flows; stagnant investment and diminishing productivity growth; and a continued deterioration of income distribution. In developed economies, real investment and productivity growth have remained weak since the global financial crisis, despite inexpensive and readily available finance. While developing economies, and China in particular, have been the locomotive of global growth since the financial crisis, the pivot of global growth is starting O. S. Hyun (B) Minister of Economy and Finance, Sejong City, Republic of Korea e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_31

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to shift towards developed economies, specifically the United States. Developing economies are now facing a “new reality” that is significantly slowing the pace of economic convergence with the rich world. Growth rates are rather slow, and cyclical and structural forces have undermined the traditional growth paradigm. Amid waning global growth momentum and limited policy space to combat downturns, the balance of risks to the outlook remains on the downside. A further escalation of trade tensions and the associated increases in policy uncertainty could further weaken growth. The potential remains for sharp deterioration in market sentiment. Global risks of a somewhat slower-moving nature with serious implications for the medium- and long-term outlook include the pervasive effects of climate change and a decline in trust with regard to establishment institutions and political parties. The accompanying polarization of views and growing appeal of extreme policy platforms imperil the medium-term outlook by making it difficult to implement structural reforms for boosting potential output growth and strengthening resilience, including against climate-related risks.

31.2 National Priority for Achieving Sustainable and Inclusive Growth Although there are no one-size-fits-all policies, there are general principles in addressing shared challenges. To overcome such challenges and achieve inclusive and sustainable growth, let me first make something clear—although they are not expected to do it alone, developing countries are in the best position to drive their own development. Getting the basics right is a prerequisite. This means implementing sound macroeconomic policies—including containing inflation, boom-bust cycles, and public debt. Healthy fiscal positions and adequate international reserves prepare countries for adverse shocks over which they have little or no control. And strong institutions promote confidence and predictability to support policy implementation and private investment. With these basics in place, countries must also take additional steps to support development. Indeed, the private sector is an essential partner for development. Developing the financial sector—for example, by protecting creditor rights—can expand access to basic financial services for individuals and small enterprises. Carefully designed tax and trade regimes can help attract foreign investment, with vital development payoffs. Beyond these measures, developing economies must also go the extra mile with policies to spread the benefits of growth to all segments of the population and contain environmental damage. Delivering effective public services, getting more women into the workforce, establishing social protection systems, and getting carbon pricing right are important ways to accomplish these goals.

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Productivity growth has also slowed down in developing economies, which underscores the need for improving infrastructure and investing in human capital. Productivity is not everything, but in the long run, it is almost everything. This would require governments to pursue comprehensive structural reforms to improve corporate governance, the business environment and competitiveness. In addition, decent work, job security and employment benefits can also contribute to boosting productivity growth in developing countries. Sustained and sustainable improvement in labor productivity would allow many developing countries to create more decent jobs, increase the labor share of income, and reduce income inequality both within and between countries. Structural reforms can help raise an economy’s long-run prospects. Productivity stagnates when it is difficult to start new firms or expand healthy ones, or when labor cannot easily be shifted from moribund sectors to more efficient ones. Stimulus is no panacea and cannot replace urgently needed reforms.

31.3 International Policy Coordination for Achieving Inclusive and Sustainable Growth I know that what I have described is a tough task to developing countries. But it is the role of the international community to support these efforts by fostering an enabling environment and coordinating action on challenges that transcend borders. Cooperation cannot be optional for international partners; it is a responsibility, an obligation. We must also consider how much the world has changed over the past 15 years. The global economy has become increasingly interconnected through technology, trade, and finance, leading to larger spillovers across borders and greater interdependence among countries. Since the end of the Second World War, a broad consensus in support of global economic integration as a force for peace and prosperity has been a pillar of the international order. Global living standards have risen faster than at any point in history. Globalization has also promoted convergence of per capita incomes throughout a significant portion of the developing world. Globalization is currently under political siege, with populists from both the left and the right. The recent U.K. Brexit vote and U.S. trade wars stand out, but there are examples in many other countries. Since the global financial crisis of 2007–08, trade growth is slowing and international financial flows are stuttering. Are we seeing the demise of globalization? I do not think so. Globalization is not reversing; it is changing. Everyone knows globalization is in trouble. Yet trends in economics and technology will continue to drive ever increasing interconnectedness. This creates unprecedented challenges for global governance. In this context, the downside risks need to be well-managed so that the upside benefits prevail.

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Across all economies, the imperative is to take actions that boost potential output growth, improve inclusiveness, and strengthen resilience. At the multilateral level, the main priority is for countries to resolve trade disagreements cooperatively, without raising distortionary barriers that would further destabilize a slowing global economy. In this context, international policy coordination is critically important. Policy coordination, however, has become increasingly difficult against the backdrop of ever greater complexity in the financial market, persistent and growing disconnect between finance and the real economy, and the chronic misalignment and incentive incompatibility of various policy objectives pursued by different stakeholders at both the national and international levels. From looking at the past, considering the present, and contemplating the future, I see three guiding principles for the international policy coordination including partnership, commitment, and flexibility. Achieving our development goals will require comprehensive partnership to implement the right policies and provide the needed resources. This means advanced, emerging market, and developing economies working together—and with the private sector and civil society—nationally and internationally. Every partner needs to demonstrate strong commitment to sustainable development. In other words, political will can provide the spark, but it must be long-lived to sustain the flame. Development efforts must be approached flexibly where possible. Policies must be tailored to the unique circumstances of individual countries, with room to adapt as the world evolves. In this respect, I would like to emphasize a harmonious, cohesive, and dynamic global community. China is playing an increasingly important role in the international community with the aim to search for the new model of global economic growth and to meet the challenges of the time in the context of global transformation. In this respect, the world supports China’s vision of “A Community of Shared Future for Mankind” and “The New-Type International Relationship.” But we are continually looking for ways to do more. I would like to suggest for enhancing the support for developing economies across three broad fronts including finance, policy, and capacity building: Finance: We will increase our focus on helping the poorest and most fragile countries to better handle external shocks. Policy: To advance the inclusion of more people in the growth process, we will deepen our efforts to bring issues such as inequality, gender, and access to finance into our country-level advice. Leveraging the expertise of partner institutions will be of key importance. Capacity building: We will boost our capacity building and advice to countries as they invest in their economic potential. Technical assistance will focus on the areas that need it most, including support for revenue mobilization and infrastructure investment. We will also intensify our efforts in the countries that need it most— fragile and conflict-affected states.

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We live in an interdependent world of spillovers and spillbacks, where multiple forces—financial, economic, social, political, and environmental—reverberate across the globe. The results can be transformative, but they can also be devastating. The key to getting it right is international cooperation and creating “a community of shared future for mankind” should be critically important. In this sense, besides the need for responsible policymaking to promote inclusive and sustainable growth, we should include five priority areas where commitment to international cooperation can support development: trade, digital revolution, aid, debt, and environment. Trade: Developing economies would benefit from a global trading system that is rules based, nondiscriminatory, and equitable. Digital revolution: While the digital revolution is global, the pace of adaptation and policy reactions will—rightly or wrongly—be largely national or regional, reflecting different economic structures and social preferences. Where preferences diverge, international cooperation will likely involve swapping experiences of which policies work best. Aid: Advanced economies with the budget capacity to do so should make it a priority to increase aid, which is essential for many of the world’s poorest countries. Debt: Strengthening the framework for handling sovereign debt crises to promote efficient and timely resolution is a priority. Environment: Global warming can only be addressed effectively through international partnerships, including containing CO2 emissions and assisting low-income countries as they adapt to climate change.

31.4 Role of China in the Global Community Over the past 70 years, China has explored a unique development path and governance model. Some amazing things have been going on in China. With rapid industrialization, this country of 1.3 billion people has enjoyed an unprecedented high growth, turning China into an important engine of world economic growth. China’s living standards have risen considerably, and as many as 600 million Chinese have shaken off the shackles of poverty. Because of China’s industrialization, urbanization, and globalization, the rest of the world is naturally paying considerable attention to how China grapples with the challenges of ensuring sustained and steady development and of dealing with issues such as unemployment, an expanding income gap, the imbalance between investment and consumption, environmental protection, and social security. The Chinese government has drawn up a development policy— taking into account the experiences of other countries and adapting lessons from elsewhere to its own circumstances—and is constantly tracking how development across the country is proceeding. China has made remarkable achievements in promoting sustained economic growth, improving people’s livelihood, and promoting all-round social development.

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For China, the top economic policy priority is promoting sustainable development—which is the key to improving people’s livelihood and achieving broad-based prosperity. In implementing economic policy, China has adopted an orderly and gradual approach with an emphasis on stability, reflecting the fact that it takes time to improve the infrastructure of the market-based system, including the legal and regulatory framework, banking system, accounting standards, professional expertise, and institutional capacity. China has been growing extremely rapidly for a long time, but an important shift in this growth pattern occurred at the time of the global financial crisis. These shifts reflect the rebalancing of China’s economy away from a growth model that relied heavily on investment and exports toward a new model that relies more on innovation as a source of growth and on consumption as a source of demand. Compared with “business as usual,” rebalancing is likely to lead to a slowdown in growth in the immediate future as wasteful investment is reined in. But over time it is likely to lead to modestly faster growth because it will alleviate the diminishing returns of the old growth model. Most important, the composition of China’s growth will change under rebalancing—with less investment, more productivity growth, and more consumption. The extent to which China succeeds in this rebalancing will have a large effect on the global economy, and on developing economies in particular. Globalization is the big story of our era. It is shaping not just economies, but societies, polities, and international relations. If globalization is done wisely, this century could prove an unparalleled era of peace, partnership, and prosperity. If it is done badly, it might collapse to disaster. In recent years, against the backdrop of rising unilateralism and protectionism in the international community, China has resolutely pushed forward economic globalization, expanded the Belt and the Road international cooperation, and worked for win–win cooperation among all countries. China has been a great beneficiary of globalization—and a contributor, as its growth has served as a locomotive for the global economy, especially in times of economic and financial crisis. China’s take on globalization has never been universalist. Allowing different countries to pursue their own development paths without undue external influence has been the central theme of its engagement with the world. By rejecting one-size-fitsall globalism, it engaged globalization on its own conditions and experience. China inherited wisdom from the Chinese civilization, learning widely from the strengths of both east and west, but not copying from others. No country should put its own way on the pedestal as the only way. In China’s vision of “A Community of Shared Future for Mankind,” China painted a picture of “mankind” as “a community of shared future”, in which all countries enjoy the right to development. States certainly have interests, but they should view these in a broader context and refrain from pursuing them at the expense of others. China stands alongside other developing countries which together contribute the lion’s share of global growth. The world’s economic governance system must reflect this fact. For boosting the bargaining power of developing countries, China

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has adopted a strategy “walking on two legs”: creating new initiatives, notably the Belt and the Road international cooperation and institutions such as the Asian Infrastructure Investment Bank, while simultaneously reforming the postwar Bretton Woods international economic order. For this reason, China embraces free trade and globalization since they contribute to development. In addition, shared values are a prerequisite for a sustainable international order. The spirit of the Belt and the Road international cooperation reinforces the value of building a shared future for global communities. This aim draws on China’s own historical and cultural links with the world, and it is compatible with the international community’s aspiration for peace and development. The implementation of Belt and the Road international cooperation follows the principle of achieving shared growth through discussion and collaboration. At the core of Chinese culture is the notion of harmony in diversity rather than a zero-sum system of winners and losers. China’s development path has been clearly charted. But it is a path that is open to western wisdom and best practice. Dialogue between cultures and civilizations is essential if we are to secure a world in which everyone prospers. Confrontation does not work. China is becoming a leading member of the international community, taking a pragmatic approach, and adjusting strategy when circumstances demand it. For better cooperation and more effective communications between nations, China should continuously employ a multipronged approach to setting the global agenda. A shift in the nature of China’s international economic policies would help to promote effectively the global community with a shared future.

31.5 Conclusion It is true that the global economy has undergone drastic changes. Rapid technological change may eventually bring a new era of global prosperity. However, rather than wait for that new era to arrive, policymakers must act now with measures to enhance their economies’ potential growth. In addition, considering the prolonged period of slow growth combined with the global commitment to the sustainable development, the international community needs to renew its efforts to improve policy coordination. In this respect, the International Forum organized by Chinese Academy of Social Sciences should play an important role. Finally, one of the key beliefs is commonly described today as “actions speak louder than words.” This is a sentiment the international community must take to heart. Thank you.

Chapter 32

Creating a Community with a Shared Vision for the Future of Mankind Jerrie Ueberle

In preparation for this paper, I have studied the text of Xi Jinping’s presentation titled Secure a Decisive Victory in Building a Moderately Prosperous Society in All Respects and Strive for the Great Success of Socialism with Chinese Characteristics for a New Era delivered at the 19th Annual Congress of the Communist Party of China on October 18, 2017. It is apparent that China’s leadership and Central Government has been giving thoughtful and focused attention to these issues for some time. This Conference is another step toward creating awareness for a Shared Future for Mankind and gaining support to achieving this outcome. The issues and concerns of President’s Xi’s presentation are not only the focus for China but clearly are the focus for our world. We are at a pivotal point in our global development where we must address our common cause for humanity. As global citizens, we must connect our concerns with others and through communication and collaboration choose paths to progress that will unite and benefit all mankind. To build and construct a shared future for mankind it is important to first know the current status of the issues facing mankind and second, to make a powerful commitment to discover what is needed to create a future that will truly address these issues and impact humanity ensuring that no one is left out. A shared future must consider the equality and diversity of all people. Basic to making decisions on these issues is having a shared commitment that embraces respect and inclusiveness of all people, the agreed upon outcome being “each and every person” having a sharing future. The United Nations in 2000 initiated the Millennium Development Goals to address eight areas of critical concern to humanity: hunger, poverty, maternal and childcare, universal education, eliminating domestic violence, malaria, and HIVAIDS, environmental sustainability, and global partnerships. With a fifteen-year J. Ueberle (B) Global Interactions, Inc., Phoenix, USA e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_32

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timeline to achieve these goals, while great progress was achieved, not one country achieved even one goal. Progress was made, yet the basic issues continue to exist and the outcomes were not achieved. We know we can do better! Resources, strategies, technologies, knowledge, and materials were sufficient to have achieved the outcomes for these eight goals. What was missing was leadership focused on these issues. Not a lack of leaders; a lack of leaders committed to achieving these goals. There has been a lack of leadership focusing on humanity and the lives of our global family. The world has an abundance of leaders, but a scarcity of leaders whose focus in on humanity. It is essential that we commit to developing leaders who are committed to the future of humanity and have concern for equality and justice. We have been successful in putting a man on the moon, yet we have not been successful in putting food in the mouths of children in our communities. We have been successful in connecting people electronically and sharing news, research, entertainment, and ideas, yet we have not been successful in putting books in the hands of children in villages and remote areas. We have been successful in increasing the numbers of students in our secondary and tertiary institutions of education, yet there are far too many children who have never entered a classroom to begin their education and far too many children will not have adequate skills to have healthy lives or decent jobs. We continue to be successful in extending the life expectancy of aging populations, yet high incidences of infant mortality and girls and women who die delivering babies has not been prevented. Manufacturing of goods and consumerism has grown exponentially but the distribution of goods is dramatically unequal. More than seventy per cent of the food produced never reaches the consumers and yet everyday children and adults die of hunger. Our affluence has produced conditions that have adversely impacted the climate causing air quality, marine life, and our water supplies to raise alarming concerns for our health and quality of life. The resources to address these dire conditions exist. There are answers to many concerns we face worldwide. The most important question is WHY? With solutions to these preventable and unacceptable social issues why is leadership lacking to resolve these issues? How do we know there is inadequate leadership? Because the conditions continue to exist. The lives of millions, predominately women and children, around the world are marginalized and they do not have equality nor a future that will ensure equality. This Conference could be the turning point for accelerating responsible leadership and committing to achieving a shared future for humanity. We all know a better world is possible. We have conversations about things that we believe need to change. We identify conditions that are unacceptable and unnecessary. We know possibilities for addressing the issues we see in our communities, our countries, and the world. However, knowing is not sufficient. Taking action on what we know and beginning to apply what we know to what we do will produce the results we want. We are smarter than we act. We are more capable than we perform. Recognizing conditions that we know could be better and not responding, will not achieve the outcome we desire. We know we could do a better job in conserving

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energy, improving our health, being more responsible, implementing changes in our jobs, companies, or communities. We talk with purpose and passion. Yet our actions do not follow our conversations. We know ways to engage and contribute, yet we have not delivered sufficient support. How do we know? The unacceptable conditions impacting millions of people around the world continue to exist. Now it is the time to create the world we want to live in. A world with a shared future for humanity. The United Nations Sustainable Development Goals address the basic issues for achieving a shared future. They respond to the conditions that President Xi’s spoke about in his address to Congress and to the issues of this Conference. Let us give attention to the leadership needed to achieve these results. The UN SDGs, when achieved, will be a great leap forward toward improving the lives of Chinese people, as well as being a model for the world in the construction and development of a shared future for mankind. China could lead the way by focusing on achieving the Goals by the 2030 timeline set by the United Nations. By creating and focusing leadership for humanity this outcome can be realized. A recent Conference, Women Deliver, held in Vancouver, Canada, in June 2019, attended by more than 6000 women from around the world, reported that not one country is on target to achieving the UN Sustainable Goals by 2030. After failing to achieve the original eight Millennium Goals during the 2000–2015 time frame, and the establishment of 17 goals for the new 15 year timeline (2015–2030), we have yet to engage the leadership necessary to align our resources to the outcomes that are basic and essential to the well-being of our world’s most fragile and vulnerable people, women and children. China has the largest population on the planet, thus it has more at stake than any other country in the world. It is a powerful choice to take on this challenge. I recently saw a document that said, “100 things to ensure the achievement of the UN SDGs.” . Educate girls . Prepare women for leadership roles. Then it said, “If you do numbers 1 and 2, you don’t have to do the other 98!”. Could that truly be the solution? Could it really happen by doing those two things? Let’s take it on and find out. Let’s focus our scope on women and children and measure our outcome. This is not to say we have not already done work in this area. We did it. Yet the issues and challenges continue to loom. Our progress has been impeded, and our results are far from the finish line. The UN SDGs have a vast amount of data and a 20-year history of what has worked and what has not worked in countries around the world. What is missing is identifying and training, sufficient numbers of passionate and purposeful leaders committed to the human needs of women and children who will focus the resources on achieving the outcomes described in the UN SDG’s. That is where the World Academy for the Future of Woman began its work implementing action leadership to accelerate women’s leadership worldwide.

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Because the future belongs to our youth, it is imperative that we engage them in understanding the conditions and in creating solutions. University students represent a large population who have already proven themselves academically. They are at an age of making career, life, and economic decisions that will impact their future. Their choices will influence the future of many young men, because they will be the decision makers and the consumers, as well as the role models, for those who observe and follow their lifestyle choices. Aligned with President Xi’s vision of a shared future for mankind, the UN SDGs research and 17 goals provide data and a baseline for beginning our work and measuring our results. Poverty, Goal 1, and Quality Education, Goal 4, are intertwined by recognizing that without education and training, people will be unable to support themselves economically. Education must be more than basic skills and job training. With artificial intelligence, our workforce must be prepared to be flexible and resourceful, not merely to have skills to do tasks that ultimately will be done robotically. Educating people to communicate and to build strong relationships and care about their health and wellbeing will not only strengthen their ability to work, but it will also strength them to have a better quality of life. Education will prepare them for living a meaningful life, not just a life focused on achieving wealth and affluence. Goal 2, Zero Hunger, and Goal 3, Good Health and Well Being, are also intertwined. While millions of people lack adequate food, more than seventy per cent of the world’s food production never reaches the consumers. It is never harvested from the fields or processed by the vendors and does not reach the market or the tables or the mouths of the people who are dying of starvation. This is an example of lacking leadership to ensure that the resources are allocated to utilize the commodities that exist to solve this crisis. Good Health is not merely the result of adequate food; it is the consumption of quality food that is nutritious and provides a balance of vitamins and nutrients that support children’s growth and development. Good health prepares women for healthy pregnancies, so their baby’s lives, and their lives, are not in jeopardy. It allows for women to have good mental and physical health and to have the energy and strength to enjoy life as they care for their families. Good Health and Well Being also address over consumption of food that has resulted in obesity, as well as the misuse of drugs, alcohol, and lifestyles that damage and diminish the health of large sectors of our population. Goals 6, Clean Water and Sanitation, and Goal 7 Affordable and Clean Energy, speak to the alarming environmental issues causing populations to have water that is not consumable and air that is toxic and damaging to our health. Scientists and environmentalists already have answers and resources to prevent and improve these conditions. We do not have sufficient numbers of leaders who are committed to addressing the pollution caused by manufacturing and over consumption of items that contribute to these issues. Recognized and widely acknowledged examples are manufacturing that pollutes our rivers and air, as well as transportation emissions that contaminate our environment. We know how to eliminate these causes; we don’t have responsible leadership to direct and manage the resources to alter these practices

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and policies that continue to accelerate the problem. We have answers but we lack the courage to implement the laws and policies to bring forth the changes. We sell out to corporate, commercial or consumer demands. Goal 8, Decent Work and Economic Growth, targets jobs that are harmful to the workers and jeopardize their safety and health. Many poor workers do the jobs of animals such as hauling wood and water, plowing fields, or working in landfills amidst toxic materials. Others risk their lives with unsafe equipment or working long hours in factories where air, noise and lighting are at harmful levels for their health. Better safety and health standards are needed; leaders can change these conditions. Attention to the number of hours employees work each day, the number of days they work each week, and the low pay workers receive for their labor, calls for more humane management. Better education will provide options to these laborers who jeopardize their health and receive salaries that are insufficient for their basic needs and never gain skills to ever rise to a higher level of employment. Industry Innovation and Infrastructure, Goal 9, and Goal 12, Responsible Consumption and Production, speak to the necessity of over production and consumer marketing that encourages the widening of the economic and education gap by promoting quantity over quality and creates the desire to consume more when less is adequate and a wiser decision. Upgrading products that make current models obsolete requiring more purchases in the belief that the “latest is the greatest” has created landfills of computers, cars, electronics, and cell phones that represent irresponsible manufacturing and leadership. Demolition of buildings and new construction in cities around the world, where there is insufficient housing for homeless is another example of misuse of resources and poor fiscal and resource management. Climate Change, Life Below Water, and Life on Land, Goals 13, 14, and 15, speak to the protection of our environment. This is an immediate and critical concern we have faced in recent years that has not gotten sufficient attention or support. Answers abound but solutions are not being implemented at a rate that is causing a decline in the mounting dangers. We face extinction of many species if these practices continue. Without question, there is a threat to our own well- being and survival. Leaders are currently considering Goal 11, Sustainable Cities and Communities, Goal 16, Peace, Justice and Strong Institutions, and Goal 17, Partnerships for the Goals. However, evidence is lacking that there is adequate attention given to the immediate changes that must occur to reserve the trends. More attention appears to be spent on growth and quantity than the attention spent on long term maintenance and controlled growth. Replacing rather than repairing, increasing size rather than efficiency, and demanding more rather than realizing what is adequate will only contribute to the problem. Sufficiency rather than abundance requires thoughtful decisions for responsible leaders who must consider maintaining progress without reckless consumption. The two goals that offer the greatest possibilities are Goal 5, Gender Equality, and Goal 10, Reduced Inequalities. They offer the greatest possibilities because they impact the greatest number of people. These two goals bring women, and those who have not had adequate resources available to them, onto the playing field. By making education, jobs, access to health, wealth, safety, and well- being part of their future,

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they can become independent, self-supporting and contributing members in their families and communities. Their inclusion builds capacity and increases our supply of human resources to achieve the other fifteen UN SDGs. Women represent 49.6 of the world’s population. Women are considered a minority because they do not share the same power, privileges, rights, and opportunities as men. They are among the lowest paid, poorest educated, have less wealth, less earning power, and receive less health care than men. All my life conditions for women on the planet have improved. Each year more women are educated, receive better health care, and more get jobs. Yet on every measure of economic, education, health and social well-being, women remain at the bottom of society. Every year conditions have gotten better but they never rise to reach a level of equality compared to their male counterparts. Data on women and girls are indicators of the dire and urgent need to meet these goals. . One in four girls will be born into poverty . Childbirth is the number one cause of death for girls between 15 and 18 years of age . One half of girls in developing countries do not enter high school . One in three women are victims of domestic violence . Sixty percent of malnourished people are women. Data on women in job with leadership roles is equally alarming. . . . . . .

Only 24.3% of members of national parliaments are women Only 5% of Fortune 500 CEOs are women Only 7% of top executives are women Only 10% of S&Ps top management are women Only 19% of corporate board seats in S&Ps are women Only 20% of the highest paid executives are women.

Women and men are working together to bring different perspectives and skill sets to decision making. Corporations report a greater financial bottom line when more women are involved in executive decisions. Women’s engagement results in resources being allocated differently. Women have a greater capacity to enhance and control local food security, shape laws, and address social issues differently than men, and to engage more collaboratively in teamwork and shared values for diverse populations. Women are more inclusive, which builds capacity and increases the supply of bringing a different perspective and bring a different perspective giving added value to the process and outcomes. Without minority and underrepresented populations engaged and contributing, the imbalance of power and resources will continue to diminish the possibilities of their futures. When only a few speak and decide for the masses, all others’ concerns are marginalized. A plan for China’s 70-Year Development and the Construction of the Community with a Shared Future for Mankind is a visionary step toward a world that works for everyone, with no one left out. When China achieves the UN SDSs, it will be a model

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for the rest of the world. Embracing the UN SDGs as the baseline for what is needed for humanity, focusing on the equality of women and the inequalities among groups and geographic areas is the starting point. Accelerating and advancing leadership of women and underrepresented groups is a key factor. The task is large. The importance is urgent. The need for engagement and action at all levels can produce the impact and create the future we know is possible. This is a call for action. This is a call for leadership to create a Shared Future for Mankind.

Chapter 33

A Community with a Shared Future for Mankind: New Interaction Between China and the World Javier Manuel Paulinich Velarde

33.1 Introduction In the late 1970s, China began a process of economic reforms and trade openness aimed at expanding the private sector’s participation and the market economy. It changed from a poor, lagging, and closed country to an open nation that keeps moving on. This process has been accompanied by high and permanent rates of economic growth in such a way that transit to a market economy has achieved a level of success not recorded in other transitions. Following its accession to the World Trade Organization (WTO) in 2001, it assumed rights and obligations, and intensified its participation in economic globalization through the production of exportable goods and services. Thus, it created internal conditions to ensure sustained economic development with high growth rates until it became internationally competitive. The Chinese economy became a formidable exporter of industrial goods with a large share of foreign companies. The country also became a major buyer of raw materials, energy, and foreign direct investment (FDI), turning into a key player in the global economy. In 2018, China’s Gross Domestic Product (GDP) had grown 6.6% and was equivalent to 66% of the United States’ and 16% of global GDP, becoming the world’s second largest economy.1 This significant growth undoubtedly requires containing some social costs that cannot be left unmentioned, such as the growing gap between the urban and rural sectors, a precarious social protection system, and damage to the environment, challenges that the Chinese government addresses as its priorities.

1 https://www.imf.org/es/Publications/WEO/Issues/2019/03/28/world-economic-outlook-april2019.

J. M. P. Velarde (B) Latin American and Caribbean Economic System, Caracas, Venezuela e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_33

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These achievements are due to the hard work and courage of the Chinese people and the vision of united, centralized leaders, who understood that the country should open up to the outside world and embark on a path of attracting foreign investment and developing trade openness. The path to development and modernization of the economy was initiated by Deng Xiaoping, who boosted the success of economic growth with his “Reform and Opening” programme, also known as “Socialism with Chinese characteristics.”2 Subsequent rulers Jiang Zemin, Hu Jintao, and current President Xi Jinping continued this development policy, allowing the economy to grow at a breakneck pace.

33.2 Overall Context Following the profound transformation in recent decades, China has gained a position on the world stage at the political and economic levels. Changes experienced at the economic level are largely due to the adoption of a development model based on its insertion into global value chains. The exponential growth of its market economy with high demand for inputs in the industrial, mining, and forestry sectors and accelerated urbanization have resulted in an environmental deficit and challenges for sustainable development, despite China’s efforts to deal with climate change and commitment to the 2030 Agenda’s Sustainable Development Goals. Politically, it is a respected interlocutor. Since its founding on 1 October 1949, China has based its international relations on the Five Principles of Peaceful Coexistence: mutual respect for each other’s territorial integrity and sovereignty; mutual non-aggression; mutual non-interference in each other’s internal affairs; equality and cooperation for mutual benefit; and peaceful co-existence.3 Since then, China has shown a penchant for dialogue, negotiation, cooperation, the pursuit of common interests with its counterparts, as well as the creation of strategic alliances. With developing countries, it has expanded solidarity and cooperation, exploring new areas for cooperation based on the principles of “equality and mutual benefit, emphasizing practical results, diversity in different forms, and the pursuit of common development.”4 Chinese authorities have fostered the concept of “A community with a shared future for mankind” as a contribution to presenting solutions to the major problems facing the future of mankind. According to this approach, countries should consider the legitimate concerns of other countries in the pursuit of their own interests, and the common development of all should be promoted with their own domestic development. President Xi Jinping, in his line of thought on Socialism with Chinese Characteristics for a New Era, stresses that this idea should be understood from the 2

https://www.cepal.org/es/publicaciones/11958-evolucion-perspectivas-la-reforma-la-aperturachina. 3 http://espanol.cri.cn/1161/2013/09/18/1s290110.htm. 4 Zhang Qingmin, China’s Diplomacy, China Intercontinental Press, 2010, p. 5.

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following perspectives: (i) Helping developing countries break their bottlenecks; (ii) addressing environmental challenges; and (iii) taking care of culture and civilization so that they can play their role.5 This concept is materialized through the development of the Silk Road Economic Belt and the 21st Century Maritime Silk Road, both part of the “One Belt, One Road” Initiative, understood as a huge platform for international cooperation and promotion of dialogue, so that the countries involved can achieve their common development at the pace of economic globalization. It aims to increase connectivity among the Asian, European, and African continents, with the purpose of establishing trade networks and land and sea infrastructures that stimulate long-term regional economic growth and development, benefiting all participating countries.6 Such an undertaking will require a large funding effort by the Chinese government. New public and private financing instruments will be developed for the various projects, in which different governments, companies, and investment funds will take part in cooperation with China, creating opportunities that favor initiatives of public– private partnerships. This process must be accompanied by policies and institutions that support entrepreneurs, businesses, and trade. The initiative is undoubtedly a creative proposal in the new era of globalization that will enable prosperity and interconnection among countries around the world. It shows China’s global vision and responsibility as a great power aimed at contributing to strengthening international relations. At present, it has extensive support from and counts on the participation of more than 100 countries and international organizations around the world, including Antigua and Barbuda, Bolivia, Chile, Costa Rica, Cuba, Ecuador, Guyana, Panama, Peru, Uruguay, Trinidad and Tobago, and Venezuela.7 In this context, from 2014 to 2017, trade connectivity increased considerably. Total trade between China and other countries amounted to over US$4 trillion, and China’s cumulative investment in those countries totals about US$60 billion.8 This idea of global governance would lead to the strengthening of bilateral ties between China and other countries, with new impetus in efforts to establish new cooperation relations and consultations in cases of international crises. Also, at the trade level, it is an opportunity to stimulate trade and exports in participating countries, with relatively low tariffs on most products in the markets, considering that transport costs and non-tariff measures are the main trade barriers.9 Chinese authorities have repeatedly expressed an interest in reforming and rebuilding a new world order. The creation of a community with a shared future fits into that order, where China is the main engine for global development and an 5

http://spanish.xinhuanet.com/2019-08/10/c_138299189.htm. Enfoque de China: La diplomacia del jefe de Estado de China abre nuevos caminos. 6 OMC, “Órgano de Examen de las políticas comerciales. Informe de China,” Document WT/TPR/G/375, 2018, p. 13. 7 https://www.dinero.com/internacional/articulo/los-paises-de-america-latina-que-forman-partede-la-nueva-ruta-de-la-seda-de-china/270108. 8 OMC, Idem. 9 OMC, “Órgano de Examen de las políticas comerciales. Informe de la Secretaría. China,” Document WT/TPR/S/375/rev.1, 2018, p. 20.

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anchor of stability for world peace through its peaceful development; where the zerosum perspective in international relations is replaced by dispute resolution through dialogue and consultation; where common challenges and risks are met with international cooperation; where cooperation for development of developing countries continue, so that they can be incorporated into global and international value chains; where protectionism and unilateralism are not invoked, because they are threats that undermine the multilateral trade regime and production and can lead the world to recession; where scientific and technological advances are shared; and where there must be complementarity between the 2030 Agenda’s Sustainable Development Goals and the medium and long-term development agendas of countries to achieve quality development by taking human beings as the centre of attention.10

33.3 China in World Trade China’s accession to the WTO consolidates its leadership position and definitively inserts it into the global market under the conditions and demands imposed by the organization. Being part of the WTO ensured that China receives equal treatment in its trade relations with third countries and makes commitments aimed at achieving greater openness and liberalization of its economic regime to expand its integration into the world economy and provide a more predictable environment for trade and foreign investment.11 The incorporation of China into the WTO was beneficial for both parties. Among the market access conditions, China has reported greater openness of its local markets for goods produced abroad, as well as for goods produced by foreign companies in China.12 This is a favorable situation, given its need to attract capital and technology to maintain high growth rates. The removal of tariff barriers allowed for an increase in FDI in the country, mainly from the United States and the countries of the European Union (EU), as many of the restrictions imposed on foreign capital were removed. The external sector was also driven by export growth. China also committed itself, in the sector of tariffs, agriculture and trade in services, to the application of national treatment to foreign enterprises, creating greater openness in the financial market.13 Moreover, China’s emergence in international trade was a stimulus to the world economy, generating greater legal certainty and greater transparency in freedom of trade. For example, it offered easier market access; allowed investment in previously limited or closed sectors; and began to protect intellectual and industrial property. As a result, China has shown great dynamism over the past two decades that made it a global economy, the largest exporter, and the second largest importer at the global 10

https://www.youtube.com/watch?v=v8UrhWUAzIU Speech by Foreign Minister Wang Yi at the 74th session of the UN General Assembly. 11 https://www.wto.org/spanish/news_s/pres01_s/pr252_s.htm. 12 https://www.wto.org/english/thewto_s/countries_s/china_s.htm. 13 https://www.wto.org/spanish/thewto_s/countries_s/china_s.htm.

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level.14 In addition, China respects the authority of the multilateral trading system by actively participating in WTO Dispute Settlement Body (DSB) procedures. From 2013 to 2017, China has participated in seven cases submitted to the DSB, five times as a respondent and twice as a complainant.15 In addition, it quickly became the first partner of many economies around the world, increasing trade relations with developing countries and reducing the participation of developed countries as partners. With Asian countries, it established itself as a key player in global value chains and as the main regional market for intermediate goods, assembling parts imported from other economies in the region and producing final goods for export mainly to the EU and the United States. However, the growth of its economy significantly increased demand for raw materials (minerals, energy, food, and industrial products), exerting pressures on international markets and on the pricing of various manufactures and commodities, including textiles, steel, and oil.16 Moreover, while reduction in tariffs allowed for growth in exports from certain countries, it also negatively impacted Latin American economies by intensifying competition with Chinese products. Thus, prospects for export growth in some developing countries were compromised, particularly in the textile sector, in which China is highly competitive, and agriculture, which enjoys state support to ensure a level of food self-sufficiency. In addition, some countries in the region were displaced from the U.S. market, the main market for many of them, as Chinese products are more competitive.17 The phasing out of foreign capital restrictions made China a market of great interest to many foreign investors. The Asian country offered abundant labor, a huge market, improved infrastructure, and preferential policies.18 According to the World Investment Report 2018 published by the United Nations Conference on Trade and Development (UNCTAD), China was ranked as the second largest recipient of FDI in the world after the United States and before Hong Kong, China. The country’s economy ranked second among the most attractive multinational companies for 2017–2019, behind only the United States. With steady growth over several years, FDI inflows continued to increase between 2016 and 2017, from US$133 billion to US$136 billion. This growth benefited from liberalization plans, the rapid development of the high-tech sector, and the establishment of free trade areas.19

14

Rosario Campos, and Romina Gaya, “China en la OMC: Política comercial y status de economía de mercado,” BID, 2016, p. 91. 15 Informe Secretaría OMC sobre China, p. 217. 16 Rosario Campos, and Romina Gaya, “China en la OMC: Política comercial y status de economía de mercado,” BID, 2016, p. 90. 17 José Ramón García, “Efectos de la adhesión de China en la Organización Mundial de Comercio e implicaciones para América Latina,” 2006, p. 15. 18 Rosales y Kuwayama, China y América Latina y el Caribe: hacia una relación económica y comercial estratégica, CEPAL, 2012. 19 https://es.portal.santandertrade.com/establecerse-extranjero/china/inversion-extranjera.

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33.4 Conclusions China’s economic development enabled its entrenchment in the process of economic globalization, thus promoting multilateralism, opposing protectionism, advocating for the liberation and facilitation of trade and investment, and respecting established channels for trade dispute settlement as essential factors for quality and sustainability of countries’ economic growth. The impact of China’s economic growth and greater economic openness creates strengths and weaknesses. For example, China’s economic growth is supposed to have an impact on climate change, but addressing it, as well as reducing emissions, requires concerted global efforts. With respect to Latin America, we can see a window of opportunity. In general, the time is ripe to produce goods that China will demand if it wants to maintain its rates of economic and social progress. Growth factors should be modified from investment to consumption, from external demand to domestic demand and from manufacturing to services. In addition, President Xi Jinping’s call to find in culture a system of dialogue among civilizations, characterized by the belief that no culture is superior to another, could be seen as a counterproposal to increased tensions by presenting dialogue and conciliation as a constructive alternative to the idea of conflict. In this context, President Xi Jinping has stated that the essence of Chinese culture is the pursuit of harmony with all nations, focusing on generating benefits for people and bring them stability and prosperity. In the context of the multilateral trading system, China’s actions have strengthened the negotiating capacity of developing countries based on the proposed principle of extensive consultations, joint contributions, and shared benefits. Despite its limitations, the WTO dispute settlement system is a useful tool for promoting compliance with commitments made and places small countries in a more symmetrical position with respect to bilateral areas of conflict resolution. China can certainly take a leading role in concerted efforts and jointly shape the future of mankind by making contributions to the issue of global governance and building a consensus in favor of multilateralism. Its contribution to international trade, as the largest developing country, has been aimed at fostering equal participation and consultation, in order to enable more developing countries to share the opportunities and interests generated by economic globalization, prevent the gap between the rich and poor from growing further and protect some countries from marginalization.

33.5 Recommendations to Strengthen the Links Between Latin America and China Based on China’s project to create a community with a common future for mankind, as far as Latin America is concerned, the following recommendations are proposed.

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1. Promote South-South cooperation to continue supporting international efforts to assist developing countries in their pursuit of the right to development and better quality of life of their populations, in order to reduce existing inequality gaps. 2. Create a strategic alliance with LAC that is governed by peaceful development and where mutual respect, fairness, justice, and cooperation for the benefit of all prevail, aimed at increasing the efficiency of the business processes that attract more foreign investment. 3. As an important player in the global system of economic governance and a strong advocate of the multilateral trading system, China could share its development experiences and strengthen closer partnerships with LAC that aim to support multilateralism, respect the market, and promote equitable development and peace among nations. 4. Within the framework of the policy for promoting trade facilitation and investment, it is important to consider the role of the countries in the region as exporters of agricultural and mining commodities and allow better access to their market, in order to avoid possible displacement of the trade and financial activity of Latin American economies. A form of joint development could be considered. 5. Establish concerted strategies with LAC that overcome constraints and enhance capacities to achieve sustainable, inclusive, quality, and environmental development, in line with the Sustainable Development Goals set forth in the 2030 Agenda of the United Nations. 6. Actively incorporate LAC into the new model of international cooperation and global governance, the Belt and Road Initiative, which offers advantages and benefits for the whole world. Special treatment for small and medium-sized enterprises (SMEs) to take advantage of the commercial potential presented with the development of connectivity projects. Internationalization opportunity for SMEs, which would increase their competitiveness and enable them to function in international markets and enjoy the benefits of trade. 7. Establish a LAC-China Forum on a permanent basis involving intergovernmental agencies in the region, such as the Latin American and Caribbean Economic System (SELA), among others, to promote consultations and explore cooperation mechanisms that would strengthen the economic and social development based on the well-being of the population. Caracas, 17 October 2019.

Suggested Reading Campos, Rosario & Gayá, Romina. “China en la OMC: Política comercial y status de economía de mercado”. Revista Integración y Comercio #40, June 2016. Intal Lab BID. ISSN 19959524.DNDA 5292070. Available at: www.iadb.org/inatl/icom. CEPAL. “Evolución y perspectivas de la reforma y la apertura en China”. Revista Cepal Agosto1994. Available at: https://www.cepal.org/es/publicaciones/11958-evolucion-perspecti vas-la-reforma-la-apertura-china.

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Cesarin, Sergio & Moneta, Carlos. “China y América Latina. Nuevos enfoques sobre cooperación y desarrollo. ¿na Segunda Ruta de la Seda?” Red de Centros de Estudio de Asia y el pacífico de América Latina y el Caribe. Proyecto BID- INTAl. 2005. CRI Online. “El Desarrollo diplomático de China”. 2013-09-18. Available at: http://espanol.cri.cn/ 1161/2013/09/18/1s290110.htm. Dinero Newsletter. “La ruta de la seda de China llegó a la región: Colombia está por fuera”. April 2019. Available at: https://www.dinero.com/internacional/articulo/los-paises-de-america-latinaque-forman-parte-de-la-nueva-ruta-de-la-seda-de-china/270108. Estevadeordal, Antoni. BID. “Inversiones de ALC en China: Un capítulo nuevo de las relaciones entre América Latina y el Caribe y China”. Sector de Integración y Comercio. 2014. García, José Ramón. “Efectos de la adhesión de China en la Organización Mundial de Comercio e implicaciones para América Latina”. Universidad Santiago de Compostela. 2006, pp 34. Ghiotto, Luciana. “La negociación sobre Reglas para la Facilitación multilateral de las inversiones: apuntes para la discusión”. Work document. Transnational Institute, 2017. Guardia, Alexis. “China en la Globalización”. Revista de Estudios Internacionales. Instituto de Estudios Internacionales. Universidad de Chile. Vol. 37 N° 146 (2004): July–September. https:// doi.org/10.5354/0719-3769.2011.14543. International Monetary Fund. “World Economic Outlook”. April 2019. Available at: https://www. imf.org/es/Publications/WEO/Issues/2019/03/28/world-economic-outlook-april-2019. Organización Mundial del Comercio. “La Conferencia ministerial de la OMC aprueba la adhesión de China”. Comunicados de Prensa 2001. Press/252. Available at: https://www.wto.org/spanish/ news_s/pres01_s/pr252_s.htm. Organización Mundial del Comercio. Órgano de Examen de las políticas comerciales. “Informe de China”. Document WT/TPR/G/375, June 2018. p 25. Organización Mundial del Comercio. Órgano de Examen de las políticas comerciales. “Informe de la Secretaría: China”. Document WT/TPR/S/375. rev.1. September 2018. pp 217. Organización Mundial del Comercio. “China y la OMC”. Available at: www.wto.org/spanish/the wto_s/countries_s/china_s.htm. Rodríguez, Mario. “La evolución de la política exterior China”. Araucaria. Revista Iberoamericana de filosofía, Política y Humanidades. Vol 18, N° 35, 2016. Rosales, O and Kuwayama, M. “China y América Latina y el Caribe: hacia una relación económica y comercial estratégica”, CEPAL, Santiago, Chile. 2012. Santander, Trade Portal. “China: inversión extranjera”. Available at: https://es.portal.santander trade.com/establecerse-extranjero/china/inversion-extranjera. Qingmin, Zhang. “China’s Diplomacy”. China Intercontinental Press, 2010, p. 160. Xinhua españl. Enfoque de China: La diplomacia del jefe de Estado de China abre nuevos caminos. 2019-08-10. Available at: http://spanish.xinhuanet.com/2019-08/10/c_138299189.htm. Wang, Yi. Speech by the Minister of Foreign Affairs of the People’s Republic of China. 74th session of the United Nations General Assembly. September 2019. Available at: https://www.youtube. com/watch?v=v8UrhWUAzIU.

Chapter 34

Addressing Non-tariff Measures for Building a Community with a Shared Future for Mankind Alexey Kravchenko

34.1 Introduction In 2018, China held the largest share in global trade. Its engagement in international trade started from Deng Xiaoping’s Chinese economic reforms, known as gˇaigé k¯aifàng (改革开放)—“reform and opening” – and played a crucial role in China’s economic development. As can be seen in Fig. 34.1, since China opened up in late 1970s, its trade share of GDP has increased from below 10% to nearly 40% in 2000. The next big boost came from China’s accession to the World Trade Organization (WTO) in 2001, which further saw its trade to GDP ratio increase to 65% in the Reference to dollars ($) are to United States dollars unless otherwise stated. The designations employed and the presentation of the material in this publication do not imply the expression of any opinion whatsoever on the part of the Secretariat of the United Nations concerning the legal status of any country, territory, city or area, or of its authorities, or concerning the delimitation of its frontiers or boundaries. Where the designation “country or area” appears, it covers countries, territories, cities or areas. Bibliographical and other references have, wherever possible, been verified. The United Nations bears no responsibility for the availability or functioning of URLs. The views expressed in this publication are those of the author and do not necessarily reflect the views of the United Nations. The opinions, figures and estimates set forth in this publication are the responsibility of the authors and contributors, and should not necessarily be considered as reflecting the views or carrying the endorsement of the United Nations. Any errors are the responsibility of the authors. Mention of firm names and commercial products does not imply the endorsement of the United Nations. This publication is the sole responsibility of the author. Any opinions or estimates reflected herein do not necessarily reflect the opinions or views of Members and Associate Members of ESCAP. A. Kravchenko (B) Trade Policy and Facilitation Section of Trade, Investment and Innovation Division of United Nations Economic and Social Commission for Asia and the Pacific, Bangkok, Thailand e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_34

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Fig. 34.1 China’s trade as percentage of GDP and GDP per capita, 1960–2018. Source Author’s calculations based World Bank’s World Development Indicators database, Accessed October 2019

mid-2000s. The period of rapid trade growth coincided with expansion in GDP per capita. Prior to the economic reforms, the per capita GDP grew at 3.2% per year, whereas after 1978 up to 2018, it grew at an average rate of 8.4% per year. Critically, the economic prosperity benefitted China’s overall population: in 1990, the number of poor, defined as people living at $1.90 a day, was more than 750 million in China (with a population at that of 1.13 billion), whereas by 2015, that number shrank to 10 million (with a population of 1.37 billion). Without a doubt, China’s trade-led economic growth has been one of the greatest global success stories of alleviating poverty. To most observers, to reap developmental opportunities offered by enhanced trade, the focus generally concerns reducing its most prominent barriers: tariffs. This paper argues that the focus should now be significantly shifted to non-tariff measures (NTMs). Over the past two decades, while the applied tariffs in the Asia-Pacific region have halved, the number of NTMs, including sanitary and phytosanitary (SPS) measures and technical barriers to trade (TBTs), has risen significantly (Fig. 34.2). Both in relative and absolute terms, the importance of NTMs vis-à-vis tariffs as an impediment to trade has grown. While the higher tariffs imposed by the United States and China over the past two years make headline news, the rising importance of NTMs as barriers to trade at the regional and global level is expected to continue (see Box 34.1). In fact, a key concern is that trade tensions evolve from the existing relatively transparent tariff wars to discriminatory implementation of NTMs, the impact of which are much more difficult to predict. By ESCAP’s and UNCTAD’s estimates, the trade costs of NTMs are more than double that of ordinary customs tariffs. As such, they have become a key concern for traders as well as for trade policy makers aiming to ensure that trade can continue to support sustainable development.

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Fig. 34.2 Average applied tariffs and annual new notifications to WTO of SPS & TBT measures in Asia–Pacific. Source ESCAP & UNCTAD, based on data from WTO and UNCTAD through WITS. Note There is no reliable data on how many of the new notifications to the WTO come into force as only proposed or amended NTMs are notified. However, it is often assumed that a majority of them do, and the trend of the stock of NTMs is essentially cumulative across the years

Box 34.1: Trade Tensions and NTMs Many tariffs featured in the news are often technically not ordinary customs tariffs but are in fact “non-tariff measures.” For example, United States tariffs on solar panels and washing machines were notified to the WTO on 26 January 2018 as part of the WTO Agreement on Safeguards due to purported findings of serious injury on threat thereof caused by increased imports: ICNTM Chapter D.1 ,2 Subsequent United States’ tariffs on steel and aluminum were also safeguard measures, and as such, were challenged by other WTO members as being inconsistent with the Agreement (WTO, 2018a). Buy American Laws, which instructed all United States Federal entities to source goods, products, or materials, including iron, steel, and manufacturing goods from producers in the United States fall under Chapter M—Government Procurement Restrictions (The White House, 2017). In the ongoing tariff spat between China and the United Sates, to compensate United States agricultural producers for the retaliatory Chinese tariffs, the Federal Government disbursed $12 billion to affected farmers in 2018 and plans to spend a further $16 billion in 2019—Chapter L (subsides other than export subsidies) in ICNTM classification (USDA, 2019; Congressional Research Service, 2019).

1 2

See Appendix 34.1 for the classification on NTMs. See G/SG/N/8/USA/10/Suppl.3 & G/SG/N/8/USA/9/Suppl.4.

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NTMs are policy measures other than ordinary customs tariffs that can potentially have an economic effect on international trade in goods, changing quantities traded, or prices, or both (UNCTAD, 2012). In themselves, they are not inherently good or bad. They often serve legitimate and necessary purposes, such as protection of human, animal, and plant health or protection of the environment, and can be important instruments in achieving the 2030 Agenda for Sustainable Development. For example, strict emissions standards on imported vehicles, a type of technical NTM, are aimed at addressing air pollution. Furthermore, although NTMs such as food standards generally increase production and trade costs, they can also potentially boost trade under certain conditions. At the same time, a key characteristic of NTMs is that they generate costs for producers and traders in adhering to them. Such costs raise prices, inhibiting international trade. NTMs are often more complex, less transparent and more difficult to monitor than tariffs. They, therefore, sometimes can provide a means for Governments to discriminate against imported products, if so desired, without appearing to breach the non-discrimination principle of the global trade regime. Within this context, this paper is structured as follows. Section 34.2 outlines the trends and stocks of NTMs within the Asia-Pacific region. Section 34.3 links them to the Sustainable Development Agenda. Section 34.4 provides estimates of trade costs associated with NTMs. Section 34.5 concludes and provides policy recommendation on reducing such costs. It is argued that transparent, non-discriminatory use of certain NTMs that are aligned with international standards can contribute to building a community with a shared future for mankind, as envisaged in the 2030 Agenda for Sustainable Development, through ensuring that while important public policies objectives are met, traders and consumers are not unnecessary burdened with higher costs. The analysis in this paper is largely drawn from the Asia-Pacific Trade and Investment Report 2019: Navigating Non-tariff Measures towards Sustainable Development, where a more detailed and nuanced discussion is presented. (ESCAP & UNCTAD, 2019).

34.2 Trends and Stocks of NTMs in Asia and the Pacific Region Several WTO agreements set out multilateral rules on NTMs, which includes their notifications. Since 2013, globally, about 3000 new or changed NTMs have been reported to the WTO every year. Most of the reported measures have been technical barriers to trade and sanitary and phytosanitary measures (see Annex 1 for the classification of NTMS—the ICNTM). In 2018, 95% of all notifications were SPS and TBT, with the rest falling under contingent trade protection category (Chapter D in ICNTM). The number of new SPS and TBT measures initiated globally in 2018 reached 3466, a 16% increase from 2017.

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The lack of consistent notification coupled with the fact that not all economies are WTO members prompted UNCTAD to lead an international effort with many national, regional, and international partners, including ESCAP, to collect comprehensive data on NTMs.3 NTM data is collected by extensively reading and analyzing national legislative documents, such as laws, decrees, or directives. Once a relevant regulation is identified, each specific provision is classified into the detailed NTM codes and respective HS product codes. The majority of measures in the database are SPS measures and TBTs. Globally, 41% of measures in the database are sanitary and phytosanitary measures (30% in the Asia Pacific region), and 40% are technical barriers to trade (48% in the AsiaPacific region). The third largest category, export-related measures, accounts for 9% of measures globally and 13% of measures in the Asia-Pacific region. In terms of individual economies, the largest stock of NTMs in Asia-Pacific is in China, followed by high-income economies of New Zealand, Republic of Korea and Australia (see Fig. 34.3).4 In general, the stock of NTMs relates to the level of development: more developed countries generally have stronger legislative frameworks. However, caution should be exercised when comparing the stock of measures across the countries. Although strong efforts are made to ensure cross-country comparability, the legal architecture of countries varies significantly, and the data collection process is complex (including because of translation).5

34.3 Non-tariff Measures and the Sustainable Development Goals The 2030 Agenda for Sustainable Development recognizes international trade as an engine for inclusive economic growth and poverty reduction, and an important enabler to achieve SDGs. Trade is strongly linked to the Goals related to health and safety, the environment and climate, public security, and peace. As such, broadly speaking, NTMs can directly contribute to sustainable development as policy instruments, or they can indirectly affect sustainable development through their impact on trade and investment. The analysis presented in the Asia-Pacific Trade and Investment Report 2019: Navigating Non-tariff Measures towards Sustainable Development shows that almost 3

UNCTAD’s TRAINS portal trains.unctad.org; World Integrated Trade Solution (WITS) platform at wits.worldbank.org; and ITC/UNCTAD/WTO’s Global Trade Helpdesk at www.globaltradehelp desk.org. 4 The number of NTMs does say anything about the trade restrictiveness of a country. For example, a country can have many measures that apply to single products or few measures applying to large product groups. Also, the restrictiveness of different measures cannot be compared. A labelling requirement is different from an import prohibition, for example. 5 UNCTAD (2018, UNCTAD TRAINS: THE GLOBAL DATABASE ON NON-TARIFF MEASURES) describes the database in detail and possibilities and limitations of comparing the data across countries.

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Fig. 34.3 NTMs in Asia–Pacific, by economy. Source UNCTAD TRAINS database, accessed May 2019

half of NTMs in Asia and the Pacific directly address SDGs. The highest share of SDG-related NTMs in the Asia-Pacific region and globally directly address Goal 3 (Good Health and Well-being) (see Fig. 34.4). NTMs that address this Goal include regulation of medicines, food safety, technical regulations on vehicle safety, and regulations on trade, and packaging of alcohol and tobacco products. NTMs that arise due to international agreements (such as the Montreal Protocol on Substances that Deplete the Ozone Layer) and address Goal 12 (Responsible Consumption and Production) are also prevalent, highlighting the need for international collaboration to achieve SDGs. In general, it also seems that the more NTMs are imposed by an economy, the lower the share of an economy’s NTMs addressing SDGs. As such, while China has many NTMs address SDGs (indeed more than any other economy in the world), following this trend, the overall share (as opposed to the absolute number) is relatively lower for most SDGs. While other Goals are addressed by relatively fewer NTMs, they are nonetheless important for sustainable development and a community with a shared future for mankind (see Fig. 34.5). However, the analysis indicates that some SDG targets remain unaddressed by trade regulations. For example, approximately only 10% of the economies in Asia and the Pacific have at least one NTM addressing illegal,

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Fig. 34.4 Distribution of NTMs that directly address SDGs, by Goal. Source ESCAP & UNCTAD calculations based on UNCTAD TRAINS database and methodology developed by ESCAP and UNCTAD (see Kravchenko and others (2019) for details)

unreported, and unregulated (IUU) fishing and the illegal timber trade. Indeed, China does not seem to have measures in place to address these two issues. As such, there seems to be more scope for member states in the region to address these aspects of sustainable development through trade measures.

Fig. 34.5 Distribution of NTMs that directly address SDGs, by Goal. Source ESCAP & UNCTAD calculations based on UNCTAD TRAINS database and methodology developed by ESCAP and UNCTAD (see Kravchenko and others (2019) for details). Note Scale for China is binary meaning that 100 shows that at least one measure exists to address the corresponding SDG target and 0 means none

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Many NTMs were found to have no direct linkages to SDGs. This is not to say that they lack public policy objectives. For example, while motor vehicle safety can be linked to reducing traffic accident fatalities, safety of consumer and commercial products cannot be directly linked to any SDG target. Many, if not most, NTMs affect a number of SDGs simultaneously. In some cases, well-intentioned NTM regulations addressing one dimension of sustainable development may inadvertently negatively and severely affect other dimensions. As such, detailed sustainability impact assessments at the country and sector levels are recommended in order to draw accurate conclusions for each new or existing NTM.

34.4 Impact of NTMs on Trade and Trade Costs While NTMs often serve legitimate and necessary purposes, they add costs to trade. It is estimated that the average combined cost of all NTMs for imports is 15.3% in Asia and the Pacific, whereas tariffs account only for 5.8%. In the agricultural and automotive sectors, the combined costs of NTMs are up to 20% for imports. While the United States and the European Union have more NTMs in place, costs related to NTMs are higher in Asia and the Pacific, suggesting that the design or the implementation of NTMs in the Asia-Pacific region is less efficient. The finding on the impact of trade facilitation on the level of “burdensomeness” of NTMs was confirmed by a synthesis of country-level International Trade Centre (ITC) private sector survey studies on NTMs in the Asia-Pacific region. Figure 34.6 shows the trade facilitation implementation rates and incidence of NTM burdensomeness. The plot indicates that the level of burdensome NTM incidence is inversely related with an increase in trade facilitation implementation levels, reinforcing the sentiment that greater trade facilitation implementation does indeed make it easier for countries to trade (i.e., traders encounter fewer “burdensome” NTMs when doing trade with economies that have higher levels of trade facilitation implementation). China has one of the region’s highest rates of trade facilitation implementation and, as expected, fewer has a lower “burdensomeness” score of NTMs. In addition, it was also reported that domestic procedural obstacles, rather than the required standards embedded in NTMs, are the primary reason why foreign and domestic NTMs are perceived to be burdensome. Such procedural obstacles are not NTMs themselves, but they exist because of NTMs. They include time constraints, informal or unusually high payments, lack of transparency, discriminatory behavior of government officials, and a lack of appropriate testing facilities. As such, policymakers wishing to promote exports need to address domestic procedural obstacles through trade facilitation as a priority—it also is easier than trying to change export partners’ trade regulations. Trade costs related to NTMs also increase with the divergence of measures in different countries, affecting small and medium-sized enterprises (SMEs), and smaller and lower income countries disproportionately. An analysis of the similarity of NTMs between economies suggests that regulations may be less harmonized

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Fig. 34.6 Trade facilitation implementation and NTM burdensomeness of 44 Asia- Pacific economies. Sources UN Global Survey on Trade Facilitation and Paperless Trade Implementation, 2017; ESCAP and ITC, 2019. Note “NTM burdensomeness” is calculated as the ratio between NTM incidence (by implementing economies) and export trade values in these economies in 2015

among the economies of the Asia-Pacific region than globally. China’s NTM regulation is quite different to that of other economies in Asia- Pacific, resulting in a high average regulatory distance score (0.22) (see Fig. 34.7). The Philippines follows closely, with average ratio of 0.20. Notably, the bilateral regulatory distance between the Philippines and China is the highest in the region (0.28), suggesting that considerable scope exists for harmonizing bilateral regulations and enhancing trade between the two countries.

Fig. 34.7 Average regulatory distance of Asia–Pacific economies with regional trade partners. Source ESCAP & UNCTAD calculations, based on UNCTAD TRAINS database

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Regulatory distance for measures that were identified as having a direct and positive impact on SDGs is slightly higher than for all measures. Most notable, however, the regulatory distance of SDG-related NTMs within Asia and the Pacific is significantly higher than the distance between that region and the European Union and the United States. Particular efforts may be needed to harmonize NTM regulations that support sustainable development in the Asia- Pacific region with those of major trade partners outside the region.

34.5 Policy Recommendations and Conclusion This paper noted that as the relative importance of traditional barriers to trade— tariffs—is on the decline, the number of new NTMs in the region and beyond is on the rise. It demonstrated that many NTMs have legitimate and important public policy objectives. At the same time, the trade cost of NTMs is more than double that of ordinary tariffs. As such, the key is to ensure that while public policy objectives and, further, Sustainable Development Goals are met and a community with a shared future for mankind is built, traders are not unnecessary burdened, and trade costs are minimized. Indeed, these are not inseparable goals. China’s economic miracle of lifting hundreds of millions beyond the poverty line has shown that trade, in itself, is a key means of implementation of the Sustainable Development Agenda. This paper concludes with a summary of policy recommendations that are elaborated on in the Asia- Pacific Trade and Investment Report 2019: Navigating Non-tariff Measures towards Sustainable Development. A significant share of trade costs stem from the fact that technical regulations (SPS and TBT) are often very different between countries. As such NTMs are necessary to protect health, safety, and the environment, they need to be coordinated or harmonized rather than eliminated. Research suggests that a similar level of protection of health, safety and the environment could be achieved at lower costs if regulations were more similar or mutually recognized. The use of international standards, a form of regulatory harmonization, is one way of overcoming challenges related to heterogeneity of regulations. International standards are considered scientifically justified and are accepted as the benchmarks against which national measures and regulations are evaluated. The key to maximizing benefits is to determine appropriate levels of protection and to reduce the cost of compliance and the divergence of legitimate NTMs. Both regional cooperation and domestic efforts are needed to reduce the burden associated with compliance with NTMs and to strengthen positive impacts. While most burdens may result from export partners’ NTMs, countries also have room for improving their own NTMs. A useful starting point for increasing net benefits from streamlining NTMs is through the review of existing NTMs to eliminate unnecessary ones and identify the ones that may need to be improved or updated. Newly proposed NTMs should be systematically subject to a regulatory impact assessment to ensure benefits of the new regulations outweigh the costs as much as possible.

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Complying with NTMs typically requires exchange of information between traders and trade control agencies, both within and across borders. Moving to webbased applications and exchange of information is expected to ultimately reduce trade costs by 25% on average in the region, generating savings for both governments and traders that could exceed $600 billion annually. Good progress has been made in trade facilitation implementation, particularly on WTO Trade Facilitation Agreement (TFA) measures, but there is scope to do more. In particular, the implementation of cross-border paperless trade remains very challenging and a Framework Agreement on Facilitation of Cross-border Paperless Trade in Asia and the Pacific could help. To maximize the sustainable benefits of NTMs, it will be important that trade facilitation measures and efforts benefit not only larger traders, but also groups and sectors that tend to be excluded or disadvantaged. The United Nations Global Survey on Digital and Sustainable Trade Facilitation 2019 has found that measures aimed at the food and agricultural sector are relatively well implemented, but that trade facilitation measures targeted at SMEs and women remain rare. At the same time, it should be noted that China is among the top performers in Digital and Sustainable Trade Facilitation implementation in the region (Fig. 34.8). NTMs are increasingly addressed through trade agreements, as indicated by the growth of provisions on NTMs in agreements signed in recent years. Most of the examined regional trade agreements (RTAs) contain TBT and SPS chapters. Government procurement provisions are less common, although there has been a noticeable increase in recent years. Provisions on risk analysis and taking emergency measures would support achievement of SDGs, particularly through their protection of human, plant, and animal life. Best practices on addressing NTMs through RTAs include: the use of international standards; technical assistance for less developed members; removal of duplicate measures; transparency; ensuring that technical regulations are binding; and ensuring that the application of regulations is carried out on a national treatment basis. Mutual recognition arrangements may lower the costs related to NTMs, even between countries that have no existing trade agreements. At the same time, deeper levels of regional integration often aim to streamline intraregional NTMs. For example, the ASEAN Economic Community Blueprint 2025 places reducing the cost of NTMs as its core component of trade facilitation strategy. In the case of the Eurasian Economic Union (EAEU), certain NTMs are shared across members, and the development of these SPS and TBT measures requires consensus by all EAEU member States; a dedicated online web portal and protocols exist to address conflicts related to measures deemed inconsistent with the EAEU Agreement by some members.

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Fig. 34.8 Digital and sustainable trade facilitation in Asia–Pacific, 2019. Source UN Global Survey on Digital and Sustainable Trade Facilitation, available at untfsurvey.org

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Appendix 34.1: Endnotes International Classification of Non-Tariff Measure (ICNTM) NTMs are policy measures other than ordinary customs tariffs that can potentially have an economic effect on international trade in goods, changing quantities traded, or prices or both (UNCTAD, 2012). In contrast with the rather succinct definition, the universe of NTMs exhibits an enormous diversity and complexity. As such, the Multi-Agency Support Team (MAST) has established the International Classification of Non-Tariff Measure (ICNTM). As shown in Table 34.1, NTMs are categorized via a hierarchical tree into 16 chapters from A to P. In accord with the definition, the classification only acknowledges the existence of an NTM, and does not prejudge on its legitimacy, adequacy, necessity, or whether or not it is discriminatory. NTMs are sometimes confounded with non-tariff barriers (NTBs). NTBs are the policies that induce an adverse impact on trade due to the specific discriminatory and protectionist intent. Unlike with NTMs, there is no widely accepted definition of NTBs. Whether an NTM is an NTB largely depends on the intent of the regulation. NTMs are primarily in place to serve public interest. Classifying an NTM as an NTB is a rather contentious issue since trade partners are likely to disagree on whether a particular NTM is discriminatory or has a protectionist intent. Strictly speaking, Table 34.1 Classification of NTMs in UNCTAD trade analysis and information system (TRAINS) Imports

Technical measures

Non-technical measures

Exports Source UNCTAD (2016).

A

Sanitary and phytosanitary measures

B

Technical barriers to trade

C

Pre-shipment inspection and other formalities

D

Contingent trade-protective measures

E

Non-automatic licensing, quotas, prohibitions and quantity-control measures other than for SPS or TBT

F

Price-control measures, including additional taxes and charges

G

Finance measures

H

Measures affecting competition

I

Trade-related investment measures

J

Distribution restrictions

K

Restrictions on post-sales services

L

Subsidies (excluding export subsidies under P7)

M

Government procurement restrictions

N

Intellectual property

O

Rules of origin

P

Export-related measures

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however, technical NTMs are de facto not NTBs unless they have been successfully challenged through the WTO dispute settlement process (lengthy and expensive). Nevertheless, it is generally seen that some technical NTMs are indeed discriminatory/more trade restrictive than necessary (i.e., they are NTBs), and are sometimes used by Governments as a trade policy. Non-technical NTMs are mostly NTBs.

Suggested Reading Bloomberg. (2018). China’s US$128 billion pork industry is under threat by a deadly, mysterious virus. Retrieved from South China Morning Post: http://www.scmp.com/business/commodities/ article/2164631/chinas-us128-billion-pork-industry-under-threat-deadly. Congressional Research Service. (2019). Farm Policy: USDA’s 2018 Trade Aid Package. Retrieved from https://fas.org/sgp/crs/misc/R45310.pdf. Economist. (2019, August 6). African swine fever threatens 200m pigs in China. Retrieved from The Economist: https://www.economist.com/graphic-detail/2019/08/06/african-swine-fever-thr eatens-200m-pigs-in-china. Emerson, M., & Kovziridze, T. (2016). Georgia and Europe: A short guide. Tbilisi: CEPS and Reformatics. Retrieved from http://aei.pitt.edu/80164/1/Georgia_pop_edition_FINAL.pdf. ESCAP & UNCTAD. (2019). Asia-Pacific Trade and Investment Report 2019: Navigating Non-tariff Measures towards Sustainable Development. Bangkok: United Nations Economic and Social Commission for Asia and the Pacific. European Commission. (2018). Food Trade Standards: How Georgia’s food safety standards are improving under the EU-Georgia Deep and Comprehensive Free Trade Area. Brussels: European Commission. Retrieved from https://eeas.europa.eu/sites/eeas/files/food_safety_georgia_en.pdf. FAO. (2019). ASF situation in Asia update. Retrieved from Food and Agriculture Organization of the United Nations: http://www.fao.org/ag/againfo/programmes/en/empres/ASF/situation_upd ate.html. Global Trade Alert. (2018, March). The GTA Handbook. Retrieved from Global Trade Alert—Data and Methodology: https://www.globaltradealert.org/data_extraction. Informbury.kz. (2018). MCX PK: Zappet Kypgyzctana vvozitb pticy iz dvyx pegionov Kazaxctana neppavomepen. Retrieved from https://informburo.kz/novosti/msh-rk-zapret-kyr gyzstana-vvozit-pticu-iz-dvuh-regionov-kazahstana-nepravomeren.html. Ji-hye, Shin. (2019, August 2). S. Korea to exclude Japan from trade whitelist in retaliation. Retrieved from The Korea Herald: http://www.koreaherald.com/view.php?ud=20190802000618. Kursiv.kz. (2018). Ppodyktovar vouna? Kazaxctan vvel zappet na vvoz mrca iz Kypgyzctana... Retrieved from https://kursiv.kz/news/vlast-i-biznes/2018-10/produktovayavoyna-kazakhstan-vvel-zapret-na-vvoz-myasa-iz-kyrgyzstana. METI. (2019). Update of METI’s licensing policies and procedures on exports of controlled items to the Republic of Korea. Tokyo: Ministry of Economy, Trade and Industry. Retrieved from https:// www.meti.go.jp/english/press/2019/0701_001.html. RaboBank. (2019, April). Rising African Swine Fever Losses to Lift All Protein Boats. Retrieved from RaboResearch: https://research.rabobank.com/far/en/sectors/animal-protein/rising-africanswine-fever-losses-to-lift-all-protein.html?qsl_reqcnt=1. Sputnik.kg. (2018). Poqemy Kazaxctan vvel zappet na kypgyzckoe mrco? Otvet glavnogo vetvpaqa KP. Retrieved from https://ru.sputnik.kg/economy/20181016/1041565601/kyrgyz stan-kazahstan-zapret-myaso.html. The White House. (2017). Presidential Executive Order on Buy American and Hire American. Washington: The White House. Retrieved from https://www.whitehouse.gov/presidential-actions/pre sidential-executive-order-buy-american-hire-american/. UNCTAD. (2012). International Classification of Non-tariff Measures. Geneva: UNCTAD.

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UNCTAD. (2016). Guidelines to Collect Data on Official Non- Tariff Measures. Retrieved from United Nations: http://unctad.org/en/PublicationsLibrary/ditctab2014d4_en.pdf. UNSD. (2012). International Classification of Non-Tariff Measures (ICNTM). Retrieved from https://unstats.un.org/unsd/classifications/Family/Detail/2015. USDA. (2019). USDA Announces Details of Support Package for Farmers. Washington: USDA. Retrieved from https://www.usda.gov/media/press-releases/2019/07/25/usda-announces-detailssupport-package-farmers. WTO. (2018a). Panels Established to Review US Steel and Aluminium Tariffs, countermeasures on US imports. Retrieved from https://www.wto.org/english/news_e/news18_e/dsb_19nov18_e. htm. WTO. (2018b). Understanding the WTO: The Agreements—Standards and Safety. Retrieved from https://www.wto.org/english/thewto_e/whatis_e/tif_e/agrm4_e.htm.

Chapter 35

The Community with a Shared Future for Mankind: New Interaction Between China and the World Rukhsana Qamber

Community responsibility to build individual strength is ancient Chinese philosophy that meshes smoothly with twenty-first century notions of governance, and others like ecological citizenship, that help to preserve humankind’s inextricably shared future. For me, this is what may be termed as “the Chinese way.” It is neither Stalinist communism nor is it runaway laissez-faire capitalism. It is good governance with focused goals. Understanding such basic principles often escapes persons who study China. My paper attempts to explore China’s own narratives within a general overview of the mushrooming plethora of China centers, Confucius Centers, and other academic institutions across the world. Conclusions indicate lacuna that could be filled by future interactions between think tanks under the Chinese Academy of Social Sciences (CASS) and other countries, especially Pakistan. Such community (read as humankind] responsibility between think tanks in effect creates a shared future for not only for states but also for institutions and individuals. The research covers key concepts for sharing, development of communities, and their future prospects. The paper briefly outlines the Chinese way established through ancient Confucian philosophy. It focuses on sharing. This is a linchpin for forming a community, including the shared community of humankind in the global village. It searches for methods to develop a harmonious and sustainable future for the global community. Data is primarily gleaned from websites and documents uploaded in English by Chinese think tanks but also utilizes information from whichever source is available. Once drafted, I will discuss my paper with Sinologists and Chinese acquaintances in Islamabad and present it in an in-house roundtable at the Institute of Regional Studies. After incorporating suggestions and critique, my findings will inform my presentation at the Chinese National Institute of Global Studies (NIGS)

R. Qamber (B) Institute of Regional Studies, Islamabad, Pakistan e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_35

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international conference “China’s 70-Year Development and the Construction of the Community with a Shared Future for Mankind.” To begin, one may safely state that humankind today forms a close-knit community even when it is spread across the continents. As never before, digital connectivity brings diverse people into close virtual contact. In this global village we cannot, and should not, live in cocoons without caring about our impact on the environment. Community responsibility is vital for the survival of humankind, our flora and fauna, and our planet as a whole. Responsibility, in ecological and other dimensions, rather than self-centered individualism or even single institutional working, is an ancient Confucian concept that, thus, needs to be revisited again and again. The concept of the community is integral to the idea of sharing. This in turn is embedded with notions of personal and governmental morality, correctness of social relationships, justice, and sincerity. Such Confucian ethics simultaneously values the key virtues of the self extrapolated to institutions, of sincerity and the unceasing search for knowledge. Among several others, three basic concepts are useful to examine the first part of topic “The Community with a Shared Future for Mankind: New Interaction between China and the World.” The concepts of the lˇı, yì and rén are difficult to understand out of the Chinese context. Each had ancient connotations that Confucius reinterpreted. In addition, he placed both concepts together to confabulate new and dynamic meanings that continue to hold valid as guiding principles for the future of individuals, institutions, and mankind in general. Though I cannot decipher Chinese texts, what I do understand is that Confucius makes us ponder the superiority of personal exemplification over explicit rules of behavior. Reading his texts, Confucius leads us, centuries later, to reflect on how we would respond in given circumstances that privilege the community over the self or matters important to the self.

35.1 lˇı (禮 禮) The concept of lˇı, or established ceremonies, predates Confucius. He redefines lˇı to include in it all of a person’s actions aimed at building an ideal society. Thus, the term does not simply describe how to conform to the canonical standards of ceremony. In Confucianism, ceremony is important not only to discipline the self but also, vitally, to transform society, to transform institutions or the global community of mankind. To Confucius’ followers, initially lˇı meant doing the proper thing at the proper time. Ethics informed the proper thing. This required a balance between tradition and modernity for collective progress. The ethical social fabric maintained and perpetuated existing norms whereas selectively violating these norms achieves ethical good. This requires rigorous training. Prior to Confucius, the lˇı emphasized virtues that encompassed ethical judgment about when lˇı must be adapted. Situational contexts were important but it required training to recognize contexts that required changing established ceremonies, or lˇı, for the betterment of the community of mankind. Lˇı has a close relationship with yì. In reality the two have to be taken together or else

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both lose their meaning in the labyrinth of changing times. These principles are as useful for individuals as they are for best practices in governing institutions.

35.2 yì (義 義) The concept of yì (義) is normally described as based upon different aspects of reciprocity. However, its meaning is both more complex and more simple. Reciprocity contains elements of righteousness and yì is also translated as righteousness, which is a nebulous idea. From these complex meanings one could deduce that yì simply means to do the right thing at the right time in a certain context. This is what would be ethically best to do and it is applicable also for managing institutions. To cite a mundane example, tea drinking is a custom that is the right thing to do at the right time, or lˇı. It is carried out in one’s community. However, if following the traditional ceremony of tea drinking is contextualized to a situation fraught with confrontation, the same ceremony offered to the opposing party would be a step towards peace. Taken a step further, the opposing party would be obliged to offer the same ceremony to the same participants, i.e., in reciprocity and righteousness. These would comprise two important and fundamental steps towards building lasting peace between the two parties that could be individuals or institutions, local communities, or the global community. For Confucius’ followers this term yì contrasts with action done out of selfinterest. While pursuing one’s own self-interest is not necessarily bad, one would be a better, more righteous person if one’s life were based upon following a path designed to enhance the greater good of the whole community. Thus, the outcome of lˇı, the right thing at the right time, is far more important than lˇı itself. Connected with yì, it means doing the right thing for the right reason, or what is ethically correct. Just as actions under lˇı should conform to the overarching greater good of yì, so yì is linked to the principles, or core value of rén. These may be viewed as methodologies or new interaction between China and world to bind mankind into a community with a shared future.

35.3 Rén (仁 仁) Rén consists of five principles, often described in the Confucian terminology of basic virtues. These are seriousness, generosity, sincerity, diligence, and kindness. Individuals who inculcate these guiding principles would intuitively and spontaneously fulfill lˇı, the right thing at the right time and yì, the right thing for the right reason. Rén brings in the supreme principle, or virtue, of fulfilling one’s responsibilities toward others as perfectly as humanly possible. This concept too has high value for the governance and management of institutions aimed at sustaining a shared future for mankind.

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Rén is usually translated as “benevolence” or “humaneness” or “Goodness” (with a capital G).1 Other translations include additional concepts such as “authoritativeness” and “selflessness.” These connotations of rén are in keeping with the ancient moral universe of the Chinese. Confucius rejected divine rules. He conceptualized mankind as a community that was close-knit being based on understanding and empathy for one another. Mankind is expected to internalize the five principles of rén to formulate a sustainable global community. Such internalization develops individual’s spontaneous reactions in accordance with rén. In turn, the spontaneous humaneness and Goodness of rén’s five principles. Rén’s five principles would knit individuals into a community that shared seriousness, generosity, sincerity, diligence, and kindness. These principles could guide action intuitively and are even better than living by the rules of yì, the right action for the right reason. The logic of Confucius is that virtue is a mean or median point between extremes. For example, to define the “properly” generous person: a person who gives the right amount, not too much and not too little. In short, Confucius set principle above individual judgment, in which transformational reform is attained by kind persuasion rather than through violent imposition. Rén or humanness, yì, the right thing for the right reason, and lˇı, the right thing at the right time, lay the foundations for China’s new interactions with the world by fostering mankind as a global community with a shared and sustainable future. We now jump from Confucius to the Chinese President Xi Jinping in the year 2019. He delivered a keynote speech at the opening ceremony of the Conference on Dialogue of Asian Civilizations in Beijing in which he called for efforts to jointly create a brighter future for the civilizations of Asia and the world. He stressed jointly building a community with a shared future for Asia and humanity. The Chinese President presented a four-point proposal to build what he aptly called the “cultural foundation” of a global community. The proposal is founded on quintessential Chinese principles of treating each other with respect and as equals; appreciating the beauty of all civilizations; adhering to openness, inclusiveness, mutual learning; and keeping pace with the times. In his own words, President’s Xi’s four points for the global community of mankind are the following. 1. Besides economic and technological strength, cultural strength is also needed for humanity to cope with common challenges and head toward a bright future. 2. We hope that all Asian countries will respect and trust each other, co-exist in harmony, expand cross-border, cross-time-and-space as well as cross- civilization exchanges, and jointly maintain the peaceful time that is more valuable than gold. 3. Civilizations will lose vitality if countries go back to isolation and cut themselves off from the rest of the world. 4. Exchanges and mutual learning among civilizations should be conducted in a reciprocal and equal manner and be diversified and multi-directional. The exchanges should neither be compulsory or forced, nor one-directional.2 1 2

Arthur Waley, translator (Wikipedia). Www.news.cn www.Xinhuanet.com Monday July 8, 2019.

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These four points express Confucius’ principles based on the overall concept of empathy. He mentions civilizations that are founded on traditions like the lˇı that emphasizes the ethically right thing, including ceremonies, at the right time. It includes yì which entails the right context that can only happen through respect and in the right context. President Xi’s final point alludes directly to rén or reciprocity that is most meaningful on the basis of equality and is not unilateral, forced, condescending but multi-dimensional in our post-colonial world. In recent years China has made strenuous effort to open up to the world at large. In the spirit of its ancient principles, it has encouraged its citizens to study abroad and then return home. It has reached out to the world in the physical sense with massive trade and aid programs and infrastructural development like the brilliant and grand Belt and Road Initiative (BRI) and China-Pakistan Economic Corridor (CPEC). It has founded numerous institutions that exist in the rest of the world but has molded them in the Chinese way. These institutions include think tanks and today there are a plethora of Chinese think tanks. Most fall under the overall umbrella of the longstanding and highly respected Chinese Academy of Social Sciences (CASS). CASS itself has reached out to the world since long. Its divisions examine and specialize in the various regions of the world. It has institutional linkages with the leading think tanks, academic institutions, and academics in these regions. Furthermore, its affiliated institutions across China further connect with the world community of academia. In the larger sense these think tanks with their global linkages form a community of thinking mankind whose raison d’être is to conceptualize a better linked and shared future for mankind. Through CASS and its affiliates, China has interacted with the world by, in the first place, adhering to its basic texts and conversations in the Chinese language and in the second place in the primary languages of the targeted regions. CASS personnel and academics at its affiliate institutes in the various Chinese regions and universities are also well versed in the Chinese narratives on given subjects. They project these narratives in their interactions with the outside world and dignify them with harmony of discourse. This creates empathy with foreign academics. Outside interlocutors are thus facilitated to present their points of view in a two-way exchange on the basis of equal footing, operationalizing the overarching concept of rén (仁). To bring such institutions closer, it would be worthwhile to exchange information on their respective methods of governing and managing these think tanks. Chinese and international researchers have long been cooperating under the Confucian principles mentioned above. For instance, Chinese research teams have taken up the Chinese concept of a strong role of the state to protect the environment. From this has evolved the concept of environmental citizenship that is being studied in order to improve the green GDP calculation system by changing over from “high-speed” to “high-quality” growth under the guidance of President Xi Jinping.3 The concept has further developed another way to examine the problem through

3

Frank Tang, “Can China Realise Xi Jinping’s Vision for a Green Measure of Sustainable Growth?” South China Morning Post, 23.12.2017.

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an increased role of civil society that goes beyond state and individual responsibility, i.e., ecological citizenship.4 What could be achieved in the future is greater collaboration for a shared future for mankind is to expand this cooperation into the field of governance, especially governance of academic institutions, beginning with governance of research think tanks. Good governance is in the limelight this year as it marks the 70th anniversary of the founding of the People’s Republic of China. Over the past 70 years, China has explored a unique development path and governance model. The international community can learn from this model by applying it to research think tanks and also sharing their own experience with the Chinese in order to develop free, fair, and time-tested governance best practices. Overall the Chinese governance model for its national politics has been a system that is democracy at the bottom, experimentation in the middle, and meritocracy at the top.5 The results are spectacular: Premier Deng Xiaoping proved his merit by experimenting with opening up China to foreign trade and investment by implementing free-market reforms in 1978 and by 2014 his country had experienced an unprecedented growth and won the title of the second largest economy with GDP growth averaged nearly 10 per cent over a span of more than a decade. At the bottom, democracy in the Chinese way has shown the advantages of consistent policies in a one party system. The success of these models is manifested in China’s capability to bring out millions of its people from poverty and development in all other aspects that landed China into a powerful position. China has become the global engine of growth. Its expanding economic partnership in the world has also given it political leverage in global affairs. The Chinese development path and governance presents an alternative model to the Western democratic system. The Chinese model of governance, unlike the Western democratic process, follows merit in the selection of the leader. It shows that there could be another system with successful outcomes other than the Western democracy. The world can learn from the democracy at the grassroots level and socialist formula for the equal development of all regions in China. China’s central government focuses more on the least developed provinces. The surplus resources of the developed provinces are diverted to the development of the poor provinces. This is the bedrock for not only success but also sustained success of the Chinese system to take along towards a shared future the less advantaged sections of its communities and their individuals. This method is in keeping with Confucian principles flourishing under the overall concept of empathy, founded on traditions like the lˇı, the ethically right thing at the right time; yì, the right context that can only happen through respect in the right context, and rén, reciprocity on the basis of equality for all Chinese. Put together, these notions may also be expressed as:

4 5

Melo-Escrihuela (2018). Daniel A. Bell, The China Model.

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A single flower does not make spring, while one hundred flowers in full blossom bring spring to the garden.6

These concepts are winning hearts across the world. China, with its distinct governance and development model, has shown the world an alternative path to prosperity. Nevertheless, achieving a peaceful and prosperous future for the whole of mankind is still only a dream. This dream may become reality in the near future if China also leads the way to overcome negative propaganda against its policies and actions, both domestic and international. On the domestic front, China could initiate administrative reforms in the regions where human rights issues are negatively highlighted in American and European media. This media has enormous impact as its reports are usually published without screening or critique in the rest of the world. International think tanks are ideal to suggest ways and means to counter such wrong perceptions and they could also perform the task of becoming informed educators for the Chinese point of view. Furthermore, international research think tanks could suggest practical methods for softening the Chinese approach against extremism in regions such as Xinjiang. For instance, by taking the local communities into confidence. This would effectively counter the negative propaganda against its governance system. Pakistani think tanks are located ideally to lend China a hand in this regard. These think tanks could also assist China to remove growing negative propaganda against its government and its flagship project BRI by addressing head-on mumbles about the Humbantota Port collaboration with Sri Lanka.7 In order to avoid such misunderstanding, think tanks collaborating with China falling under its international exchange programmes would educate the world about its history, culture, political workings, and institutional systems. China’s governance and management of research think tanks clearly shows a healthy and close relationship with its political governance hierarchy.8 This is either sorely lacking or under-utilized in other parts of the world, such as Pakistan. China’s best practices for think tanks could inform the world, and China itself, to formulate and implement economic policies and to efficaciously interact in the global governance system to fulfill the goal of a global community for a shared future of mankind.

Suggested Reading Abi-Habib, Maria. “How China Got Sri Lanka to Cough Up A Port,” The New York Times, June 25, 2018. CASS website, accessed on October 10, 2019.

6

Xi Jinping, The Governance of China, Beijing: State Council Information Office, Party Literature Research Office and China International Publishing Group, two volumes, 2014 and 2017. 7 Abi-Habib (2018). 8 CASS (2019).

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Melo-Escrihuela, Carme. “Promoting Ecological Citizenship: Rights, Duties and Political Agency,” ACME: An International e-Journal for Critical Geographies, 7(2), 113–134, ACME Editorial Collective, 2018. Miller, James, “China Must Talk to its Religious Leaders to Create a Culture of Ecological Sustainability, Blog, September 25, 2009. Qin Yaqin, “Culture and Global Thought: Chinese International Theory in the Making,” Revista CIDOB d’Afers internacionals, No. 10, pp. 67–89. Rachman, Gideon, “China, India and the rise of the ‘civilisation state,’” Financial Times, March 4, 2019. Singh, Swaran, “Hits and misses of Xi’s ‘civilizational dialogue,’” Asia Times, May 15, 2019. Tang, Frank, “Can China realise Xi Jinping’s vision for a green measure of sustainable growth?” South China Morning Post, December 23, 2017. Wee, Teo Cheng, “China Renews ‘Green GDP’ Initiative,” Environmental Protection website, April 13, 2015. Xi Jinping. The Governance of China. (Beijing: State Council Information Office, Party Literature Research Office and China International Publishing Group, two volumes), 2014 and 2017. Xinhua Net, available at www.news.cn, July 8, 2019.

Chapter 36

Our History and National Experiences Must Be the Foundation of Efforts to “Constructing a Shared Future for Mankind” Vasudevan Swaminathan Gounden

36.1 Introduction In the context of a paper aimed at contributing to a discussion on the “construction of a community with a shared future for mankind” it is fitting to draw wisdom from one of Africa’s foremost revolutionaries, Amilcar Cabral. Speaking at a Tricontinental Conference in 1966, Cabral made the following telling observation: It is useful to recall in this Tricontinental gathering, so rich in experience and example, that however great the similarity between our various cases and however identical our enemies, national liberation and social revolution are not exportable commodities; they are, and increasingly so every day, the outcome of local and national elaboration, more or less influenced by external factors (be they favourable or unfavourable) but essentially determined and formed by the historical reality of each people, and carried to success by the overcoming or correct solution of the internal contradictions between the various categories characterising this reality.

Although written in a different context, the above quotation is relevant to a discussion about the 70 years of the evolving relationship between the People’s Republic of China (PRC) and the rest of the world in general, but Africa in particular. It is useful because there appear to be two dominant and popular narratives when it comes to what the PRC has achieved, as measured against the rest of the world and Africa in particular. On the one hand, there is a tendency to uncritically accept and bind the history of developments within the PRC as synonymous to those of Africa and other continents outside the West. On the other hand, there is a narrative that assumes, a priori, that the path traversed by the PRC can possibly be “exportable” to other countries of the South, and African countries in particular, in order to achieve their development. V. S. Gounden (B) African Center for the Constructive Resolution of Disputes, Mount Edgecombe, South Africa e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_36

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Such narratives, however, ignore two realities. First, they ignore the specific historical moments and developments that propelled the PRC forward, while holding back many other countries of the South. Second, they also overlook a concrete reality that any ideology and programme aimed at advancing human progress has to be informed by, guided by, and responsive to the prevailing conditions and needs of that particular society. The latter view, which is linked to Cabral’s assessment, is confirmed in the following words by President Xi Jinping about the centrality of being alive to your own national conditions: Over the past 70 years, under the strong leadership of the Communist Party of China (CPC), the Chinese people, with great courage and relentless exploration, have successfully opened the path of socialism with Chinese characteristics. Along this path, we have ushered in a new era.

Collective efforts between the PRC and its partners to construct a shared future for mankind will not bear the desired results if they do not cater for the particularities and objective realities that have confronted, and continue to confront, some of the countries within the African continent. This argument is not advanced in order to advocate for “African exceptionalism” as far as the challenges confronting humanity are concerned. However, it is intended to state four indisputable facts. First, by and large and for the longest time, not all the commitments made to support Africa’s development have been fully realized. Second, socio-economic transformation in most African countries occurs at a pace that causes them to lag behind other continents when it comes to human progress and development. Third, even with African agency,1 it would arguably take the same number of years we are rightly celebrating, if not more, before the continent finds itself on equal footing with the PRC, and therefore able to engage as equal partners. Fourth, the bulk of the resources required to steer the world into the future are in Africa.2 And paradoxically, it is in this continent where global citizens have to double their efforts in order to create the conditions necessary for a shared future. This paper argues, inter alia, that on the occasion of commemorating the 70th anniversary of China’s development, it is important to take a fresh and new look at the developments within, those related to, and those external to Africa, in order to contextualize how some of the developments in Africa could either prevent or accelerate a forward march towards the genuine construction of a “shared future for mankind.” The paper posits that in confronting the reality facing the continent, a dialogue of openness, a spirit of co-operation, and the willingness to engage Africa fairly, is an important constitutive element for building a “community with a shared future for Mankind.”

1

African agency, defined as Africa taking charge of its own development efforts refers to such initiatives as the transformation of the New Partnership for Africa’s Development (NEPAD) into the African Union Development Agency (AUDA); it also includes current efforts to reform the functioning and structure of the AU; as well as the creation of a Free Trade Area in Africa. 2 These include vast and variety of natural resources; arable land for agriculture and agribusiness, a large young population compared to other continents affected by ageism.

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36.2 Engaging with “New” States in Africa An inescapable fact is that various peoples and countries of the world, by virtue of history and their geo-strategic locations, have experienced global dynamics and developments differently. This is nowhere more applicable and relevant than in some African countries. Seventy years ago, the majority of African countries were still under colonial rule. Indeed, at the time, struggles for independence were being waged across the continent and there was still no free, sovereign, and independent state within the continent capable of determining for itself how to conduct its affairs. Juxtapose this fact with where the PRC was during the same period and the reality of two different contexts and experiences emerge. The 70th Anniversary that this conference is commemorating is symbolic in that it seeks to reflect and showcase the path that an independent, organised, and orderly state has traversed in order to reach all its achievements that are admired today. Between the period from 1949 to about late 1970s, the PRC embarked on a clearly crafted strategy to achieve two outcomes. One: the consolidation of the state of China, with the CPC at the helm. Two: articulating an independent national economic reform processes, steeped in the conditions prevailing inside the country at that time. In contrast, during the same period, most African countries were still grappling with the politics of attempting to transform the state apparatus that was inherited from the colonial period. Linked to that, as much as the internal dynamics differed from one country to another, a common feature for most of the African countries during this period was that they were still grappling with internal civil strife, contested political power, and later coups and counter-coups. This fact alone meant that for a period of at least 20 years, other countries (including China) were able to craft and begin to assert their national agendas on a number of crucial issues pertaining to development, while some countries in Africa, in most parts, were more “reactive” and constrained by the prevailing challenges of the day. During the same period mentioned above, “weak” as most African States were, the bonds of fraternity with the PRC were solidified in small acts such as the support of 26 newly independent African States for the PRC’s admission in 1971 as a permanent member of the United Nations Security Council (UNSC).3 In turn, China was one of the strong supporters of African independence movements and gave aid to newly independent African nations in the 1960s and 1970s. Among the most notable early projects was the 1,860 km TAZARA Railway, linking Zambia and Tanzania, which China helped to finance and build from 1970 to 1975 (Brautigam, 2010). Conversely, during these early decades (since 1949) it also remains an undeniable fact that relations between Africa and the rest of the world, including with the PRC, was that of unequal partners. In this context, the PRC is, and must be, commended for providing support to a number of African forces that fought for liberation.4 This 3

See for instance, Africa-China Factsheet, https://www.saiia.org.za/wp-content/uploads/2015/02/ China-Africa-Factsheet.pdf. 4 See for instance, Alden, C. & Alves, C., 2008, “History & Identity in the Construction of China’s Africa Policy,” Review of African Political Economy, No. 115: 43–58.

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support should be constitutive of the core ingredients that must continue to inform the transformation of relations between Africa and China.

36.3 The 1980s: The Era of Reforms It was during the reform era (i.e., in the early 1980s) that China gradually emerged into the mainstream international system. This included joining a number of key international economic organizations, such as the International Monetary Fund (IMF) and the World Bank, as well as beginning to negotiate its membership in the then General Agreement on Tariffs and Trade (GATT). In addition to reconnecting with the international economic system, China’s open- door5 policy also led it to rejoin the broader international community.6 Various studies argue that it was around this time that China showed signs of gradually accepting the prevailing international rules and norms in a number of issue areas (Wang & Rosneau, 2009). Conversely, for most countries in the South, and Africa in particular, this period was marked by engagements with the international economic order on terms that were not entirely favorable to them, and which occurred at a pace that they were not able to fully determine. Such international interventions like the Structural Adjustment Programmes (SAPs) further eroded the role of the state (which was weak in any case) and also contributed a great deal to the debt burden that most of these countries were faced with. Again, this is an illustration of how the interactions between some countries in Africa with the global institutions had an immediate negative effect on their ability to meaningfully plan and tackle their socio-economic development challenges. In this regard, in terms of international relations, a distinctive feature between the PRC and other countries of the South is that the former was able to “control” its gradual engagements with the system, while the latter were thrust into accepting most of the prescripts of the system. Thus, the CPC started to enact reforms, guided by an understanding of its own national interests, which transformed China’s posture towards international order. For instance, in the 1980s China steadily increased its interactions with the international system, especially in the economic realm. However, even as China actively sought to ‘embrace’ the global system, it continued to adopt positions in favor of a New International Economic Order, which had been set forth by, for example, the Group of 77 with calls for a more equitable and just global order.

5

But this has been an open-door policy with a difference, in that the PRC, unlike other countries, has retained strong domestic control over key production and marketing processes against the background of a strong work ethic and diligence which are key to national investment and growth. 6 Speech by Xi Jinping At the Reception in Celebration of the 70th Anniversary of The Founding of the People’s Republic of China, 30 September 2019.

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36.4 “Navigating” the Fog of a New Relationship Since the 1990s China emboldened its efforts to fully embrace the international order, and this “new” posture manifested in major changes in the country’s foreign policy.7 However, these signs would have been difficult to contemplate a decade or two earlier, as they represented a significant shift on the part of the Chinese government towards identifying itself with the existing international system. Additionally, they were certainly as a result of consensus within Chinese policy circles that in the age of globalization, China had no choice but to integrate itself with the rest of the world in order to modernize, and that participation in the global economic system would largely advance its national interests. During this period, however, most African countries have found themselves being responsive to the pressures to democratize and accept what were then regarded as internationally agreed principles of multi-party democracy and all the related freedoms. As these changes were being thrust upon some of these countries, a series of intra-state conflicts and civil wars also began, which affected the capability of most countries to engage with the changing global order on their own accord. Here emerges another distinctive feature in terms of how China continued to determine its own space and pace in global politics: While most countries of the South had to grapple with a myriad of internal challenges, including the emergence of a new political leadership, the PRC managed to maintain its national cohesion while embracing, and emerging as an active participant in, the international system. Any conversation about “a shared future for mankind” ought to take cognizance of the objective reality and the condition of the majority of African countries, which include: . The efforts to transform and address the root causes of many structural challenges (including conflicts) will take anything between 20 and 40 years . Africa is in a race against time in order to reach the levels of development similar to countries such as China, and this race is worsened by the speed with which the 4th industrial revolution is occurring . The cohesion and stability of most states is weakened as social conflicts emerge and spread at local and national levels. For reasons partly related to the context and summary painted above, the sum total of the challenges confronting Africa, some of which may relate with other continents, include: . Limited opportunities to create jobs that are sustainable . The rise of both inequality within nations and absolute poverty within and across different nations, which has an impact on global stability

7

For example, China signed and ratified the United Nations human rights covenants, and the Kyoto Protocol on climate change. The Chinese government also made costly commitments to gain membership in the World Trade Organization (WTO).

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. Failure to transform national economies so that they do not retain the same structure over many decades. This objective reality is, of course, outweighed by Africa’s potential, reflected in, among other things: . By 2030 about 40 African countries will be producers of oil and gas, which are among the key resources required to drive the 4th industrial revolution . While consumer spending on the continent sat at US$680 billion in 2013, it is expected to rise to US$2.2 trillion by 2030 . 60% of the world’s uncultivated arable land is in Africa8 ; with 23% of land area being forest . Africa’s young population (under 18) will reach the 1 billion mark by 2050.

36.5 Building Blocks for a Structured Engagement “Towards a Shared Future”? The idea and indeed the political strategy for a shared future for humankind is not something completely unique to the PRC as guided by its international relations pillars. It is indeed as old as the same number of years that are being celebrated during this conference. The earliest intervention that spoke of a shared future which also brought China and the peoples of Africa together was in 1955 in Bandung.9 The celebrated Bandung Declaration offered hopes that the countries of Asia and Africa would be able to transform their relations to be that of equals, and then use their united voice to contribute to a “better world.” The successes of this bond were mostly expressed in the sphere of global politics, where countries of Asia, with China at the helm, provided support to the many countries in Africa fighting for independence. Furthermore, in the case of China, such structured engagements as the Forum on China–Africa Cooperation (FOCAC) established in October 2000, as well as Brazil, Russia, India, China, and South Africa (BRICS) point to opportunities to build towards a better and shared future. In this context, two of the five principles that guide the PRC’s foreign policy10 namely, “equality and co-operation for mutual 8

There are several commendable efforts currently underway, including those of the PRC to offer and deploy highly skilled experts on agriculture in Africa, which would contribute to employment creation and food security. Additional requirements in this regard includes transforming and modernizing the agricultural sector in Africa, as well as ensuring fair access to other markets for African produce. 9 See for instance, Final Communique of the Asian-African Conference of Bandung, available at: http://franke.uchicago.edu/Final_Communique_Bandung_1955.pdf. 10 For more on the PRC’s Five Principles, please see, Panda, A, “Reflecting on China’s Five Principles, 60 Years Later, Sixty years what are China’s ‘five principles’ worth?,” The Diplomat, June 26, 2014, available at: https://thediplomat.com/2014/06/reflecting-on-chinas-five-principles-60-yearslater/.

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benefits” and “peaceful coexistence,” must be at the centre of building a “shared future.” Accordingly, drawing lessons from China, we proffer the following as critical in creating that shared future for mankind. . Consolidating the Central Role of the State: – Building strong and socially cohesive states: These are states that are capable of identifying their national priorities and put out programmes and strategies to see to their realisation. In this regard, the relations between the PRC and Africa cannot eschew the importance of mutual co-operation towards consolidating socially cohesive states. – Building national infrastructures so that governments can properly manage their internal contradictions: The social compact that exists in the PRC may indeed not be “exportable.” However, the lessons from it are crucial for other countries. Efforts that seek to build bridges among different sectors in society are crucial so as to strengthen the foundation for the creation of such a shared future. More and more, there is a need for many countries to consolidate their efforts towards stability at sub-national (local) levels, as China did. Here, the existing “China-Africa Cooperative Partnership for Peace”11 could be further explored as one of the bases for mutual co-operation to advance stability in some of the African countries. . Global Peaceful Coexistence: – Concrete and complete transformation of the Global Institutions of Governance: A shared future cannot be realized while the global institutions of power remain in the state they are in, reflecting the historical balance of forces immediately after the second world war. The current structured relations between China and its other partners (especially in Africa) must be used to complete the call made in Bandung in 1955. . Dialogue across Generational and Civilisations: A shared future for mankind cannot be formed on the basis of one or two dominant cultures and ideologies. Instead, it should emerge out of a series of interactions among different actors so as to arrive at a consensus that does not privilege one culture, at the expense of another. The challenges faced by humanity today are as a result of the entrenchment of one civilisation over all others, and this can only be solved if space is opened up for deep and ongoing conversations across various sectors and stakeholders. . Co-operation for Mutual Benefits: – Transfer of skills, expertise and technological advancements: Countries with the necessary know-how and expertise, such as China, have made efforts to support developing nations to make advancements in the area of technology. 11

See for instance, SAIIA: Opinion & Analysis, FOCAC’s Present and its South African Future, available at: https://saiia.org.za/research/focacs-present-and-its-south-african-future/.

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The current structure of relations can only contribute to a shared future if efforts are made to bring most of the countries of the world on par in terms of the much needed investments in technological infrastructure thus enabling them to partake meaningfully in the 4th Industrial Revolution. – Alleviate global poverty and inequality: The current structured relations between China and other countries (Africa in particular) must seek to address the problem of trade deficits and concentrate on strengthening initiatives that will result in equitable partnerships among nations.

36.6 Conclusion This paper has contextualized the evolution of the PRC’s international relations with the African continent in particular. It has pointed out that while the PRC has remained one of the strongest partners for Africa, such a partnership still needs to be strengthened. The paper also reflected on the importance of this partnership working towards addressing some of the pressing challenges confronting Africa as the basis for constructing “a shared future for mankind.” The central argument of the paper is that a “shared future for mankind” cannot be constructed on the basis of uneven economic partnerships, unequal political power dynamics, and without dealing with such issues as poverty and unemployment, among other issues. Lastly, the construction of strong, socially cohesive states, as the PRC has successfully accomplished, is an important foundation for constructive dialogue on a “shared future for mankind.”

Chapter 37

Soft Skills Development for Trust as the Next Frontier in the Construction of the Community with a Shared Future for Mankind Ole Doering

論語 : 子貢問政。子曰。足食、足兵、民信之矣。 子貢曰。必不得已而去、於斯三者何先 曰。去兵。子貢曰。必不得已而去、於斯二者何 先 曰。去食。自古皆有死。民無信不立。 [Lunyu 12.7:] Zi Gong asked about governance. The Master said, „Allow for enough food, enough armor and the people are confident.” Zi Gong said, „Suppose there is one that you cannot keep, which of these three would be let go of first?” The Master said, „Let go of armor.” Zi Gong said „Suppose there is one that you cannot keep, which of these two would be let go of first?” The Master said, „Let go of the food. Always, everyone faces death. But when the people are without confidence there is no base to stand on.”

37.1 The Foundation of Trust Confidence enables, precedes, and sustains all. This ancient gem from Chinese political philosophy brings to mind a timeless and universal social rule. Common sense is the foundation of social affairs. Politics organize the means to align the diversity of individual and communal aspirations towards common wealth. Trust in the legitimacy of governance transcends the individual focus, allowing it to depart from any individual’s immediate needs in order to transform the abstract credit of authority, to generate the prospect and form required for maintaining an institutional framework that allows all to benefit from each, materially and immaterially, over time. O. Doering (B) Institute for Global Health Berlin, Berlin, China e-mail: [email protected] Comparative Cultural Studies, Hunan Normal University, Changsha, China © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_37

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The first provision is subsistence, catering for the basic needs of the human species; the second provision is security, from domestic and foreign disturbance of the regular performance of within social system. Both depend on the confidence, that, with time and effort, society will be able to offer greater value than communal or individual ventures ever can on their own. An organized division of labor requires credible and efficient regulations so that civilization may develop effectively. Thus, accomplished confidence, trust becomes the most vital asset for human flourishing. This prospect comes with one condition. It requires a whole, robust, and wealthy state that can afford the mentioned provisions, by allowing people to transform expectations into confidence and inspire loyal citizenship. In the context of our globalized 21st century, security is becoming a trans-domestic affair for mankind, since we have realized that the world is one and interconnected. We don’t need protection from anything but internal transgressions of humanity. The stage for learning properly how to survive, sustainably and with dignity, now realistically contains limited space, resources, and options. The perception of open horizons for unlimited opportunities has grown stale. The only formula that can be applied for humanity has a sustainable win-win structure. We depend on the best, from the largest diversity of ingenuity and industry, just to manage the problems humanity has brought upon itself, in view of climate, ecology, security, health, and justice issues. This is a situation not foreseen by the ancients, in their fresh and generous employment of reason. Therefore, what could be seen as a valid strategy for cultivation, three millennia ago, is now a baseline for human survival. Trust in government must be earned according to the aptitude of governance to implement such a bold, enabling, considerate, deliberate, creative, and just strategy, as an open course of learning and adapting while advancing in best practice. Meanwhile, China has achieved a state of self-reliance, independent subsistence, a creative and vibrant society, a powerful science and education system, a competitive economy, and has taken on more and more international responsibilities. According to the standards introduced above, this is the right time to enlarge confidence and build trust, domestically and internationally.

37.2 China’s Way The role of responsible Chinese governance is even more important in consideration of the relative weakness and decline of other nations that used to dominate global affairs over the past two centuries. This is not so much about the national states of economic, political, or moral power and performance, but about being ready and prepared to learn for the future. Especially the now floundering leading powers of the 20th century find it hard to invent their new positions for a truly globalized world order that is defined according to standards of multilateral global governance and true partnership. Often, concepts, perceptions and strategies remain stuck within the past. This is not just an opportunity but rather a huge problem for China, as a culture set on learning, from and together with others. For China as a nation, the first 30

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years of opening and reform were inspired by methods for development and system building perceived of as rationales for generating strength and resilience according to international but mostly foreign standards. Although China has devised many ways to adapt, acquire, implant and transform the relevant ways and skills to mobilize and harvest value, to own them in order to proceed with China’s path of self-strengthening, these standards must be understood in their own right, as pragmatic and provisional. They do not necessarily represent or enable the best from all cultures to flourish in an orchestrated manner but rather served to execute the dominant interests of their time. For example, the related critical debates in Europe from the 1960s to 1980s regarding the overwhelming unilateral monoculture that defined the administration of standards for scientific quality assessment, for international regulatory affairs, for property rights, for economic transactions, for convertible certifications of education and qualification, and more, include many lessons to be learned. They bear ingredients for short term success and carry deep problems regarding sustainability and fairness. They do not hold the recipe for a shared future of mankind. These lessons are about both the history of power struggles within the “West” that inhibited development of justice and value and about the matter of the ways to govern collaboratively for shared benefit. Regarding the quality of this unexplored matter, it promises common ground in safeguarding the basic meaning of social and immaterial goods and cultures that appreciate value beyond commercial definitions. According to the “China and the World in the New Era White Paper” issued by the State Council in September 2019, the present situation can be described as follows: China has found a development path suited to its actual conditions. In particular, “China’s development lies in self-reliance and hard work”. Thus, China’s economic strength has increased substantially and Chinese people’s lives and China’s international position and influence have improved. All based on the understanding that China cannot achieve prosperity by asking for assistance and waiting, but that hard work is the only option. Even though much is still left to be desired, every witness of the past 40 years will affirm these remarkable achievements. However, without pouring any water into this commendation, the most important work still has to be done, to make success dependable for the future. The agenda is much more ambitious, because, ultimately, it is not about security and food but trust. “A prosperous and beautiful world is the common aspiration of all peoples.” This aspiration bears the challenging task to reframe the great goals, from measurements of quantifiable material progress into cultural and teleological narratives that offer meaning without frustration, sense without indoctrination, wealth without injustice, health without indignity, and diversity without discord. It requires the orchestration of a diversity of pathways for an aligned future multi-centric cohabitation. It is easy to issue invitations to join, but much more difficult to do this while setting the table rules in a non-exclusive prescriptive manner when no one is there to serve as host. Learning by doing without a formal conductor requires a methodology for purposeful and open development. This is feasible only on the basis of some, at least prudential and provisional, trust.

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37.3 The Rules of the Game The White Paper rightly states that this procedural progress is a task for all nations, for all of humanity. It requires carefully orchestrated steps towards bold ends, with mutual learning among civilizations, with international relations under a new model that allows all countries to observe the rules, nourish confidence, and maintain welfare. Considering their power, major countries are an important force for safeguarding world peace and stability, and key actors in building a new model of international relations. Yet, some may find it difficult to understand what it means to exercise this power on the principles of mutual respect, equity and justice, and mutually beneficial cooperation, without paternalism or double standards. On the other hand, emerging or dysfunctional states, economies or societies deserve the opportunity to determine their development in terms of their people’s dignity. Reason demands that such support will be granted responsibly, avoiding temptations to take advantage. Here is a dilemma: countries that are rich in soft skills relevant for peaceful management of share of labor and sustainable generation of value, such as Germany at the heart of European diversity, have been poorly prepared to reflect and convey the cultural methodology underlying their historical success, as a matrix for cultural engineering, so that they could readily inspire global visions for the benefit of all. Europe is still stuck in the ideological mind-frames of the 20th century that derive their self-esteem from the Enlightenment, from Economic and Social Reforms, that took shape by the end of the 19th century, under diverse political regimes quite different from those to follow, under the label of “democratic nations.” Leaders of countries such as Germany are still taking for granted that certain political systems can guarantee superiority. They tend to underrate the foundational factor of dedicated work, to transform real social, economic, and political accomplishments in the context of shared global responsibility. China would not feel the need to re-invent the wheel but could focus on adapting the suitable soft-technology to its needs for the 21st century, had the dialogue of civilizations been taken more seriously than proclaimed “clashes.” It is most unfortunate that the opportunity for true mutual learning has not been seized properly, since Xu Guangqi (徐光启) and Matteo Ricci (利瑪竇) first met and worked together in the 17th century, for mutual benefit on all levels. The exemplary misinterpretation of the root causes of relative Western strength in the late 19th century by Chinese intellectuals such as Hu Shi (胡適) or Yan Fu ( 嚴復) under the impression of the trauma from an Empire lost, and from Western sources such as John Dewey should not be succeeded by another episode of failed communication and interaction. A collaborative approach will engage processes of deliberate introductions and mutual learning that may not fail this time. Comprehensive, transcultural soft skill development is overdue, not only in order to address the issues at hand, but more fundamentally, to create better ways to communicate and work together, spelling out the margins of trust. We cannot simply proceed by ignoring the obstacles and opportunities at hand, in terms of language, culture,

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and outlook. For example, in the translation of normative political key terminologies, we still refer to the educational material and dictionaries from the 20th century. Those translations and their presentation do not account for the remarkable progress science has made in the areas of translation studies, hermeneutics, and philosophy of language. “False friends” or “mistaken enemies” cause great misunderstanding and unnecessary conflict. Many if not most Germans still believe that “Chinese has no grammar,” and “the Chinese adhere to entirely different/incompatible moral standards.” It is also held widely, that China is ruled by a “authoritarian dictatorship” that many associate with the regimes of Stalin or Hitler. While common sense rejects such stereotyped and often uninformed notions, it would help if international studies were to present us with robust theories to explain why these flaws are systemic and if more empirical evidence could be gathered through reflected and ethically concerned research, to explore the moral commonalities and real differences among the people in our countries. Over the course of the past 40 years, there has been remarkably little attention to such matters, comparably speaking. In China, because German science and culture was hardly accessible without mediation, in Germany because of domestic shortcomings. Notably, not even one single university chair for Chinese Philosophy exists in Germany, while the prestigious Humboldt University of Berlin, for example, just installed four new professorships for Islamic Theology. With our worlds growing together under on global horizon, there is no escape, neither into esoteric or superiority dreams nor behind physical walls. This new world should be embraced, explored, and developed as a chance for all, to grow in terms of cultivation. As Mahatma Gandhi once famously remarked, “The world has enough for everyone’s need, but not enough for everyone’s greed.” This implies a transmaterialistic attitude to values and realistic attitudes to the sharing of labor. This is the new challenge and frontier in the Construction of a Global Community with a Shared Future for Mankind. Again, trust is the first asset.

37.4 Common Challenges: The Example of Science Governance Finally, not only is the work towards a new world order in this sense reasonable in order to rebuild confidence, it is also plain that the safeguards and quality assurance measures of the established order have just begun to show how it could fail, in vital areas of science and technology. For over four decades “Bioethics” (生命伦 理学) has defined the narrative space for reflections on normative issues related to the life sciences. As a profession, bioethicists have become part of the institutional framework of science governance across the world, to serve analytical and advisory purposes for a broad range of stakeholders (the state, business, social groups). As a discipline, it has developed a curriculum that is detached from the humanities (especially philosophy and history), social sciences (anthropology) and medicine.

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Although most nations and scientific communities, including, albeit with some reservations, China, have contributed and adhere to some of the bioethical standards, Bioethics cannot claim to be in the lead of conceptual inspiration and innovation for the benefit of science and society. In continental European countries, bioethics still competes with different formations, such as medical ethics, research ethics, technology assessment and applied philosophy, or moral discourse. Owing to its original historical and cultural focus on problems concerning the USA, several methodological, theoretical, and organizational issues have emerged that indicate the limitations of this framework and institution, to address the depth, diversity and fluidity of transdisciplinary and cross-cultural topics and themes that it brings up. Most recently, the scandal of Dr. He Jiankui, a biophysicist trained in China and the USA under the highest scientific standards who with entrepreneurial zeal ignored global moral consensus, ethical process and Chinese law when he applied a premature geneticengineering technology (CRISPR) in treating two human embryos in Shenzhen, to show his cutting edge capabilities, illustrates how genuinely new answers for global governance are urgently needed. The scandal is not an accident but an expression of the rationales underlying the organization and regulation of international science. Structurally, the problem is rooted in the gradual loss of integrity and self-governance of science since the 1950s and its mutilation as an instrument for economic and other non-epistemic purposes. Chinese scientists were the first to publicly condemn the deeds of He and his international associates. When truth is to be taken from the facts, science is our best hope to make things right. Trust in the integrity of science can only be regained when the underlying structures and incentives that allow such violations to happen on a systemic scale (though not often in such a drastic fashion) are understood and overcome. Such as, ontological, methodological, and disciplinary standards are based on reductionist assumptions that cannot represent the state of a trans-disciplinarily contextualized and holistically framed approaches to sciences dedicated to biology and health. Debates over the validity of basic scientific quality criteria (DORA, Slow Science, WCRI) should be trans-disciplinary and impact on the curriculum of life scientists. We need a better understanding of how to break up the silos of disciplines and stakeholders that have become the standard of international science, in violation of the holistic origins of science. It is time to overcome introspective reductionist narratives and mobilize a unified scientific discourse, to address social needs and theoretical consistency. In a historical perspective, this would mean to rehabilitate a classical understanding of science, as a holistic systemic approach of integrated knowledge and wisdom, that is known methodologically in German under the Humboldtean name of “Wissenschaft” and in China under the Great Learning’s program, to “investigate things in order to extend knowledge” (格物致知). This will make science more powerful and credible for the future. Yet it requires “unlearning” erroneous concepts that have reigned for several decades based on power rather than sound reasoning.

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37.5 All that Remains Innovative approaches from the grounds of best available learning include the means to reclaim trust and responsibility of science, as a source of leadership, integrity, and foresight, to feed into a sustainable value base for society across national borders. To this end, ethics for responsibility offers a methodology of exploration and argument, strictly within the bounds of human, trans- cultural reason. This is a true alternative to the predominant moral disputes over being right about good and bad. When we confide in reason and open-minded collaboration, the answer lies in more and better understanding instead of claiming to own the truth unilaterally. Ultimately, all that matters is that the people trust in their base and governance serves to consolidate such confidence: 民信立而已. The rest is a good life’s hard work.

Chapter 38

China, Israel, and the Community of Shared Future Barukh Binah

Writing about China and Israel brings back pleasant memories. Nearly twenty-eight years ago I stood by the side of Israel’s foreign minister David Levy as he affixed the traditional Jewish symbol of abode, the Mezuzah, on the doorjamb of the newly established embassy of Israel in Beijing. It was a humble and temporary office, but we all knew that a more permanent one, befitting a home for the new embassy, would soon be built. All of us on the Israeli delegation realized that this was the culmination of a very long journey. It should be stated, though, that despite my official position at the time, the following words are entirely my own thoughts and reflections and do not represent any official Israeli position. The beginning was murky. Until the nineteenth century, there was not much contact between Jews and China. Indeed, both civilizations are very old and have inspired humankind in many fields for over three millennia, but they did not have direct contact or a real mutual exchange. Following the destruction of the Second Temple of Jerusalem and the Jewish state by the Roman Empire in the year 70 AD, Jews were scattered all over the world. Consequently, their footprint can be found in the Arab and Islamic world, in Eastern and Western Europe, in the Americas and in Asia, but hardly at all in China. There is some evidence of Jewish traders who, in medieval times, availed themselves of the ancient Silk Road, but there was only a meagre Jewish diaspora or a self-sustaining Jewish community in China.1 Most notably was the community of the Kaifeng Jews, a small community in the province of Hunan. Though they all but disappeared by the 1850s, memories of them linger

1

Moshe Yegar, The Long Journey to Asia (Haifa, 2004) [in Hebrew], p. 18.

B. Binah (B) The Israel Institute for Regional Foreign Policies, Ramat Gan, Israel e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_38

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on and their old synagogue, which was built in1163, still exists and is even depicted in the Diaspora House at the Tel Aviv University campus.2 During the nineteenth century Jewish traders, mainly from India, Persia, and Iraq but also from European countries began arriving in the Chinese eastern coast. Jews were welcome in China and in 1903, a Baghdadi Jew by the name of Nissim Ezra established “the Zionist Association of Shanghai.” Apparently, there were no locally originated anti-Semitic outbursts. The few events that did take place in Harbin and in Shanghai, were instigated either by the Czarist Russian Empire or, later, by the Japanese.3 Following the Russian revolution, many Russian Jews found refuge in Harbin, creating a community of some 25,000 people with schools, medical establishments, and various community organizations. However, after the Japanese occupation of Harbin in 1931, the community began to dwindle and most of its members left for foreign countries. By 1949, the Harbin Jewish community had practically ceased to exist.4 Throughout the hard years prior to the Second World War and especially during the Holocaust, China provided shelter for Jewish refugees from Germany, Austria, and the entire German-occupied Europe. These refugees numbered some 33,000 people, topping the old Baghdadi Jewish community of some 6000 Jews.5 Indeed, Israelis (and Jews in general) well remember that China offered some refuge for Jews who, at that time, where hunted and persecuted in Europe and in the Middle East. Politically, in the first fifty years of the twentieth century, Jews all over the globe were striving to recreate their national, independent state, and had thus focused their main efforts on Western powers, such as the United Kingdom and later the United States. However, once the People’s Republic of China came into being in 1949, the newly established State of Israel was very quick in recognizing the new Chinese government as the legitimate one. On 9 January 1950, Israel’s first foreign minister, Moshe Sharett, informed his Chinese counterpart, Zhou Enlai, in a customary diplomatic message, of Israel’s recognition of China’s new government. Zhou Enlai

2

See picture at: https://www.google.com/search?q=kaifeng+synagogue+beit&rlz=1C1GGRV_e nIL751IL751&sxsrf=ACYBGNTAGH9hBOf05MzT0pdZ0xHiK7rdZw:1570623062475&sou rce=lnms&tbm=isch&sa=X&ved=0ahUKEwjo2Nvtko_lAhVLZ1AKHcjcAr4Q_AUIEigB&biw= 1366&bih=584#imgrc=JeTTJW40qGoxnM. 3 Yegar, ibid., pp. 17–19. 4 Aron Shai, “China and Israel. Equivocal Ties: Jews, Chinese, Jerusalem,” Beijing (Tel Aviv, 2016) [in Hebrew], pp. 24–28. 5 Shai, ibid. pp. 28–36.

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answered courteously6 and Israel became the sixth nation to recognize the New China, following Burma (today’s Myanmar), Ceylon (today’s Sri Lanka), Pakistan, the United Kingdom and Norway.7 Nevertheless, despite readily recognizing each other, the two countries did not establish full diplomatic relations for many years to come. Israel’s founding Prime Minister, David Ben Gurion, reflecting in his later years on his early foreign policy, stated emphatically that “the Chinese are an essential and very important key for the peace of the entire world”8 and the two countries tried, on several occasions, to establish at least good economic relations. However, on the political level relations remained stiff and cold. Looking back, it seems that they were not able to cross their lines of proximity or commitment to the Arab world (China) or to the West and the United States (Israel). Thus, notwithstanding the good initial beginning, the mutual relations steadily deteriorated. It was not until the mid-1980’s that Israel and China could have begun their slow and careful tango towards each other. Israel based its new approach on the understanding of China’s international political and economic magnitude and role. China, on the other hand, began to realize the benefits of closer ties, in the times of a post American-Soviet confrontation, with an up-and-coming innovative and scientifically advanced small economy and of the fruits this move could bear. Especially given the nascent but on- going regional peace process that came in the wake of the brazen but failed Iraqi invasion of Kuwait. Being aware of the Anglo-Chinese agreement of 1984, to return the British crown colony of Hong Kong to China by 1997, Israel opened a consulate general in that city, with a view to promote mutual contacts with Beijing once the colony moved back to Chinese sovereignty. The Hong Kong consulate general became a dynamic factor in promoting Sino-Israeli relations. It had initiated academic exchanges between institutions of higher education, mutual participation in scientific conferences, trading contacts between various companies, and introducing many new Israeli technologies into China. This atmosphere of cooperation brought about numerous exchanges in many fields, including defense, and a crisis between the two countries over the Israeli built Falcon system, which Israel later aborted. However, that disappointment may have ushered in two decades of significant and vibrant economic and technological cooperation. Today, in the framework of the “Innovative Comprehensive Partnership,” Israel and China enjoy an elaborate system of G2G (Government-to-Government) mechanisms, allowing for various agreements and arrangements to flourish. Israel, “the Start-Up nation,” is a member in an elite club of advanced small economies (together with Singapore, New Zealand, Ireland, Finland, Denmark, and Switzerland). Denmark, for example, opened its first Innovation Center in Tel Aviv more than two years ago. In fact, Israeli technologies are now available in all realms of life and in many countries, including China. Chinese President Xi Jinping expressed this 6

E. Zev Sufott, A China Diary, London, 1979, p. vii. “Peking and Jerusalem” [in Hebrew] in Davar, 2/11/1979. 8 Moshe Gilboa, “David Ben Gurion and his Attitude towards the Third World and China,” International Issues: Society & State vol. 47 (1986) [in Hebrew], p. 82. 7

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realization following his meeting with Israel’s Prime Minister Netanyahu in March 2019. The China Daily quoted him as saying the following: “Israel is a worldrenowned innovative country, and at the same time, China is also pushing forward innovation-driven development, so innovation has become the common focus of our two countries. It is also the priority for our cooperation.”9 Israeli High Tech innovations, like the disk on key, the advanced mobile phone, or the Intel chip can be found everywhere. Citing just a few examples or cooperation with China, one could think of agriculture, where Israeli methods of intensive agriculture were part of the vision of the five “Israeli farms” in China. These farms were created with the idea of jointly developing methods of securing Food Safety. Israeli companies, such as Netafim, introduced to China the system of drip irrigation, which saves a lot of water. Being a nearly—Sahel country, Israel is acutely aware of the scarcity of water in a drying world and had developed water desalination and system that now provides some eighty percent of the country’s water consumption. In medicine, Israeli technologies such as laser operations or the intestinal pillcamera, which allows doctors to examine a patient without the need of a penetrating procedure of colonoscopy. This ground-breaking technology is now available worldwide. Israeli doctors and emergency responders had many opportunities to improve their methods and are willing to share their expertise abroad. Thus, Israeli companies now provide emergency equipment and materiel to the Ruijin Hospital in Shanghai. In culture, Israelis are intrigued by the richness of China’s history and culture as can be seen in their welcoming of the Confucius Institute in the Tel Aviv University. On the other end, the world-renowned Israel Philharmonic Orchestra performed in China and so did the Bath-Sheba Ballet Ensemble. Chinese publishing houses have published translations of many Israeli writers, such as David Grossman, Etgar Keret, Meir Shalev and above all Amos Oz, who has twenty-three of his novels translated into Chinese. China even pronounced 2012 “the Amos Oz year.”10 In general, most Israelis view China favorably11 and Israel as a nation is among the top five in positive attitudes towards China.12 However, getting to better know each other means more P2P (People-to-People) relationships, or tourism. In fact, there are some thirty weekly flights now between Ben Gurion airport near Tel Aviv and various destinations in China, mostly flown by Chinese carriers. More than 100,000 Israelis explore China annually and we expect some 200,000 Chinese travelers to visit Israel by the end of 2019.

9

An Baijie, “Xi: Innovation is Common Focus,” China Daily, March 22, 2017, http://chinadaily. com.cn/china/2017-03/22/content_28633164.htm. Quoted by Haggai Shagrir, “Israel-China Relations—A Comprehensive Partnership in Innovation” [in Hebrew] memo № 185 of Israel National Security Studies, Tel Aviv December 2018. See at: https://www.inss.org.il/he/wp-content/uploads/ sites/2/2018/12/memo185_China.pdf. 10 Yaniv Magal, “Looking at China: the Israeli Book Industry Attempts to Reach the Chinese Market,” [in Hebrew] in Globes, Israel Economic Daily, 20 October 2014, at https://www.globes. co.il/news/article.aspx?did=1000979264. 11 https://www.pewresearch.org/global/2018/10/01/international-publics-divided-on-china/. 12 https://chinapower.csis.org/global-views/.

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On the higher education level, Israel and China have gone a long way. The Israel Scientific Fund (ISF) and the National Natural Science Foundation of China (NNSF) had introduced a joint program worth tens of millions of dollars and have already sponsored over 130 joint research programs in basic science. China and Israel have also established a forum of the seven leading universities of each nation and created a joint program of awarding hundreds of scholarships to students. Israeli universities have developed mutual relationships with various Chinese universities. Most notably, the Technion of Haifa, one of the ten leading technological universities worldwide, opened in 2017 the Guangdong Technion Israel Institute of Technology, in association with Shantou University. On the Chinese end of the relationship, the Chinese interest in Israel, its culture, and the opportunities it can provide was exemplified by the deep curiosity of Chinese visitors in the Israeli pavilion in the World Expo of 2010 in Shanghai. Over three million visitors visited the Israeli Pavilion during the six-month duration of the exhibition.13 China now considers Israel as a member of the Twenty-first Century Maritime Silk Road and, subsequently, many Chinese companies are active in advanced projects in Israel. For example, the amazing Mt. Carmel Tunnels, which go below the city of Haifa and shorten travel time to the Israeli north, were built by a partnership of Chinese and Israeli companies, and so are the Metropolitan Tel Aviv Light Train and the extension of the Jerusalem Light Train. In addition, some 6000 Chinese construction workers now help building much needed housing projects all over Israel. In 2014, Israel had joined, as a founding member, the Chinese initiated and run “Asian Infrastructure Investment Bank.” The chart below shows that, while in 1992 the mutual trade between the two countries was less than $50 mn, by 2006, it reached $4.5 bn,14 and in 2018, the mutual trade had peaked at over $15 bn, Israeli exports concentrating on electronics and agricultural technologies. In recent years, China has become Israel’s second largest trading partner, and both countries currently explore the feasibility of having a Free Trade Agreement, hoping to conclude the discussion favorably in 2020. This economic growth is also reflected in a diplomatic one. From a single consulate general in a British colony on the Chinese coast, Israel now has representations in five major Chinese cities. Besides the embassy in Beijing, which is one of the largest embassies Israel has, there are consulates general in Shanghai, Chengdu, Guangzhou, and Hong Kong. In fact, there are more Israeli diplomatic missions only in the United States. As China emerges into a leading world power, Israel follows the noble Chinese idea of building a Community of Shared Future and the ensuing pre-condition it

13

Yaffa Ben-Ari (editor), Israel Pavilion World EXPO 2010 Shanghai China (printed in China, 2014). 14 Israel’s Central Bureau of Statistics, quoted in Yoram Evron, “A Retrospective view of ChineseIsraeli Relations: Obstacles, Successes and Potential Directions,” in Iyunim Bitekumat Israel (Studies of the Israeli Revival) [in Hebrew], vol. 18 (2008), pp. 237–264.

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requires of Middle East governance15 as well as president Xi Jinping’s ensuing Belt and Road Initiative. The very first principle of the shared future initiative, namely, “not to do to others what you would not like done to yourself,” sounds like one of Judaism’s most important decrees. Our sages told us of a gentile who once approached Hillel the elder, a leading Torah thinker and interpreter in the first century B.C., asking him to teach him the entire Torah “on one foot” (instantly). To this, Hillel the elder answered simply: “What is hateful to you, do not do to your neighbor; that is the entire Torah, the rest is just commentary, now go and study.”16 The shared future initiative is therefore neither strange nor alien to Israel and to Israelis. Trusting that every project included in this daring initiative would be conducted according to internationally accepted norms and standards, it seems like a very good idea that could constructively build infrastructures and promote stability. Like China, Israel supports global and regional stability. In that spirit and based on the friendship and cooperation between China and Israel, Israel welcomes a balanced approach in the Middle East. In his address to the Arab League Headquarters in Cairo on 21 January 2016, China’s president Xi Jinping17 expressed many positions that could be welcome to Israel, including that “China firmly supports the Middle East peace process” and is in favor of “putting in place a new mechanism to promote peace on the Middle East question.” Like President Xi Jinping, Israel knows that the Middle East is a “land of abundance” that should benefit from “dialogue and development” and a political settlement. Bringing back governance to the Middle East requires more than just addressing the Palestinian issue. As President Xi Jinping referred to in his aforementioned speech, “the current state of affairs in Syria [is] unsustainable,” as well as the need to assist the people of Syria, Jordan, Lebanon, Libya, and Yemen.18 All these conflicts are homegrown and have nothing to do with the Palestinian issue or with Israel. If there is a single common denominator to the various local conflicts in various corners of the Middle East, it is terrorism. Whether committed by Hamas, Islamic Jihad, ISIS, and al-Qaeda or instigated by Iran as a tool to promote Teheran’s aspirations of hegemony in the Fertile Crescent, Terrorism is the main source of regional instability. Any desire to bring about governance in the Middle East in order to facilitate a global Community of Shared Future could do no better than to address terrorism. We should remember the need to stand up to terrorism as we rise tall in promoting economy, development, and peaceful political contacts among people and nations.

15

https://www.tandfonline.com/doi/pdf/10.1080/25765949.2017.12023314?needAccess=true. Shabbat 31a:6, https://www.sefaria.org.il/sheets/222?embed=1. 17 https://www.chinadaily.com.cn/world/2016xivisitmiddleeast/2016-01/22/content_23191229. htm. 18 President Xi Jinping, ibid. 16

Chapter 39

Building a Community with a Shared Future for Mankind Arian Starova

I would like to begin my address by sharing with you my feelings of gratitude to the organizers of this event in China who made it possible for me to come back in China after some previous visits, the latest one being just two years ago. Having been several times in China over a period of about twenty years, I have personal experience of its rapid overall development. In particular, I consider it an honor to have been given the opportunity to express some modest ideas on China’s miraculous development. I think of this opportunity as an encouraging stimulus to think and rethink the Chinese experience and learn from it.

39.1 China’s Great Success for the Chinese People As a university professor of social sciences, I think there is no need to focus very much on the big facts of Chinese development which might be quite easily taken for granted because of their widespread popularity. It would suffice saying that, in just 70 years, China managed to change itself into the world’s second largest economic superpower by maintaining the pace of a rapid growth and having a large impact on reduction of poverty and improvement of people’s general living standards. What deserves to be pondered about China has been put very wisely by Bert Hoffman, the Director of the World Bank for China, who has said that “more and more countries see China as an example to emulate, a model of development that could mean moving from rags to riches within a generation.” Also, according to the

A. Starova (B) Albanian Institute for International Studies, Tirana, Albania e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_39

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World Bank, this was “the fastest sustained expansion by a major economy in history that lifted more than 800 million people out of poverty.” In a White Paper dated September 27, this year, under the title “China and the World in the New Era,” on the occasion of the China’s 70th anniversary, one can read that “China has completed a course that took developed countries several hundred years in just a few decades,” and this is quite significantly true. In this way, China will remain a great success story of our time, especially of the recent decades. Above all, the general view of the Chinese development has clearly showed that it has been always focused on the well-being of low-income peoples. Going beyond various kinds of ideas on the Chinese development and its natural flaws, the improvement of the Chinese life standards seems clear from the point of view of both economic and human aspects. The rate of literacy in China is above 96%. According to the German researcher, Agne Blazyte, in 2019, “the Chinese education system is the largest state-run education system in the world. The Compulsory Education Law of China stipulates nine years of government funded compulsory school attendance… After graduating from junior high school, students choose between senior high school and vocational school. Senior high school students also have to choose between a social-science and a natural-science orientation.” A social researcher may very easily find the traces of this contemporary high interest in education by the Chinese state administration far back in the history of China. By combining these simple data on education with about 55% Internet penetration, transport facilities for the peoples’ movements, mobile smart phones, social networking of peoples, etc. one can imagine what a boost is this peoples’ status for their general human development. In the long run, the exceptional overall development of China has been aiming at the people’s standard of life and has been carried out by the recently invigorated Chinese people in their mental and physical life.

39.2 China as a Future Global Superpower Aiming at a Shared Future for Mankind Major country successes like that of China can’t fail to further project themselves in the world’s affairs. This has come about not only due to the progress of globalism but also due to the expansion of the various demands of an economy and policymaking of a very large country like China of nowadays. In the 19th Communist Party Congress, President Xi Jinping declared that China would return as a state-center of the world and that, by 2035, China will “become a country whose comprehensive national power and international influence will be at the forefront.”

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There might be discussed many specific articulated aspects of this strategic goal of China, but I would like to accentuate the principal core of this projection of China as a global power on the world affairs. Very briefly speaking, this strategic goal of China constitutes an invitation to all the other states of the world for a new international behavior mainly motivated by a “shared future of the mankind.” It is really a great goal, despite the difficulties of its realization. For China, opening up, inclusiveness, and win–win cooperation among countries are the only ways to meet the present challenges of a global world. Building a community with a shared future for the mankind offers a new option to the international community. However, even the great ideas behind the League of Nations, the forerunner of the today’s UN, proved to be very difficult to implement in their time. Eventually, it is so important that global powers like China promote great ideas for future generations. In the above-mentioned White Paper of last September, it is said that “China cannot develop in isolation from the rest of the world, nor can the world as a whole maintain peace, development, prosperity and stability without China”. By making efforts to move forward guided by this great idea, China has kept its door always open for cooperation with other countries and has also offered its big assets such as trade facilities, financial resources in form of investments, experience, knowledge and know-how, experts, etc. for the economic development of other countries. China has also been offering expertise for economic management reforms and support for the other developing countries, such as in Africa. Fully aware that environmental pollution and climate change are important as serious side effects of developing global economies, China has made progress in also dealing with environmental pollution and reduction of the economic effects on the global climate. This policy is another dimension of China’s special attention to a shared future for the mankind. In a recent study published in the Science Advances journal, conducted by an international team of researchers, including Chen Deliang, a professor of physical meteorology at the University of Gothenburg and a Coordinating Lead Author of the UN Intergovernmental Panel on Climate Change (IPCC), one may read what Professor Chen has said, that “Our research shows that increased environmental awareness and investments in China over the past decade have produced results.” I would like to say that, eventually, China’s proposal to build a community of a shared future for mankind can be considered an important contribution to bringing all the countries together to meet global challenges and ensure a sustainable global development. A very concrete example of the efforts of China in building up a community with a shared future for the mankind is the well-known “Belt and Road Initiative,” launched in 2013. However, this initiative is even more serious than it looks now, as China has put together an ambitious plan to develop a wide belt of road, rail, and sea routes across 152 countries to be completed by the year 2049 and supported by a budget of more than 900 billion USD.

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39.3 China’s Miraculous Success is Rooted in the Expansion of the Free Will of People Talking about China’s recent giant development and modernization, one can’t help thinking, perusing various pieces of information, and trying to draw conclusions about the whys of this stunning phenomenon. In another case, a couple of years ago, I only mentioned the Chinese wise leadership and the talented Chinese people as factors in China’s development. When we read what President Xi Jinping said in the 19th Party Congress (October 2017) that “We will foster a culture of innovation, and strengthen the creation, protection, and application of intellectual property … should cultivate a large number of world-class scientists and technologists in strategically important fields, scientific and technological leaders, and young scientists and engineers, as well as highperforming innovation teams,” of course, one can easily presume the decisive role of the leadership is evident. However, today, I would like to share with you some more of those specific factors of China’s development. In my country, Albania, we have an old expression more or less saying that “It’s better to master knowledge than to possess wealth.” With this in mind, I will rank some of my essential factors of the recent Chinese boom of development. First, I think, China’s centuries-old experience of state governance is a key factor in boosting the recent developments and more specifically, the old tradition of Chinese dynasties being opened up to talented youngsters from the common families all over China. This has been a tradition which lasts to our days. Second, the mentality and morality of the Chinese people largely based on the compatibility of Buddhism with leadership from the CPC. Both these different types of leadership converge at one point, meaning that every individual can become a valuable human being during his or her life by combining intellectual capabilities with high values of morality what results in that human wisdom so badly needed by all the societies and for all the times. Third, accurate rule of law, especially in the implementation of anti-corruption laws as it is an eternal major disease of almost any governance. Fourth, opening up policies and inviting talents from all over the world. Fifth, continuous rise of the people’s standard of life, based upon a keen interest in improving the quality of life of the citizens. Sixth, piecemeal enlargement of freedom as an example of the various ways of how freedom can work in different countries and under different conditions. Seventh, expansion of the freedom of people’s movement inside China though specific legal facilitations. Eighth, continuous promotion of a policy that encourages the exchange of thoughts between the government and non-government bodies. Ninth, the incessant reforms in all areas of society. All of these factors might encourage discussion and even debates, but the debate on the stunning development of China is already there and this only adds to that.

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Some authors argue that the experience of China proves that “authoritarian political systems are not only legitimate, but can outperform Western democracies” (Richard McGregor, The Wall Street Journal). I would put it differently. To my knowledge and opinion, from the development of China in these recent decades, a very important lesson can be drawn saying that “The development of societies is always based upon freedom, but the way it works is very much dependent on the countries’ conditions.”

39.4 A Powerful China that Bears More Responsibility for International Security In our time, international security has become a very precious value. The map of threats and risks and the related conflicts has been enlarged all over the world. And unpredictability has also become a feature of international security. As a global power, China can offer a lot in this area. and it is continuing to modernize its military so that becomes a great power capable of fighting successfully in the future wars. By the middle of this century, China’s military is expected to be one of the world’s best militaries. And the growing military capabilities of China will increasingly result in a greater role in international security affairs. In the meantime, China has increased its international presence by being more engaged in UN peacekeeping operations, or very recently, cooperating in medical training with Germany, a NATO member and on NATO territory. These and other facts bear witness that China has the good will to engage in international cooperation for peace and international security. It is high time for this good will to turn into taking over more responsibility for international security. Under these circumstances, NATO as a very successful political and military alliance for international security has recognized the reality of China’s military and is more closely considering cooperation with it. In July 2019, Helena Legarda, analyst at Mercator Institute for China Studies (MERICS) in Berlin and Meia Nouwens, research fellow at the International Institute for Strategic Studies (IISS) in London, expressed publicly their opinions on this possible cooperation for international security. I believe that such cooperation is likely to begin soon as it is to the benefit of our shared future.

39.5 Facing Challenges as China Moves Forward China’s leaders are very much focused and determined to retain and continue the present rate of achievements in the future years. However, the bigger development is, the tougher the challenges.

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Many experts are mentioning various challenges such as environmental pollution, population aging, the impact of climate change, persisting corruption, societal polarization, slowdowns of economic growth, unemployment, external factors like financial crises and military conflicts which influence China’s markets, domestic people’s contradictions of interests, the necessity for introduction of intellectual property laws, dependence on foreign sources of energy and raw materials, etc. Without wishing to make predictions, I think that, considering that at the core of China’s success there was the expansion of the free will of the people, then, going the same way in the following years will guarantee future success of the country. I am confident that when the one hundredth anniversary of the People’s Republic of China comes, China will be a global power fully engaged in the world’s affairs and a principal state-actor for the peace, security and prosperity of our civilizations. Thank you for your attention!

Chapter 40

Building a Community with a Shared Future for Mankind: Is There a Blueprint? Plamen Ilarionov Pantev

40.1 Introduction 70 years ago, Bulgaria and the People’s Republic of China (PRC) established diplomatic relations. As a small country we are proud to be among the first that recognized the new great state and to have a record of long and constructive relations throughout this period. Despite the differences in the socio-political systems the bilateral relations of our countries are at its peak. The PRC is a key partner of both Bulgaria and the European Union (EU), to which my country belongs. I am personally grateful to the organizers of the high-level symposium for this first visit of mine to understand the sagacity of a Chinese proverb, I paraphrase, it is better to see something once than read about it one hundred times. China proved and this is a lesson for all, that direct copying of experience and models of development of other countries may lead to nowhere. A methodological lesson in statecraft given by China from the end of the 70s of the last century till nowadays is that thinking big and holistically while recognizing the truth in the facts of life, opening to the rest of the world and persistently reforming in a strategically chosen direction, is the right way to success. The ability to take the best from the experience and wisdom of the past, sincerely seeking to share the achievements of mankind is a Chinese accomplishment that deserves to be studied by present and future politicians, including in my part of the world.

P. I. Pantev (B) Institute for Security and International Studies, Sofia, Bulgaria e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_40

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40.2 What Kind of World and Major Dependencies for Mankind? Mankind is a single and comprehensive system that encompasses various states and nations. Each state and nation depends on its own efforts for development, but the system effect means reliance on the relations and the exchange with the other countries. What is the state of the international relations system today? First, we live in a world characterized by its single economic space. This is obvious despite the efforts to blame globalization for the deficiencies in individual countries, no matter how strong they are. Unfortunately, we are far from turning the world into a single social-economic space, in which every individual would be guaranteed a decent and normal existence. Second, the world has always existed as a single ecological space. The retarded realization of this simple fact has created one of the most dangerous situations for humankind: the present climate changes, accompanied by inadequate activity to cope with them. Third, our world is for decades already a single information space. The opportunities of developing a real community for human beings have become incomparably greater compared to earlier historic and technological periods. At the same time the temptation to take the most from the electromagnetic field and cyberspace, conceived as a special geopolitical sphere for egoistic national consumption, has dramatically changed the perspectives of security threats and dangers to the worse. Fourth, thanks to human progress, economic, technological, and social development, the world has become a single humanitarian space. Though different states share different visions and approaches to guaranteeing the whole spectrum of human rights to each individual by prioritizing some at the expense of others for the time being, there is no doubt, the world is more humanistic today compared to earlier periods of history. The drive to individual dignity and freedom balanced with the responsibilities to the respective national societies and states is a significant feature of the present world. Fifth, the world has been for a century a single military-strategic space. The ability to defend, from a more pacific and futuristic perspective, could be also interpreted as a constantly developing human ability to destroy, including self-extermination. However, living with this sober reality requires preventing taking wrong decisions that would deprive us from future. These five characteristics of the present world constitute a constructive prerequisite for gradually turning human beings into a single planetary civilization, deserving and able to extend its creative and peaceful capacity beyond the Earth. This is how I conceive the construction of a community with a shared future for mankind. This is a future that deserves to be provided to our children and grandchildren. However, this future is impossible without the adequate leadership of the present global great powers, one of which is a superpower and another one has the potential of becoming in the next two or three decades a superpower too. Reaching this goal depends on these global actors: the United States of America (USA), the PRC, the

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EU, the Russian Federation, and, potentially, India, Japan, Indonesia, and Brazil. Each of the leading four global actors has its own concepts and vectors, with the specific magnitude and direction, in the complex parallelogram of forces trying to deal with the persisting needs of survival of mankind, its progressive evolution and the formation of the future global civilization. These vectors of political attitude are heavily loaded with national concerns, threat perceptions and sheer interests. And the clash between global responsibilities and national obligations puzzle the will for action in favor of the future of mankind. Yes, there are many challenges to the present international relations system, but drafting, designing a master plan and a road map, acceptable to all leading global powers, that would be the model, providing guidance to the building of a community with a shared future for mankind, could be named the ‘hyper- challenge’ of the day. While for a long time it was normal to build our concepts of the world around the catchword “the American century,” the notion of “the Pacific century,” according to me, also proves to be inadequate for the complexities of the international system. The spatial framework of conceiving the blueprint for building a community with a shared future for mankind should be much broader and encompass the whole planet. And if we cannot but agree that presently the great power relationships are in flux, no less pressing is the understanding that these relations should be mended.

40.3 Is There a Win–Win Possibility for the Great Power Relationships? No major shifts in the international relations system are possible without the decisions and activity of the world great powers. The post-Cold War world passed through the period of unipolarity to the present state of multi-polar configuration of great powers with varying layers of hierarchy. In the economic area we witness three clear poles of power: the USA, the EU, and the PRC. In the military nuclear field, the old Cold War rivals: the USA and Russia. In the area of conventional weapons, the US leadership continues, but ambitious military programs in Russia, China, and the EU add specific new characteristics to the rivalry in this direction. This state of affairs coincides with a turbulent and unpredictable international relations system. The responsibility of repairing this situation is mostly of the great leading powers, in the direction of a new global and multipolar balance of power, in which the conflicting and the cooperative interests would be in a satisfactory for all equilibrium, especially on the issue of the global commons. The global challenges and real threats are serious enough to give pause to national ambitions before the international system collapses. Just to list some of them: . nuclear weapons and all other weapons of mass destruction proliferation . vacuum of power in some small and even medium states . terrorism, organized criminality, and corruption

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. the climate changes and the dramatic consequences, including with geopolitical repercussions in the Arctic, the Antarctic, islands in the oceans and seas, the coastal regions of all continents . outer space and how to guarantee the future of mankind by rationally engaging with activities there . global pandemics. The road to a win–win situation in the complex configuration of relations among the leading great powers necessarily requires turning all the enlisted issues into motivational factors for cooperation with each other. Efforts are needed to change a win-lose into a win–win situation. This is possible only if the USA, China, the EU, and Russia realize they have one and the same problems to solve and the solution would be profitable for all of them and the other almost 200 states. Which are the stumbling blocks I consider of major importance in working on that solution? First, the statuses in terms of gross power of the four leading global actors are not equal. However, the cooperative effect of their interaction measures higher in terms of effectiveness for global peace and stability, compared to individual victories of each one over the others. That means that each one of them should be treated as a key actor in the new global balance of power, euphemistically called sometimes the “new world order.” If these leading powers can reach this state of mind, then, probably, it would be possible to draft international legal rules that would mitigate geopolitical threat perceptions and ambitions. Rules-based international order provides better opportunities for peace and prosperity. The political but also the intellectual complexity of such an exercise is tremendous. However, this is not just responsibility for the leading world powers, but also for all other countries participating in international relations. Why? Because the positive solution of the abovementioned issues would be in favor of the interests of all countries. And also, because history teaches us that sometimes the win–win results for the great world powers take place at the expense of the interests and even survival of smaller and weaker nations. These nations need to be active in realizing their interests too. One more argument: the global challenges and threats require participation by all as dealing with them is not up to the capacity even of the strongest of states. Second, the policy of diminishing the equal status of the EU by the present US administration and by the Russian Federation. The arguments that the EU is not a federal structure, not capable of taking fast decisions as 27–28 countries need to participate in the decision-making process, the missing single armed force of the Union and a full-fledged and encompassing foreign policy underestimate the real capacity of an integration community which has passed the trial of thousands of years of intensive relations, many wars, including two world wars mostly concentrated on the territory of Europe. The EU is not just a leading economic power, it is a new level of integrating various national societies, an experiment that continues more than 60 years and has developed a new political culture, societal links, and individual relationships of almost 500 million people and institutions that predominantly raise the governing capacity of the national governments. The multiplying effect of the Common foreign and security policy of the Union and the national foreign and

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security policies of 27–28 states should be taken seriously. And most of all—the EU and the many contending for EU membership countries would not allow any present or future leader in both Washington and Moscow deprive the people of the Union of applying the most effective instrument of discarding war from the political toolbox of the states in the continent: widening and deepening of integration. The will of Europeans for peace is unmatched though not having yet fully functioning federal structures. Any effort to test the resilience of the EU, as we have seen by Russian meddling in the elections in many countries of the Union, or by stimulating Brexit-like behavior by Washington, is doomed to fail. The tendency is of turning the EU more and more into a single and effectively functioning entity proud of the values it is based on. Third, joint problem solving in a win–win mode is not possible without adequate trust among the leading world powers. One source of mistrust has its roots in the different ideological backgrounds, purposes, and motivations of the four major world power centers. It is an objective reality that each of these power centers would like to link logically the successes of the respective states, economies, and societies with the chosen ideological path. The conceptual debate is a fact of life and as in any debate these power centers should admit that each one of them has its domain of validity of the arguments and positions taken so far. In order to chart a dialogue that would drive forward the construction of a community with a shared future for mankind deep and sincere mutual respect for the vital interests of the other partners is needed. And also, a higher level of empathetic thinking should be educated to the representatives of these four power centers who should simultaneously discard the zero-sum strategic thinking. Another unfortunate source of mistrust stems from the conscientious return in the international relations toolbox of the instrument of military power in reaching foreign political ends. As if the world power centers were sincerely united in their joint fight on terrorism in the beginning of the present century, when mighty nuclear Russia applied military force in neighboring Georgia during the Olympic games in 2008, and in 2014, in neighboring Ukraine, annexing the Crimean Peninsula and gaining control over large territories in the eastern part of the country. The achievements of decades of intensive work, including in the Cold War period in Europe, that created the Helsinki Act of 1975 and that stipulated solemnly that no change of territory in the continent would be possible but by peaceful negotiations, were one-sidedly buried by Moscow. And the aggression on Ukraine took place after Kiev voluntarily gave up its status of military nuclear power after the collapse of the Soviet Union and after being promised by Russia to guarantee its territorial integrity in the Budapest Memorandum of December 1994. The troublesome element here is that one power center has decided not to focus on gaining economic might, as the other three do, but on non-productive and not stimulating global economic growth militarization of society and state, producing aggression on other countries. Apart from the political and social pressure on such a policy, self-restraint would be key to repairing the trust in the complicated power centers relationships. This is a condition without which the win–win behavior and end results would be virtually impossible.

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And to finish this section: the world needs the cooperative working relations of the leading power centers, the implementation by them of global economic projects for the good of mankind. A community with a shared future for mankind, a planetary civilization cannot be born without projects of the magnitude of the Belt and Road Initiative, without cooperative efforts in outer space, in dealing with climate change, in the Arctic and the Antarctic, without crushing global terrorism and organized criminality, without getting rid of nuclear and all other weapons of mass destruction, without pacifying conflicting areas and regions.

40.4 Conclusion: What Role for Small Countries Like Bulgaria? A community with a shared future for human beings would necessarily include the invested effort of more than 70% of the countries of the world rated from the point of view of the national power as small states. The vision, the leadership, the responsibility, and the example of the four great centers of power is not to polarize the relationships in the international relations system around axes or alliances that would be eventually shaped in search of more advantageous geopolitical, geoeconomic and finally, geostrategic and military positions. We have seen that with World War I, World War II and the Cold War and it would be detrimental for the objective trend of gradual formation of global, planetary human civilization whose working concept could be the building of a community with shared future for mankind. Where does my country, Bulgaria stand in these human and social endeavors? After the end of the Cold War Bulgaria played a leading role in southeast Europe in turning the peninsula from a potential war zone between the North Atlantic Treaty Organization (NATO) and the Warsaw Pact into a regional security community. It is characterized not by overcoming conflicting interests, but by dealing with them only in peaceful way. Getting rid of the wars in the Balkans was not an easy job, especially with the destructive dissolution of the Yugoslav federation, but with the support of the European Union now it is a fact of life that southeast Europe has turned into a normal region of Europe and immune to wars. The membership of Bulgaria in both the EU and NATO, strategic relationship with the USA and sharing of universalistic values as protection of the environment, respect for international law, democracy, human rights, nuclear non-proliferation, fight against terrorism as part of the global counterterrorist alliance under the auspices of the United Nations, constitute the invariant foreign policy and security strategies of the country in the last 25 years. Very disturbing for Bulgaria as a country on the west coast of the Black Sea are the developments in the region after 2008 and 2014. The aggression of Russia in Georgia and Ukraine marked the post-Soviet period in the most negative way possible. It is impermissible for a big country, nuclear armed and with a huge military to bully smaller and weaker states. The perception in the group of nine countries, the so

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called Bucharest 9 states (the three Baltic states, the four Visegrad states, Romania, and Bulgaria), is that Russia is aiming to make this area into its traditional sphere of influence with violent means. While the focus of Bulgaria’s foreign policy is the integration of the Western Balkans into the EU, the efforts to deter aggression from the East, including with the support of NATO, while keeping the channels open for cooperative relations between the Alliance and Moscow have not stopped. Bulgaria believes there are great chances for cooperation and prosperity of both the East– West and the North- South strategic corridors, whose intersection is in the Black Sea-Caspian Sea area. Locally any small country is in a position to contribute to the construction of a community with shared future for mankind. The four power centers should lead the way.

Chapter 41

Towards a Community with a Shared Future for Mankind: Contributions of the African Economic Research Consortium (AERC) Njuguna Ndung’u

41.1 Introduction The idea of building a community with a shared future has been increasingly accepted following an appeal by Chinese President Xi Jinping delivered while addressing the 70th Session of the UN General Assembly on Sept 28, 2015, at the United Nations (UN) Office at Geneva. The idea for building community with a shared future for mankind continues to be embraced internationally and has been included in various documents including UN Security Council resolutions, UN Human Rights Council resolutions, the Qingdao Declaration of the Council of Heads of Member States of the Shanghai Cooperation Organization and Forum on China-Africa Cooperation Beijing Action Plan (2019–2021). If adopted by all, there is no doubt that the idea of building a community with a shared future for mankind will go a long way toward bringing peace and stability in the world and lead to improvement in economic development for all. According to Yasuo Fukuda, former Japanese Prime Minister, “it is a common ideal for mankind to build a world without conflicts, one with equal development opportunities and every people in it blessed with happiness”. There is no doubt that most people in the world share an unprecedented degree of stability and wealth created in the history of humanity. However, several countries continue to experience the downsides of economic integration, including prominent negative impacts such as deficits in peace, development, and governance. Also, regional tensions and local armed conflicts remain major challenges to development. The slow and sluggish world economic recovery has further widened the gap between the rich and poor. Non-traditional security threats emerge one after another before the traditional ones are effectively contained.

N. Ndung’u (B) African Economic Research Consortium (AERC), Nairobi, Kenya e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_41

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Indeed, the vision of a shared future for mankind does represent humanity’s relentless pursuit of common interests and universal values. It represents an open, inclusive, clean, and beautiful world that enjoys lasting peace, universal security, and common prosperity. In such a world, international cooperation in the economic and public sectors is strengthened as a supplementary effort to address traditional and non-traditional security challenges. A shared future must also be built on common prosperity through win–win cooperation as development is only meaningful when it is inclusive and sustainable. A community of shared future also means an open and inclusive world with intensified inter-civilization exchanges fostering unity in diversity through dialogue on equal footing and mutual learning among different cultures. Each culture makes its contribution to mankind as a whole. Furthermore, a community of shared future represents a green, clean, and beautiful world fostering a sustainable ecosystem is vital for the future of mankind with all members of the international community working together to build a sound global eco-environment. In brief, a shared future for mankind reflects mankind’s common aspiration for peace, development, cooperation, and progress. This aspiration is also reflected in the African Economic Research Consortium (AERC)’s Vision and Mission and programmes design as it strives to build capacity for policy oriented economic research in Africa. The next section outlines the mandate of AERC and thereafter we show how the AERC mandate is in line with jointly building a community with a shared future for mankind.

41.2 African Economic Research Consortium (AERC) The African Economic Research Consortium (AERC) was established in 1988 and has grown to be a premier capacity building network in Africa. AERC’s focus is on building the capacity of individuals and institutions, as well as generating policy relevant economics research and training for informed policy making in the continent. The consortium’s mandate and strategic intent is built on the basis that sustained development in sub-Saharan Africa requires well trained, locally based professional economists. It is a vast network of policy makers, researchers, educators, international resource persons, universities, and national think tanks collaborating on capacity building and generation of policy-oriented research and training. The primary vehicles for capacity building in AERC are the Thematic Research Framework and the three postgraduate training programmes (Collaborative Masters in Economics (CMAP); Collaborative Masters in Agricultural and Applied Economics (CMAAE), and the Collaborative PhD Programme in Economics (CPP)). AERC’s Vision is to achieve sustained development in sub-Saharan Africa grounded in sound economic management and an informed society. Its mission for achieving this vision is to build the capacity of individuals and institutions, as well as generating policy-oriented economic research for informed policy making on the continent, guided by rigor and evidence. The impact of AERC research and capacity building activities can be summarized as increased use of evidence

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based policy making in economic management, increased stock of knowledge, and a more informed society. This has been achieved through research capacity building in thematic research and post-graduate training, generation of high quality policy oriented research outputs in collaborative research, and policy outreach. The core philosophy of AERC, as espoused through its vision and mission statements, is that development is more likely to occur where there is sustained sound management of the economy, and that such management is more likely to happen where there is an active, well-informed group of locally based professional economists to conduct policy-oriented research. This philosophy informs our passionate focus on capacity building as a foundation for African development and thereby the link to community with shared future for mankind. In furtherance of its vision and mission, AERC has evolved over the last three decades to become a complex, integrated knowledge organization geared towards (a) generation of knowledge pertinent to African development for consumption by African policy actors and others, (b) building capacity for generation of this knowledge through policy-oriented research and training, (c) building the capacity of African policy makers to formulate and implement sound economic policies, and (d) engagement with policy actors and to facilitate dialogue and peer learning among policy makers. In the last 30 years, AERC has made considerable progress in building capacity for economic policy research and analysis in SSA, bringing rigor and evidence to policy making in Africa. Through a synergetic collaborative and networking framework of its research and training programmes, supported by an interactive communications and policy outreach programme, AERC has mentored more than 3,400 African economists from 35 countries, and has completed numerous collaborative research projects which have directly and indirectly influenced policy making in Africa; and more than 3,200 Masters graduates and 270 doctoral graduates have been trained. In addition, a high-level policy network of senior African policy makers has been created, through the convening of regular Senior Policy Seminars.1 The AERC research and training alumni currently occupy key positions at various policy institutions, including at highest levels of policy making (e.g., Governors of African Central Banks).2 Despite this effort, a critical mass of locally-qualified individuals and institutions has not been achieved to sustain the required levels. As we point out later, the diverse but integrated nature of AERC through research, collaborative graduate training, policy outreach, and its vast network has placed it in a position to contribute towards a community of shared future for mankind. Thus, 1

Senior Policy Seminars bring together ministers of finance and planning, governors of central banks, and heads of government departments, among other senior government officials from across sub-Saharan Africa (SSA). Senior Policy Seminars provide a platform for (a) AERC to disseminates AERC collaborative research results to senior African policy makers and other stakeholders; (b) senior policy makers to provide feedback to AERC on contemporary policy issues requiring attention by African (and other) researchers, and (c) dialogue among policy makers, and thus enabling to learn from each other’s experiences. 2 The majority of AERC alumni are engaged as mid to senior level policymakers in government and/or international organisations, senior personnel in the private sector, or are posted in public universities.

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given its unique positioning, experience, and deep appreciation of the African policy environment, AERC to some extent has contributed towards a transformative change in sub-Saharan Africa and thereby towards a community of shared future for mankind.

41.3 AERC Capacity Building and Knowledge Generation Modalities AERC undertakes knowledge generation in both research and training programmes. The main channels for the knowledge generation are thematic research, collaborative research, and collaborative PhD training. Thematic research and collaborative research complement each other. First, the researchers who would have gone through capacity building in thematic end up competitively participating in collaborative research projects. Second, the majority of thematic resource persons participate as researchers in collaborative research projects. Figure 41.1 shows AERCs capacity building framework.

Fig. 41.1 AERC capacity building framework

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Thematic Research The AERC thematic research programme has evolved over time as the primary focus for capacity building in policy-oriented economic research for early career African researchers, and it is how AERC began. It involves conceptualization, framing, design, and analysis of key economic research questions of relevance to policy making in Africa. Although thematic research is a primary vehicle for capacity building, the process is highly competitive. The thematic research programme uses a unique framework in capacity building, combining learning- by-doing by researchers, peer review, mentoring and networking through the biannual research workshop, with skills improvement through technical workshops and visiting scholars’ programmes. The biannual research workshop is a flagship AERC research capacity building event. It is an innovative and enduring feature of the AERC research capacity-building modality which brings together the largest gathering of economics researchers and policy makers from across the continent, resource persons from Africa and the rest of the world and takes place twice in a year.3 The biannual workshop links AERC researchers to their peers and resource persons to receive constructive comments and mentoring.

Collaborative Research (CR) AERC has leveraged thematic research over the years by creating a framework, whereby senior African researchers, resource persons, and other thought leaders drawn from around the globe collaborate on big issues of contemporary policy interest to Africa, such as capital flight from Africa, growth and fragility, poverty alleviation, climate change, etc., which cannot be adequately addressed by individual efforts. By bringing together leading experts from around the globe, the Collaborative Research modality enables AERC to generate high-quality and policyoriented research for consumption by policy makers and other policy stakeholders, thus creating the “evidence-base” for informed policy making.4 Further, collaborative research outputs are typically published in top international journals and/or as book volumes by leading publishers, such as Oxford University Press or Cambridge University Press, thus allowing for wider impact of the research.

3

Each biannual research workshops brings together about 200 participants including about 120 thematic and CPP researchers at different stages of the research process. 4 Indeed, some of the AERC collaborative research outputs; e.g., the Capital flight from Africa project, Institutions and Service Delivery project; the Poverty, Income Distribution and Labour Market Issues in sub-Saharan Africa (SSA) project, have found direct application in policy in the continent.

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Collaborative PhD Training Programme (CPP) The AERC research framework has inspired the development of highly successful training programmes in masters and doctoral programs in economics, whereby a network of selected African universities collaborates on joint curriculum development, joint enforcement of standards, and joint offerings of electives at shared facilities. The collaborative PhD programme is also a research capacity building programme, with research fellows publishing part of their theses in reputable international journals. Moreover, through its collaborative training programmes, AERC is engaged in institutional capacity building through support of facilities and faculty of the network economics departments in public universities across the continent.

41.4 AERC Contribution Towards a Shared Future for Mankind Having presented the AERC Vision, Mission, and Programmes/activities in earlier sections, this section briefly outlines how AERC capacity building and knowledge generation modalities in Africa contributes towards jointly building a community with a shared future for mankind. First, AERC’s vision to achieve sustained development in sub-Saharan Africa grounded in sound economic management and an informed society and its mission are in line with building a community with a shared future for mankind. There is no doubt that many African countries are struggling to catch up with the rest of the world in many aspects and capacity building in every aspect is key to their efforts. AERC contributes towards capacity building for policy oriented economic research and graduate training in economics. This is already bearing fruits through providing skilled manpower to manage economies of sub-Saharan African countries. Indeed, there are several AERC alumni holding key positions and working in key government ministries and institutions in African countries. In these positions, the alumni are in a position to articulate the vision and mission of AERC and contribute towards the building a community with a shared future for mankind. Second, AERC, through its research programme, is involved in carrying out policy oriented economic research and also in building the capacity of young researchers to participate in such research on various issues affecting the African economy. Although Africa has experienced impressive economic performance in the last two decades, there are long-standing as well as emerging challenges that are threatening decades of development gains across Africa. These challenges include issues of inclusive growth, persistent poverty, climate change, food security, natural resource management, and others. AERC has successfully engaged with most of these issues through the Thematic and Collaborative Research, as well as the Training Programme. To a large extent, the African growth performance can be attributed to improved capacity for economic policy analysis on the continent, better policies

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and a new breed of policy makers who are “evidence-driven”, which AERC has contributed to. Through this effort, African society and policy makers are continuously well informed to make decisions that are informed by objective research. Indeed, the economic environment in Africa has greatly changed for the better in the last two decades with Africa posting impressive economic performance. Equally notable is that Africa’s growth has exhibited significant resilience as evidenced during the global financial and economic crises. The continent’s general economic performance continues to improve with growth projected to be at 4.1 percent in 2020,5 higher than in other emerging and developing economies as a whole but lower than in China and India. The challenge remains to achieve a higher growth path that is inclusive and pro-employment. Africa has been integrating along various dimensions for the past 60 years. Economic unification will be part of the solution to Africa’s development dilemma. AERC is a network of researchers and institutions in Sub-Saharan Africa and has links with other international organizations/institutions and individual economists. The network brings together Francophone and Anglophone African countries and institutions in sub-Saharan Africa. Thus, the network breaks language, boundary, and continental barriers to forge a united front in solving common problems confronting the African Continent. In building and enhancing this network AERC contributes towards building a community with a shared future for mankind. This includes equal partnerships, mutual consultations, and mutual understanding; forging a jointly constructed security pattern of fairness, seeking open, innovative, inclusive, and mutually beneficial development prospects; promoting harmonious exchanges among civilizations; and respect for nature and the pursuit of sustainable development, all of which are part of the path for building a community of shared future for mankind.

41.5 A Way Forward AERC will continue its efforts to build the capacity in economic policy oriented research and collaboration on graduate training in economics in Africa as it contributes towards jointly building a community with a shared future mankind. With time, the increased use of evidence-based economic policy making has worked well for Africa, but it has also resulted in increased demand for well-trained economists, which at present outweighs the supply. AERC is grateful to partners who have so far supported and continue to support its efforts towards achieving its long term vision. We are also looking to welcome new partners in China and across Asia to support AERC’s effort and contribution towards jointly building a community with a shared future for mankind.

5

See African Economic Outlook 2019.

Chapter 42

Community with Shared Future for Mankind from the Perspective of Buddism Kapila Abhayawansa Randunu Pathirannehelage

The concept of Community with Shared Future for mankind put forward by China is undoubtedly based on the common aspiration of mankind. This suggests achieving peace and happiness on a common basis for all through the harmonious co-existence of Mankind. The common aim of mankind irrespective of differences such as cast, race, religion, and gender, is to be happy and to avoid suffering. Desire for happiness and repugnance to suffering are the intrinsic aspirations of human beings, as Buddhism pointed out two thousand five hundred years ago.1 Therefore, it is obvious that the idea of community with shared future for mankind is quite compatible with the primary aim of human beings as shown in Buddhism and also it is nicely in line with the Buddhist slogan, “may all living beings be happy”.2 Though acquiring happiness and avoiding suffering are the aim of all individual members of mankind, it is surprising that apparent nature of most of the individuals is to achieve their own happiness through violent means irrespective of the suffering of other fellow members. This is quite true with regard to most of the communities or countries in the world. This is the main reason why we experience different types of struggles, fights, killings, massacres, and wars among individuals, communities, or countries. Buddhist teachings based on relativism never accept only individual welfare without considering the needs of society. It always emphasizes the wellbeing of both the society as well as the individual. Society and individual must both work together to ensure prosperity and progress. This dual function of the result of one’s action directed towards oneself and others was interestingly pointed out by the Buddha in the satipat..th¯ana-sam . yutta in 1 Sukhak¯ am¯a hi manuss¯a – dukkha pat.ikk˜ul¯a” [Human beings seek pleasure and adverse pain], Majjhima nik¯aya. PTS. Vol I, p. 341; see also Sam . yutta nik¯aya, PTS. Vol IV, p. 127 ff. 2 Sabbe sattã bhavantu suhkhitattã. Karaniya metta sutta, Suttanipãta.

K. A. R. Pathirannehelage (B) Vice Rector for Academic Affairs, International Buddhist College, Songkhla, Thailand e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_42

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the Sam . yutta-nik¯aya as follows: “Protecting oneself, one protects others; protecting others, one protects oneself. (att¯anam ˙ rakkhanto param ˙ rakkhati param ˙ rakkhanto att¯anam ˙ rakkathi)”.3 Commenting on these two complementary sentences, Ven. Nyanaponika explains well how one’s action mutually benefits both the doer and others: “We shall now better understand how those two complementary sentences of our text harmonize. Self-protection is the indispensable basis. But true self- protection is possible only if it does not conflict with the protection of others; for one who seeks self-protection at the expense of others will defile as well as endanger himself. On the other hand, protection of others must not conflict with the four principles of patience, nonviolence, loving-kindness, and compassion; it also must not interfere with their free spiritual development as it does in the case of various totalitarian doctrines. Thus, in the Buddhist conception of self- protection all selfishness is excluded, and in the protection of others violence and interference has no place”.4 It should be mentioned that China has properly understood the value of the concept of mutual protection espoused by Buddhism. It is nicely delineated in the report to the 18th National Congress of the CPC in November 2012. It says: “In promoting mutually beneficial cooperation, we should raise awareness about human beings sharing a community of common destiny. A country should accommodate the legitimate concerns of others when pursuing its own interests; and it should promote common development of all countries when advancing its own development. Countries should establish a new type of global development partnership that is more equitable and balanced, stick together in times of difficulty, both share rights and shoulder obligations, and boost the common interests of mankind”.5 There is no doubt that China’s endeavor for a Community with Shared Future for Mankind is based on the altruistic aspiration recommended by Buddhism. When we look at the world of today, it is quite clear that many countries are struggling to overcome their social and political problems which lead to unrest and unhappiness of their people. Without the assistance of other powerful nations, they are unable to move forward with development activities. In such circumstances it is laudable that China presents the program called Community with Shared Future for Mankind which solely aims at peaceful, harmonious, and happier co-existence of mankind. Nandalal Tiwari observes: “This is the first amendment on China’s foreign policy since the 1982 constitution amendment. And this signifies a clear shift in China’s foreign policy thrust as it indicates that China, as a major country in the global affairs, will endeavor for development of humanity at large while maintaining its policy of peaceful co-existence”.6 3

Sam . yutta nik¯aya (S.), op. cit., Vol. V, p. 160. Nyanaponika Thera, Ven. “Protection Through Satipat.t.h¯ana” (Kandy, Sri Lanka: Buddhist Publication Society, 1994). Access to Insight (Legacy Edition), 2 November 2013, http://www.accesstoi nsight.org/lb/authors/nyanaponika/bl034.html, accessed 25 April 2015. 5 Hu Jintao, Hu Jintao Wenxuan, Selected Works of Hu Jiangtao, Vol. 3, Beijing: People’s Publishing House, 2016, p. 651. 6 Nandalal Tiwari, “Community of Shared Future for Mankind”. The Rising Nepal, http://therising nepal.org.np/news/22680, accessed 03-10-2019. 4

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The concept of a community with shared future undoubtedly suggests a global society where all the members can survive happily on the ground of peaceful coexistence, which Buddhism is looking for. The society which is implied by the Buddhist principle of loving kindness (mettã) can be brought out successfully through the effective implementation of the concept of community with shared future for mankind put forward by China. By mere wishing loving kindness would not affect to the life of people. There should be systematic procedure to put its vision into action which leads to happiness on the equal basis to the entire mankind. In this respect, China deserves to be honored as the first country which came forward to implement a meaningful and effective system which paves the way for peace, happiness, and prosperity on the global scale, through the ideology of community of shared future for mankind. Globalization of the economy, polity, culture, ideology, and so on provides a good opportunity for the global society to transform humanity into a high level to mark the development of both inward and physical aspects of human beings in equal measure if the transformation is guided by an authority with the power to administer it with a right vision based on the real nature of humankind. When we critically examine the globalized culture, ideology, economic policies, fashion, and political perspectives prevailing all over the world today, a suspicion arises as to whether the global society is a product of evil-minded groups of people or institutions or organizations under which the process of the globalization is taking place. Present form of globalizing movement brings interconnections among societies together by way of promoting events, decisions, and activities in different parts of the world. This is in part an expansion of anything (goods and services) thought to be required or desired by people all over the world. In this process no attempt is made to choose what is beneficial (attha-samhita), ˙ or unbeneficial, harmful (anattha-samhita) ˙ to people in the global society. When we consider what flows almost seamlessly throughout the world because of globalization, it is quite evident that both beneficial and unbeneficial or harmful things secure the opportunity to move almost anywhere, often without restriction. Hence, as McGrew pointed out, we can find social relations in the global society “in virtually all areas of human activity, from academic to the sexual”.7 It is evident that the globalization process emanated from Western liberal society which, in our opinion, lays more emphasis on sensory enjoyment. The principles of Western liberalism such as free and fair elections, civil rights, freedom of the press, freedom of religion, free trade and private property seem to be founded on moral principles. But it should be noted that some of the principles of liberalism such as freedom of the press and free trade, which are increasingly manifest in globalization without much restriction, are giving rise to disastrous results in global society. It does not matter whether globalization is controlled by a group of people or institutions belonging to either the Western or Eastern part of the world. What 7

Anthony McGrew, “A global society?”, in Modernity and its Futures: Understanding Modern Societies, Book IV. Stuart Hall, David Held and Tony McGrew, Eds., Cambridge, U.K: Polity Press, 1992, pp. 65–66.

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is more important is that globalization should develop with full awareness of the physical and psychological wellbeing, in its highest sense, of all humankind. Yet, it is evident that the present globalization shows little if any such conscious movement. The danger involved in the present situation was anticipated forty years ago by the former Director General of UNESCO, Mr. Federico Mayer, in the following way: “Today scientific knowledge and technology are developing too rapidly for them to be integrated into our everyday world … There is even a considerable risk, if care is not taken to forestall this eventually, of the emergence of a ‘Brave New World’ where a silenced majority will be dominated by those who possess and control knowledge, information, and communications”.8 The attempt initiated by China to bring out a global society based on the principle of peaceful co-existence through the ideology of Community with Shared Future for Mankind cannot be interpreted as an attempt to dominate the silenced majority in the world under its control. This is quite clear from the statement of Chinese Foreign Minister Wang Yi who clearly revealed China’s future diplomacy. The statement runs as follows: To make new and greater contributions for mankind is our Party’s abiding mission… This is an important distinction between the CPC and political parties of other countries, as well as an international image the CPC has fostered… The construction of a new type of international relations, and the building of a community with a shared future for mankind make it necessary for China to make practical efforts and set an example, as well as unswervingly pursue a road to a great nation which is different from that of traditional powers. This is not only the historical duty that China, as a big socialist country, should undertake for the development of human society, but also the historical mission that the Chinese Communists should advance for the progress of human political civilization.9 Commenting on this statement, Charlotte Gao observes, “what Wang actually said is that the CPC aims to set an example to the world, proving that its unique model, different from that of those traditional Western powers, can lead humankind, too”.10 Any activity done with the altruistic spirit is based on the right vision which is in Buddhist terminology sammã di¸t¸thi. The community with shared future for mankind definitely refers to right vision as it aims at peace, happiness, and wellbeing of mankind. Therefore, this ideology of community with shared future is nothing other than the right intention (sammã sankappa) which is expressed through intention free from lust (nekkhamma-sankappa), intention of good will which is free from ill will (avyãpãda-sankappa), and intention of harmlessness free from cruelty (avihimsãsankappa). This newly adopted foreign policy of China does not aim at expansion of its territories to keep other countries under its control. Hence, there cannot be a lustful 8

The Ethics of Life, Edited by Denis Noble, Jean-Didier Vincent; with contributions by György Ádám … [et al.] Paris: UNESCO Publishing, 1997, p. 8. (See the preface). 9 Charlotte Gao, China Power, “A Community of Shared Future: One Short Phrase for UN, One Big Victory for China?” https://thediplomat.com/2017/11/a-community-of-shared-future-one-short-phr ase-for-un-one-big-victory-for-china/, accessed 04–10-2019. 10 Ibid.

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intention. When we examine the purpose of presenting the concept of community with shared future for mankind by China is to bring out unity in diversity through which peace, harmony and prosperity can be achieved on the common basis. Hence, it involves intention of good will. This intention of good will is quite clear when we understand three dimensions of the community of shared future for mankind. Professor Wang Yiwei explains it in the following way: “There are three dimensions to understand Community of Shared Future for Humankind: historically, activating shared traditions of lasting peace, common security; Presently, shaping common prosperity and open/inclusive international system; in the future, building a green and sustainable world, seeking global dynamic consensus in the AI revolution and global commons”.11 Intention of non-violence is also a pertinent characteristic of the concept of community with shared future. Violence involves war affairs, which necessarily emerge from the ill will. China has proved from its development strategies and dialogues with other world leaders that it does not have an idea of getting involved in war affairs for the purpose of expansion of its territories. Asia–Pacific reports that “Over the past 70 years since the founding of the People’s Republic of China, China has never provoked a war or conflict, nor has it ever invaded another country or taken an inch of land from others. History has proven and will continue to prove that China will not follow in the path of the big powers seeking hegemony when it grows strong”.12 Buddhism, through its social principles and economic policies, seeks a harmonious, peaceful, and prosperous global society where there is not any kind of injustice which leads to social miseries. Even in the Noble Eight-fold Path which leads for the achievement of ultimate happiness there are factors namely, right vision (sammã di¸t¸thi), right intention (sammã sankappa), right speech (sammã vãcã), right actions (sammã kammanta), and right livelihood (sammã ãjïva), which have direct appeal to social aspects which can bring out an ideal universal society. If the ideal human qualities such as generosity (dãna), liberality (pariccãga), equality (samãnattatã), loving kindness (mettã), compassion (karunã), appreciative joy (muditã), equanimity (upekkhã) and so on enumerated in Buddhism meet the appropriate strategic plan to implement them among mankind on the global basis, there is no doubt that the dream of the community of shared future certainly would become true. The universal kingdom proposed through the legendary universal monarch (ckkavatti rajã) by Buddhism13 has no difference with the global society suggested by China through the community with shared future for mankind. When we examine the action plan put forward by China to make true the dream of community with shared future, it

11

Prof. WANG Yiwei. “Where China’s Belt and Road Initiative (BRI) Meets Indo-pacific”, https:// www.car.chula.ac.th/carweb2/upload/[CV]-Prof.-WANG-Yiwei.pdf, accessed 05-10-2019. 12 Asia–Pacific, ed. Li Xia, Commentary: Building a community with shared future for mankind key to maintaining peace, prosperity. http://www.xinhuanet.com/english/2019-06/02/c_138111345. htm, accessed 5-10-2019. 13 See Cakkavatti-sïhanãda sutta in Dïghanikãya.

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would not be a very long time for people to experience the taste of such a perfect society which Buddhism is looking for. Another very valuable implication of the concept of community with shared future for mankind is that “countries should respect one another, discuss issues as equals, and resolutely reject a Cold War mentality and power politics. Countries should take a new approach to developing state-to-state relations with communication, rather than confrontation, and partnerships, rather than alliances”.14 This really reminds us of the factors for development (aparihãnïya dhammã) recommended by the Buddha for the Licchavi kings.15 Working together in unity is very important as it always leads to solve the mutual problems among the countries without disputes. Friendly discussions, dialogues, mutual respect, and understanding necessarily avoid harmful and dangerous results which pave the way for conflicts, confrontations and wars. It is more likely that the pragmatic application of the concept of community with shared future finds its ideological background and inspiration from the belief expressed through the following statement made by President Xi Jinping at the 95th Anniversary of the Founding of the Communist Party of China: “China believes that all countries are equal, irrespective of size, strength, and wealth. It respects the right of all countries to choose their own path of development, upholds international equity and justice, and opposes the act of imposing one’s will on others, interfering in the internal affairs of other countries, and using one’s strength to bully the weak”.16 This virtuous belief of China has equal footing with the Buddhist concept of equality (sam¯anattat¯a) coming under the four sources of hospitality (cattãro sangaha vatthu). The virtue of equality is expressed through impartiality (sam¯anattat¯a). It “requires treating all persons equally as human beings. To be impartial one must go beyond one’s parochial considerations of gender, ethnicity, color, religion, or country”.17 This avoids using one’s strength to bully the weak and expects all to enjoy equal rights. In such a circumstance, there is no need to insist that there cannot be imposing one’s will on others. The aim of Buddhist social principles is to bring out a global society where all members live together happily in harmony and peace enjoying social rights and privileges on the equal basis. When the concept of community with shared future for mankind is taken into consideration from Buddhist point of view, there is no doubt that it conveys all Buddhist social principles by implication. Though the principles are there even in the highest form, if there are no methods of applying of them into reality, they would remain only as mere concepts forever. The building of a harmonious world of enduring peace and common prosperity is undoubtedly a gigantic project as it covers the entirety of mankind. It is fortunate that China has realized this truth 14

Xinhua, “China Keywords: Community with Sehared Future for Mankind”, http://www.xinhua net.com/english/2018-01/24/c_136921370.htm, accessed 06-10-2019. 15 See Mahã parinibbãna sutta: Dighanikãya. 16 Xi Jinping, “Speech at the Congress of Celebrating the 95th Anniversary of the Founding of the Communist Party of China”. 17 Prof. G. A. Somarathne, “The Buddhist Concept of Hospitality: A Value That ‘Connects’ People”, IBC Journal of Buddhist studies (IBCBS), Vol. 1, 2019, p. 218.

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and come forward with the effective methods for the actualization of the dream of everyone. It is the duty and responsibility of all nations big or small in the world to give their fullest support individually and collectively to China for this invaluable philanthropic project.

Chapter 43

A New Scientific Paradigm as a Key to Building a Community with a Common Future for Humanity Valentina Bondarenko

We should not discard our dreams, because the surrounding reality is too complex; we should not stop following our ideals, because they appear to us as unfeasible. Xi Jinping

The need for studies on solution to the avalanche-like growing problems is becoming ever more acute not only in Russia but also in all countries of the globe. This is especially important as the socio-economic situation continues to deteriorate, economic growth-rates are reduced in all countries, the wealth-gap is growing concomitantly with the growing tensions in different regions of the world, and security threats caused by proliferating terrorism, cyber-crime, and climate changes. On the other hand, the worsening economic, social, and political situation in the world means that scientific knowledge, which we possess and apply since long ago, doesn’t produce the desired result and doesn’t resolve any of the existing problems. Hence, there is the long-standing need to develop and apply a new scientific paradigm as the necessary base for accelerated productive resolution of centuries-long problems and for development of the uniform development strategy for Russia, China, and the entire world. That resolution of this task is timely seeds no doubts. As early as the first half of the twentieth century Arnold Toynbee wrote on the need to proceed from the narrow disciplinary studies to cross-disciplinary ones [1], while in 1975, Thomas Kuhn published his book in which he substantiated the inevitable change of scientific paradigms, or scientific revolutions [2]. In his view, the new scientific paradigm should be seen not as a current theory, but rather as a whole worldview, in which it will exist together with all conclusions, drawn owing to its appearance. Let us make the above discussion clearer by discussing Russia’s case. In the Russian academic community, everybody is familiar with publications by a scholar from IMEMO RAS, Professor and Doctor of Economics Vladimir Pantin. In V. Bondarenko (B) Institute of Economics, Russian Academy of Sciences, Moscow, Russia e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_43

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April 2019, he published an article entitled “Russia Should Get Prepared for War” [3], where he wrote that it’s highly (by some estimates 90%) probable that the forthcoming years would witness a local war, in which Russia would be constrained to defend its national interests and the very right to independent existence. He substantiated his conclusions by means of N. D. Kondratiev’s cycles-and-crises theory, developed by the great scholar in early twentieth century. Based on extrapolation of Kondratiev’s studies to the current situation in Russia and the world and having supplemented it by empirical analysis of the current events and trends, Pantin draws the conclusion that Russia needs to get prepared for a war. Pantin substantiates the central idea in his article by saying: “Basing on analysis of Kondratiev’s cycles… and on empirical analysis…” That is, the crisis of scientific knowledge on the economic reality and the lack of objective understanding of the human-system development regularities have pushed the global world to select the deadlock or, more precisely, catastrophic path of development. For the time being, none of the economic theories, representing the third general scientific paradigm, has helped to evade the economic-science crisis and hence all of them failed to provide the effective prescription for evading the human-system development crisis. Another case in point: Today, in Russia, under the Federal Law “On Strategic Planning”, at least 23,200 different-level strategies are being elaborated in the hope of their realization. Actually, the number of such strategies is much bigger than the quoted figure, as such strategies are being developed within 12 national projects, plus within sub-projects, etc. Each of these strategies has its goal, indices, and criteria for project assessment. At the meeting of May 8, 2019, chaired by the RF President, participants mentioned another 15 indices showing fulfillment of non-fulfillment of national projects. Meanwhile, as demonstrated by practice, only 25% of measures, listed in the “road maps”, cause direct influence on attainment of the national goals, while the rest were borrowed from the former national projects, which, as is known, have not produced any “breakthrough”. Another example is found in world practice. As assumed, the 17 sustainable development goals adopted by the UN in 2015 form the image of the future world, but they too have 169 tasks and 338 global indices, multiplied by regional- and national-level indices, and the target term for their attainment is 2030. Therefore, there are grounds to assert that none of the aforementioned strategies approved in Russia, and none of the sustainable-development goals adopted in the UN, would be realized, because realization runs counter to the systemic, integral, and comprehensive perception of development. Multiple development strategies in different forms and with other contents have been adopted not only in the 10 most powerful countries of the world, but in all other ones as well. That is, we see that the existing economic theories and scientific knowledge at large fail to reveal the objective causes of crises, risks, and all other negative phenomena, and to offer to the global world the uniform development strategy and the effective mechanism for its realization.

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Until now, economic knowledge is based on collection and processing of empirical data from the past and subjective judgments on realization and prolongation thereof with big admissions and uncertainties for the future. This results in big mistakes in cognizing the real picture of the world. Further, nobody sees a possibility to substantiate clearly and specifically the outline of the future for Russia and the entire world. All this means that the subject of searching a new scientific paradigm is most timely and is demanded by the time as never before, while Toynbee and Kuhn said the same in the past century. The theory of paradigms and science revolutions is presented most saliently in the aforementioned work by Thomas Kuhn. In the light of this theory, even the fourth general-scientific paradigm is the theory of self-organization and synergetics, which does not offer research methods for relevant description of economic reality. Hence, it becomes ever timelier to substantiate a new scientific paradigm, which would help to resolve all these problems. At this point, we should note that in the late 1960s the Club of Rome, an international NGO, established by the initiative of Italian economist Aurelio Peccei, put forward the program of global problems studies and set its task to offer such methodology that would enable the society to analyze reliably all “difficulties of mankind”. So far, the Club of Rome members have not devised such methodology. Since 1968, the Club of Rome issued over 40 reports in total. The authors of its new report, entitled “Come On!” and issued in late 2017, are E. Weizsäcker and A. Wijkman, who actually demand to change the whole contemporary mode of production and consumption, but do not specify the goals of such a measure and the way to realize it. Therefore, it becomes clear that the precise selection of the path to forming a new scientific paradigm requires the relevant methodological tool-kit. After many years of empirical, politico-economic, and world-vision studies the author of this article could devise such a tool-kit, which enabled her to set and resolve the four tasks. The first task, set by the author, was to try to define the goal of human presence on Earth. The second one was to find if it would be possible to unify the integral, comprehensive, systemic, and cross-disciplinarian approaches to development into a single approach, The third task was to find a uniform index, owing to which the picture of the world and is development paths would become absolutely transparent, while the fourth task was to find the only possible criteria of efficiency in development of the human system and any of its subsystems. As shown by the resolution of the first task, the human presence on Earth is not incidental. The only possible and objectively set goal and mission of mankind and a human-being is to reach the Supreme Reason in the course of his/her development, as he/she understands the need to do everything in order to satisfy the supreme need of any specific human being to become physically, intellectually, and spiritually perfect, and to reach the high level of consciousness. Otherwise, crises would grow through to the apocalypse and self-destruction. The resolution of the second task—to unify the integral, comprehensiveness, systemic and cross-disciplinarian approaches—turned out to be feasible, if these

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approaches are applied together for resolution of the first task to define the path to attaining the objectively set goal of mankind’s development. In this case, the actual cross-disciplinarian or, more precisely, trans-disciplinarian factor will be provided, when in relation to the goal and the path (strategy) for its realization it becomes necessary to combine all sciences and spiritual knowledge. That is, it became clear that the real result will be obtained, if all these approaches are unified for realization of the objectively set goal of mankind’s development. It should be noted here that quite a few attempts have been made already to combine science achievements with spiritual knowledge. Most often such attempts are made by physicists, facing some actual phenomena, which cannot be explained by means of the knowledge available in physics, or by its laws. Scientific and spiritual knowledge used to be combined in China since the ancient times, and the best known examples are provided by Lao Tzu’s and Confucius’ teachings. As proved by these examples, there are all the reasons to see them as the beginning of the formation of the new paradigm! Resolution of the second task enabled us to understand how to remove chaos, complexity, and uncertainty from understanding of all aspects of mankind’s development, and to minimize, in time and space, the search of resolutions for elimination of all problems. However, many academics believe that chaos, complexity, and uncertainty are the natural condition for development, and even devise new fields of knowledge, for instance, synergetics, the science of complexity, and establish corresponding think-tanks, such as the institute of synergetics in Santa Fe, US. In our view, appearance of complexity in development means moving to the goal by the “trial and error” method. It becomes possible to remove complexity and chaos from understanding the human-system development only by applying the unified integral, comprehensive, and systemic approaches together with trans-disciplinary knowledge, but only in relation to the identified objectively set goal of human presence on the Earth. Until now, the cross-disciplinary study was understood as a resolution of tasks for one discipline by methods of the other one, or as the aggregate of simultaneous resolutions of separate aspects laid in systemically unconnected socio-economic, financial, demographic, ecology-and-climatic, and other tasks and processes by methods of narrow scientific disciplines. The result is well- known: the crisis in the human-system development is growing. To find the index, which would help to measure and juxtapose all processes and phenomena that cannot be measured and juxtaposed by means of other indices, became the condition for resolution of the third task. The latter had to be resolved so that all these measurements would be directed to understanding all aspects of the mankind development in relation to the objectively set goal. The only index which satisfied such conditions happened to be time! After resolution of the first three tasks, the fourth task—to identify the single criteria of efficiency in the human-system development—was resolved automatically. We understood that such efficiency criteria for the whole human system, any of its sub-systems, and each specific human individual is the “time between” the attainment of the objectively set goal and the reality, in which they are present at the given

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moment. Should the “time between” reduce and approach zero irreversibly (i.e., without crises), it would be evidence for the fact that Russia, any other country, or the whole world in their development objectively and synchronously come closer to the goal’s attainment. It appears that with reducing “time between”, each state, community, business, and each human individual start to fully understand the goal as well as the need of its setting and attainment. As shown by our studies, if the “time between” grows for all actors but at different rates, this means that the whole community, all its parts, and all people find themselves in different spaces of “time between”, have different levels of consciousness, different interests, and it will be the ever harder for them to agree with one another. Such a situation will be followed inevitably by the conflict growth through to the war. Today the world is at the peak of such relations, and these conditions seem to leave no chance to provide general and economic security for Russia and the world. In this context, Pantin’s warning that in the nearest future a local war can start in Russia may happen to be correct. Therefore, it is most important to have the “time between” equal for all countries and residents thereof and reducing simultaneously for all to zero. Hence a uniform strategy is needed to provide for such synchronous and swift (both in time and space) development of the entire global world and construction of the commonfuture community. All fundamental bases are already available for the development and realization of such a strategy. The resolution of all four tasks in aggregate helped not only to obtain the new methodological tool-kit and on its basis to substantiate the new scientific paradigm, but also to have a chance to devise the development strategy for the whole globe and humanity, plus the mechanism for its practical realization. That such possibility is already available is confirmed by the results, obtained earlier with application of the new methodological tool-kit. For instance, as of today, the author has managed to: (1) Formulate the new paradigm for forecasting future from the future, i.e., the future, in which the objectively set goal is attained, and the “time between” approaches to zero. All human and societal needs are realized at the level and by means of the thought. That is, the future would be forecasted from the time, when a human being has become perfect and reached the Supreme Reason. After return from that zero time to today, it becomes possible to select and realize only those projects and solutions which contribute to reduction of “time between”, and hence the goal attainment shall be accelerated while consumption of all resources shall be reduced [5]. (2) Identify the human-community development regularities, puzzle out the systemic-crisis nature, and understand that there are only two development paradigms on the Earth: one, featured by crises, and the other one offering the opportunity to create all conditions for transition to the crisis-free development. This will become possible only with development and realization of the uniform development strategy for Russia and the entire world [6]. (3) Devise the mechanism for the realization of the uniform development strategy for Russia and world. Such a mechanism shall become available, if, in the

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circumstances of rapid introduction of Industry 4.0 digital technologies, all national economies would develop through coordination of state, business, and societal interests with the interests of each concrete human individual, and if such a mechanism for coordination of most diverse interests would be realized: . . . .

in the real-time regime manage development through the management of “time between” at each local level in the self-governance regime in realization (for instance, by means of additive technologies) of personalized production under the consumer order, with excluding manufacture of non-demanded products and with preserving all natural resources in the primeval condition [7].

The aforementioned points prove that we obtain basic conditions for the resolution of all problems, development of the uniform development strategy, and actual realization of Chairman Xi Jinping’s proposals on building the shared-future community on our planet. The listed basic conditions have already passed through several probations in the author’s multiple articles published by the reviewed journals in Russia and abroad, in presentations at important international conferences, and are supported by the Diploma on Discovery in Social Sciences (No. 43, issued on 26.12.2016). Today, in the conditions of Industry 4.0 technological revolution and swift introduction of thereby created digital appliances, artificial brain, Internet of Things, bio-, neuro-, and other technologies of the twenty-first century, Russia and all other counties may undergo one of the three transformations of the existing socio-economic model for the human-system development. In the new models, relations among the state (government), society, business and concrete human individuals will differ depending on the selected development goal. In the first possible future model, the society (unintentionally) and a small group of persons (intentionally) shall select different development goals, which shall be differently directed, and development shall proceed through the “trial and error” method. In this case, the future appears uncertain, its attainment will be stretched in time, while accelerated application of digital and other technologies will generate big human and resource losses and may result in apocalypse. That is, the moment of reaching singularity as a point of no return in attaining different development goals and the transition to the new socio- economic model of the common-future community may never come. The second possible transformation of the existing model shall be featured by development proceeding in conditions of the currently existing paradigm, in the interests of a narrow group of persons and thereby adopted goal and values. In such model, we see, as a trend, the appearance of technological singularity, the core of which includes artificial brain, plus digital, biological, and other technologies for manipulating and governing the human consciousness. In such model, the final target is to gain control over the whole world and each human individual in order to receive maximal profits. Risks for states, the entire global community, and a human individual shall grow. Transition to the new socio-economic development model and to building the common-future community shall become impossible, as

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the given path shall increase the probability for appearance of such phenomena as, for example, the Islamic State ideology. Exactly therefore thereby formed values are so attractive for many, and, especially, young people, and exactly therefore today the digital revolution and other high technologies of the twenty-first century, apart from positive facets, bear grand threats through to the threat to mankind existence. However, if development would be directed consciously, with understanding of the final goal, and proceed in the interests of each human individual, living in Russia, China, and all other countries of the globe, and if such interests are coordinated in real-time regime at each local level, then all conditions will be formed for transformation of the existing socio-economic model into the third development model of community with common future for humanity. Its orientation to the diverse interests of each human individual will make it possible to apply digital technologies for production under his/her order; not to manufacture any redundant products; to preserve natural and human resources in primeval condition, and to offer more free time for his/her own perfection. All this will be the only possible condition, which can motivate each and, especially, young human persons to provide for sustainable development in relation to the goal, and for accelerated construction of the commonfuture community. Exactly in this case, technological (digital) singularity shall be synchronized with singularity in the forming new human relations and human understanding of the need to bring closer, evolutionally and irreversibly, attainment of the global-development goal. Today, the world finds itself between the first and second models. However, rapid introduction of different technologies, digital appliances, artificial brain, bio-, neuro-, and other technologies of the twenty-first century, together with aggravating international relations, migration processes, sanctions, trade and diplomatic wars, plus other negative developments around Russia, between the US and China, the US and Europe, etc., rapidly bring the world to the second development model, in which the final goal is to control the whole world and each human person. The consequences are described above. Risks will grow, while states may disappear. Therefore, it becomes critically important that states and their No. 1 leaders, for preservation of themselves and their nations, for the sake of general security and for transition to comprehensive, joint sustainable development and actual construction of the common-future community would attend, first and foremost, to accelerated resolution of the task to form the third development model and strategy for its attainment in a universally understood and accepted future. Such a transformation of the existing socio-economic model into the third development model becomes possible only in the presence of new fundamental knowledge on the future and by means of digital plus other high modern technologies. Exactly such relevance of the new production relations and new production forces provides attainment of the global goal for every human to become highly conscious and physically, spiritually, and intellectually perfect, and thus to reach the Supreme Reason. This will be feasible only with construction of the common-future community by means of minimal resources, reduced work-hours, and more free time for his/her own perfection.

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43.1 Conclusion The development and long-term application of the new methodological tool-kit, plus the already obtained results provide the ground to assert that we took the way to formation of the new scientific paradigm and new knowledge on the humansystem development regularities. Such knowledge would help to devise the uniform development strategy and serve the base for building the common-future community, provided that development shall be targeted to each human individual. Thus, development shall be provided not by the “trial and error” method, but rather by understanding of the final goal and in the interests of each human individual living on Earth. Indeed, the world will improve when it is built as open, clean, harmonious, beautiful, and safe for everybody and for each human, and when it encompasses all spheres of human life. Certainly, such world cannot be built overnight. But to lay the solid foundation is the duty of the current generation of scholars/ scientists, policy-makers, and all people. Otherwise, the apocalypse is inescapable, and the mankind will cease to existence.

Suggested Reading 1. Arnold J. Toynbee. Study of History. Vols. I–X, 1934–1954. 2. Kuhn, Thomas. Struktura nauchnykh revolyuysii. [Structure of Scientific Revolutions]. Translated from English by I. Z. Naletov. Moscow, 1975. 3. Patin, Vladimir. Rossii nado gotovit’sya k voine. [Russia Should Get Prepared for War]. REGNUM IA, April 5, 2019 https://regnum.ru/news/2606320.html 4. FZ “O strategicheskom planirovaniyi v Rossiiskoi Federatsiyi” [Federal Law” On Strategic Planning in the Russian Federation], No. 172-FZ of 28.06.2014 g. [E-resource] URL: http:// www.kremlin.ru/acts/bank/38630 (addressed on 24.07.2019). 5. Bondarenko, V. M. Tsifrovaya ekonomika: videniye iz buduschego. [Digital Economy: Vision from the Future] // “Tsyfrovaya ekonomika”, 2019, Vol. 9, № 1/5. pp. 36–42. 6. Bondarenko, V. Transition to Crisis-Free Development: A Myth or Reality? // World Futures. 2014. Volume 70. № 2. pp. 93–119 7. Valentina M. Bondarenko, Ilya V. Ilyin & Andrey V. Korotayev. “Transition to a New Global Paradigm of Development and the Role of the United Nations in This Process” // World Futures, 2017’.

Chapter 44

The Construction of a Community with a Shared Future for Mankind, Chinese Investment in Africa, the Maghreb, and Tunisia Nizar Ben Salah

44.1 Introduction Chinese pragmatism, perfectly embodied by its leader Xi Jinping, exploits its main asset: its formidable economic power. Its third-world positioning allows it to gain ground in Southeast Asia, Latin America, the Middle East, and especially in Africa, with which relations have grown exponentially since 1955 (the Bandung Conference). The White Paper on China’s African Policy, published by the Chinese government in January 2006, states that “China is working to establish and develop a new type of strategic partnership characterized by equality and mutual trust in politics, cooperation, and collaboration, in a win–win spirit”. The Road and Belt Initiative, also known as the New Silk Road, was announced in 2013 by Chinese President Xi Jinping. It aims to connect China, by sea and land, to more than 90 countries (mostly developing countries) representing more than a quarter of global GDP. The planned sea route bypasses the Asian continent from the South to connect the Chinese ports to the countries of the Bay of Bengal, before crossing the Indian Ocean to reach East Africa. Four countries have ports on this route: Kenya, Sudan, Ethiopia, and Djibouti. Relations between China and the African continent are not new: there are 52 Chinese diplomatic missions in Africa and trade was estimated at 220 billion dollars in 2014 by the China-Africa Research Initiative (CARI) from Johns Hopkins University. It is these relations and exchanges that China seeks to promote with this project that will benefit exports of Chinese manufactured goods and raw material imports, according to Françoise Nicolas, Director of the Asian Center of the French Institute of international relations (FIIR). China is as attracted by commodities as by the consumer markets offered by the continent. N. B. Salah (B) Maghreb Economic Forum of Maghreb, Tunis, Tunisia e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_44

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44.2 I- the PRC in Africa: A Win–Win Under Pressure The People’s Republic of China represents the largest trading partner of the African continent and its largest donor. Despite the innumerable rumors about its methods and intentions, the reality is more contrasted than we would like to see. China’s presence in Africa is first and foremost political. It is rooted since the 1960s with Mao’s support of African independence. It is only by embracing the liberalization of the Chinese economy, initiated by Deng Xiaoping in the 1990s, that it takes a more economic face. Twenty years later, the rise of Beijing in the African economy has upset the balance, mostly for the better. In some parts of the economy, China has become unavoidable, winning a large part of construction contracts (roads, bridges, airports, housing estates). In this area, it works in time and at unbeatable costs. In exchange for concessional loans that it grants to its partners to finance projects, China signs lucrative contracts for the supply of raw materials. This is what we can call a “win–win” strategy. The implementation of the new Silk Road has been accompanied by a wave of funding for African countries. Between 2000 and 2015, China granted no less than $94.4 billion in loans to African countries. The “One Belt One Road” project also contributes to the African Union’s (AU) 2063 Agenda. It offers new funding opportunities for major integration projects in the continent for six decades. In fact, China plans to build 30,000 km of new roads in Africa. These investments should enable the continent to improve the density of its road network, which is the lowest in the world, with 7 km of road per 100 km2 . According to Qian Keming, China’s vice minister of commerce, the African continent will also have a port capacity of 85 million tons thanks to the new Silk Road. To this should be added more than 30,000 km of power transmission and transformation lines. These investments could help Africa reduce an infrastructure deficit that costs between $87 and $112 billion each year, according to African Development Bank numbers. The modernization of the continent’s ports, airports, roads, and railways will, above all, reduce transport costs on the continent, which are among the highest in the world. In 2016, a report by Infothep reported, for example, that “the transport of a container between Kampala (Uganda) and Mombasa in Kenya can take twice as much time and money than transporting it from London to Mombasa”. According to the World Bank, the lack of quality infrastructure limits the productivity of African businesses by 40%. The New Silk Road could therefore help reduce this shortfall. It could also boost GDP per capita growth in Africa from 1.7 to 2.6 percentage points per year, according to data from the Bretton Woods institutions. Finally, all these investments should have a positive impact on the employment sector and help reduce unemployment on the continent. According to a McKinsey report of June 2017, nearly 300,000 jobs have already been created in Africa by Chinese companies.

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The Multiplication of New Projects East and Southern Africa have seen a significant number of Chinese investments in infrastructure in recent years. Nearly $4 billion enabled China to link Djibouti to Ethiopia on nearly 756 km of railroad tracks. In Kenya, China Eximbank financed 90% of the construction of a railway line connecting the port city of Mombasa to Nairobi. Nearly $13 billion is being spent by China on expanding the rail network in the country. In Mozambique and Angola, major infrastructure projects are funded and developed by Beijing. In 2018, the Mozambican authorities inaugurated a suspension bridge over 680 m long over Maputo Bay for a total cost of $725 million. Ninety-five percent funded by China, the project was to be part of a road section to ensure “the connection between North and South Africa by road”. Between 2000 and 2014 China invested nearly $2.28 billion in Mozambican infrastructure. In Angola, the value of infrastructure projects implemented by China in 2017 exceeded $10 billion, according to Cui Amin, the Chinese ambassador to Luanda. The ports are also the subject of intense investment by the Chinese giant. Beijing provided 85% of the $580 million needed for the construction of the Doraleh multipurpose port in Djibouti. With the multiplication of these financings, it is “more than half of the investments planned by China within the framework of this new Silk Road which will go to Africa”, indicates Le Monde.

44.3 A Lesser Presence in the Maghreb More discreet than in Algeria, where the attraction of raw materials played a big role, the Chinese presence in Morocco and Tunisia could gradually develop. In April, a new strategic partnership was signed between Beijing and Rabat to deepen bilateral cooperation in all areas, with a particular focus on innovative niches. Moroccan entrepreneurs also campaign for the fairness of import taxes between Asian and European products. The latter benefit from a tax up to 10% lower, Morocco having the status of associate member of the European Union. In Tunisia, if the new government does not hide its desire to see China invest, it will also make efforts, such as reviewing its import quotas on vehicles, including Asian.

The Weight of Sino-Maghreb Economic Relations There are three biases to address Sino-Maghreb economic relations: direct investment, trade in goods (the trade balance excluding services) and services. We could add public development aid to the extent that these would be deducted from the cost

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of certain benefits. These aids may take the form of stadiums or operas most often erected to influence the commercial decisions of the recipient states. They can also take the form of interest rate subsidies when granting a buyer credit to a government using Chinese companies for an infrastructure project. In both cases, these are good business practices that directly or indirectly reduce the costs of the balance of goods and services. It is therefore of little importance for our purpose to be able to explicitly distinguish these rebates since they are already counted, although invisible. Regarding foreign direct investment (FDI), there is no information on possible Maghreb investments in China. In contrast, the Ministry of Commerce of the People’s Republic of China (MOFCOM) publishes annually on its website a Statistical Communiqué on Chinese Direct Investment Abroad which, since 2003, has identified Chinese FDI flows and stocks. For the Maghreb, this is very small. Thus, in 2015, it benefited from 0.14% of Chinese FDI that year, or 0.012% of the world total outward FDI. In 2015, Chinese FDI in the Maghreb was $203 million, eight times less than Ford’s planned investment to build a plant in Mexico before Donald Trump opposed it. It is not because Chinese companies are involved in infrastructure works in Africa, the Maghreb or elsewhere, that they “invest in infrastructure”, since they do not become owners or even holders of rights in this infrastructure. Both approaches generate financial flows in the opposite direction: when a Chinese company invests, it transfers funds to the recipient country; when a Chinese company provides services, it receives a payment from the recipient country. The definition of foreign direct investment retained by international organizations such as the OECD and the IMF, in order to be considered as an investor, implies “ownership of ten percent or more shares or voting rights of a company” and to want to be involved in the long-term management of this company. In the case of Chinese construction companies, their participation is simply the provision of services, as in the case of the “Angolan” package deals under which Chinese companies are paid for services (construction of a road or a dam) through privileged access to natural resources (infrastructures for resources).

Structure of Sino-Maghreb Trade Statistics show that the Maghreb trade with China followed the general trend of China’s trade with the world until the Libyan crisis and the setback, following the decline in Algerian crude oil and natural gas exports exacerbated by a sharp drop in oil prices. This observation immediately raises the question of the nature of the exchanges between China and the Maghreb countries. With regard to exports, from 1995 to 2015, Maghreb countries export very little to China (3% of their total exports), while exports to China have, for Africa as a whole, a triple weight (10%) and, for the world, a weight more than double (7%). On the other hand, during the same period, the share of exports of primary products (ores, metals, and fuels) in North African (89%) and African (86%) exports is almost identical,

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whereas it is only 25% on average worldwide. It is thus a characteristic specialization of the African continent, but which affects very differently the exchanges with China of each country taken individually. In the case of the Maghreb, three countries (Libya, Algeria, and Mauritania) almost exclusively export ores, metals, and fuels to China; they account for nearly 90% of Maghreb exports to China (hydrocarbons for Libya and Algeria, iron and copper for Mauritania). Morocco and Tunisia, for which exports of such commodities to China have only a small weight, exported only very poorly to China during this period. Except for Libya, these exports cover relatively poorly the imports of the Maghreb countries throughout these twenty years. If China is now present in all categories of products, the market shares that it conquers affect the traditional partners of the Maghreb countries differently. China has a virtual monopoly in the sale of motorcycles and cycles (75%) and clearly dominates the market in the sale of clothing (53%) although developed economies still occupy more than a quarter of the market. In telecommunications equipment, developed economies retain more than a third of the market (38%), just ahead of China (35%) while other economies are satisfied with a quarter (28%). It should be noted, however, that Customs records the value of imported products made in China which does not ipso facto imply that the manufacturer is necessarily Chinese or, if so, that it is more than one or more subcontractors that same reasoning applies to the category of motor vehicles dominated by more than two-thirds (70%) by producers in developed economies.

44.4 The Uprising in Tunisia: China is Back! In seeking to reposition itself geo-strategically, China is invited to deepen its economic relations with North Africa and, within this framework, to intensify its initiatives in favor of Tunisia.

Tunisia as a Hub The last Sino-African forum (held in Beijing in September 2018) probably marks the return of North Africa in general and Tunisia in particular in the Chinese radar: benefiting from the advantages offered by this region (i.e., geographical location, openness to the Mediterranean, a skilled and abundant labor force, the existence of a large middle class with relatively high purchasing power, attractive policies for FDI), China wanted to send clear messages, materialized by the increase in the budget for the countries of the region, including investments and aid to Tunisia. Even though it does not have significant natural resources, Tunisia offers Chinese exports a new destination and opens new markets. In addition, its geographical position could be exploited by China which would make it a “hub” facilitating a political and economic expansion throughout North Africa, especially to Algeria and Libya.

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On the other hand, by consolidating its ties with China, Tunisia will not only benefit from Chinese FDI flows accompanied by technology transfer, but also from the economic aid and technical assistance that Beijing will provide, as it has always done for other African countries that have cooperated economically with China.

Perspectives of Tunisia-China Relations China-Tunisia relations began in the 1950s with the ratification of a first trade agreement that made Tunisia one of the first countries in the North Africa region to establish trade links with China. With a view to promoting these emerging economic links (and following the ratification of several successive trade agreements between the two countries), a Sino-Tunisian Joint Committee for Economic, Commercial and Technological Cooperation was created in 1983. More recently, relations between the two countries led to the signing, on July 11, 2018, of a memorandum of understanding sealing the accession of Tunisia to the Chinese initiative of “the New Silk Road”, promoted by the Chinese President Xi Jinping since 2013, which will allow Tunisia to open up new opportunities for development in terms of trade, tourism, but also in terms of much needed investments in the country. The two countries have thus given undertakings to strengthen their partnership, in a win–win logic and as part of a South-South integration approach. But great progress remains to be made. Indeed, as bilateral cooperation between China and Tunisia should continue to flourish in the future, the two countries have begun to recognize the importance of air transport. A memorandum of understanding on air transport had already been signed in 2014 to allow the Tunisian national airline to fly 21 direct flights per week to China. However, to date, Tunisair does not serve any Chinese city! The possibility of a growing partnership in the field of renewable energies is also mentioned. According to the Africa Economic Development Institute, although Europe and the United States continue to dominate the energy sector in Tunisia, Chinese companies have recently begun to break into this market. As Tunisia seeks to develop its renewable energy sources, Beijing could take advantage of this opportunity to strengthen its roots in Tunisia. The fields of information and communication technologies, aeronautics, and automotive are also an opportunity to be seized by Tunisia in order to promote its strategic partnership with China. Recall in this context that Morocco, a neighboring country whose potential is similar to that of Tunisia, launched last year the project of the industrial and residential city “Mohamed VI Tangier Tech-city”, for an amount of $1 billion, which will serve as a basis for the establishment of Chinese enterprises specializing in the abovementioned fields. Multiple domains can be a catalyst for a strategic partnership between China and Tunisia, namely tourism, information technologies, high value-added industries, defense, renewable energies, and agribusiness. In this regard, a lot of effort will have

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to be made by Tunisia, in order to attract the maximum FDI, to correct the imbalance existing in its commercial relations with China and to strengthen the monetary and financial relations with this country.

Suggested Reading He Y. (2009). “Yiguo kailu” (Open the way abroad), Zhongguo qiyejia (The Chinese entrepreneur), No. 24, pp. 62–64. Mao Z. (1954). Mao Zedong zhuan 1949–1976 - shang, Biography of Mao Zedong 1949–1976, vol. 1, Beijing, Zhongyang wenxian chubanshe, 2003, p. 561, http://cpc.people.com.cn/GB/69112/ 70190/236641/16618563.html. MOFCOM (Ministry of Commerce, 2016). Moluoge qiche chanye gaishu (Overview on the automotive industry in Morocco), January 18, 2016, http://ma.mofcom.gov.cn/article/ztdy/201601/ 20160101237004.shtml. Pairault Th. (2013). “Chinese Enterprises under the Direct Supervision of the Government Illustrated by their Investment in Africa”, Review of the regulation, n ° 13, 1st semester / Spring 2013, §16–21, http://regulation.revues.org/10195. Pairault Th. (2017). “Algeria: What Chinese Economic Presence? In A. Adel, Th. Pairault and F. Talahite (dir.), China in Algeria: socio-economic approaches, Paris, Eska, p. 33–68. UNCTAD (2016). Regular Shipping Connectivity Index, annual, 2004–2016, https://unctadstat.unc tad.org/wds/TableViewer/tableView.aspx. https://www.jeuneafrique.com/26443/economie/dossier-chine-afrique-entre-mythes-et-r-alit-s/.

Chapter 45

Building Community Between China and Latin America and the Caribbean as a Key to Social Development Esteban Zolezzi

Regional integration has been part of the history of Latin America and the Caribbean since its process of independence from Spain around 200 years ago. Since the nineteenth century with leader Simon Bolivar, the debate over development has included ideas on regional integration and ways to achieve it. The goal of economic and social progress in the region has constantly been linked with plans to work together, have a sense of community, and build a shared future. Throughout the decades the region has been continuously moving back and forth from an integration focus on social issues to another that gives more importance to commerce and economic development. Today, Latin American countries have changed the position of the region on integration, moving towards trade, giving special interest to strengthening bonds with regions beyond the United States as a way to achieve development and stable growth. The disappearance of UNASUR, the growth of the Pacific Alliance, especially after the United States withdrew from the Trans-Pacific Partnership, the discussions over the signing of the TPP-11, the joint negotiations between Central America and Korea that have led to the signing of Free Trade Agreement, and the agreement between MERCOSUR and the European Union are some of the main events that have happened only in the last couple of years that have shifted the scenario in Latin America. In this process China is playing an important role. With a population of 1.3 billion, China is the world’s second largest economy, the largest if measured in purchasing price parity terms, and has become the largest single contributor to world growth since the global financial crisis of 2008. Since 2005, China signed a Free Trade Agreement (FTA) with Chile, which not only was the first FTA with a Latin American country, but the first FTA between China and a single country, instead of a regional group. After that China signed Free Trade Agreements with Peru and Costa Rica, the last E. Zolezzi (B) Latin American Faculty of Social Sciences General Secretariat, San Jose, Costa Rica e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_45

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one being the first Central American country to sign this type of agreement with China. Today China represents 12.5% of world trade and it has become the second largest trading partner with Latin America, after the United States, being responsible for 10% of total exports of the region and 18% of total imports. China has become a great contributor of investment, giving more than 89 loans to Latin American countries between 2005 and 2018, which amount a total over $140 million, mostly invested in energy, infrastructure, and mining projects. Most recently China has commenced a major global effort to bolster its global position through a plan known as the Belt and Road Initiative (BRI), which includes Latin America. China and economies that have signed cooperation agreements with China on the BRI (henceforth BRI-participating economies) have been rising as a share of the world economy, which translates into China becoming a promoter of cooperation and alliances aimed at the development of a global infrastructure that will improve progress in the regions involved. The accomplishments that will be made by BRI could certainly consolidate the position of China in the world. According to the World Bank, BRI infrastructure improvements could increase total trade among BRI economies between 2.5 and 4.1 percent. The impact of the initiative, according to the World Bank, will promote the consolidation of long-standing agreements and open markets. China’s BRI then could become an important factor to the promotion of trade cooperation in a world where other big economies are moving away from multilateralism. However, it is important that the Chinese development programs and cooperation agenda go beyond the economic sphere and the creation of infrastructure related to the promotion of trade. Although these are key areas that have led to economic growth, it is also important to establish initiatives that could help bring that development to all social groups of the countries involved and contribute to achieving the 2030 Agenda for Sustainable Development. Is not possible to think about progress and development without talking about inclusion, access to basic resources, the defense of human rights, equality, and sustainability. A more integrated and comprehensive perspective would have to be generated from more direct communication between the government of China and the different communities in countries with which China is cooperating. This includes listening to communities by developing initiatives with different social groups and sectors, as well as working with international organizations that could help China understand the different problems that affect communities and how to create projects that would contribute to the solution of social issues in different countries and regions. In order to do this, China and Latin America and the Caribbean need to identify opportunities to learn from each other to build a community with a shared future. Today the world is experiencing a period where the main issues are no longer local or regional, but global. A stepping-stone in this process of new relations is to understand and learn from each other to overcome these issues together. The effects of climate change have provoked disasters that cannot be considered “natural” because they are caused by the direct or indirect action of humans, which has led to the rise of the temperature of the planet: a rise in floods and droughts that are damaging crops, reducing access to water and food; an increase of extreme

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storms that are destroying homes; and the presence of forest fires in the Amazon and Africa that are killing an important part of some of the main lungs of our planet. The advancement of the Fourth Industrial Revolution is promoting innovation in all industries like never before. Previous industrial revolutions liberated humankind from animal power, made mass production possible and brought digital capabilities to billions of people, but this Fourth Industrial Revolution is, however, fundamentally different. It is characterized by a range of new technologies that are fusing the physical, digital, and biological worlds, impacting all disciplines, economies, and industries. The resulting shifts and disruptions mean that we live in a time of great promise and the world has the potential to connect billions more people to digital networks, dramatically improve the efficiency of organizations and even manage assets in ways that can help regenerate the natural environment, potentially undoing the damage of previous industrial revolutions. However, organizations might be unable to adapt; governments could fail to employ and regulate new technologies to capture their benefits; shifting power will create important new security concerns; inequality may grow due to a rise in unemployment; and societies may fragment (Schwab, 2017). The population around the world is taking to the streets as a way showing the social discontent triggered by income inequality, corruption, the gender gap, and human right issues, among others. Since 1980, the share of national income going to the richest 1 percent has increased rapidly in North America, China, India, and Russia and more moderately in Europe, according to the World Inequality Report 2018, while the World Economic Forum has presented that the global gender gap will take 108 years to close and that economic gender parity remains 202 years off. At the same time the perception of corruption in the vast majority of countries have made little to no progress and only 20 have made significant progress in recent years, according to the Corruption Perception Index 2018, made by Transparency International. The protests happening in cities around the world show that the population is demanding changes on these issues and that it is important to think of ways to allow development to reach everyone (Fig. 45.1). Finally, despite the global problems faced today, there is a clear political trend that seeks to move countries away from multilateralism and regional integration. The European Union is dealing with the political, social, and economic instability brought about by Brexit, while the United States is re-negotiating Free Trade Agreements and has withdrawn from the Trans-Pacific Partnership under a campaign to recover its former economic and productive independence. In this global scenario, Latin America and the Caribbean are particularly vulnerable. The region is dependent mainly on exportation of commodities like petroleum, copper, and soybeans, while trade is mostly focused on the United States, a country that in 2017 represented 44.76% of total exports and 32.13% of total imports within the region, according to the World Bank. In 2017, the number of people living in poverty reached 184 million (30.2% of the population) of whom 62 million live in extreme poverty (10.2% of the population, the highest percentage since 2008), according to the report “Social Panorama of Latin America 2018” prepared by the Economic Commission for Latin America and the Caribbean (ECLAC). The same report shows that Latin America and the Caribbean also continue to be the most

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Fig. 45.1 Income inequality is rising or staying extremely high nearly everywhere top 10% income shares across the world, 1980 ~ 2016 (Source Inequality.org, 2019)

unequal regions in the world, presenting an average Gini Index higher than Africa and almost a third higher than Europe and Central Asia. The region has made efforts to overcome social issues. The World Economic Forum in the Social Progress Index Report 2018, which analyzes areas like access to education and health, inclusion, freedom, quality of life, infrastructure, and environmental impact, among other factors, showed that most Latin America and the Caribbean countries have reached a middle-high level of Social Progress, with the exception of Costa Rica, Chile, and Uruguay, which have a high-level, and Bolivia, which has a low-level. The positions achieved so far have not changed much during the last years, which increases the fears of stagnation due to the “Middle Income Trap”. However, the vulnerable situation that Latin America and the Caribbean continues to have is increasing concerns over the effects of global problems on the region’s opportunities to achieve its potential for social development. By September 4th, 2019, a total of 2.5 million acres of forest were destroyed during the forest fire in the Amazon in Brazil, Bolivia, Paraguay, and Peru, according to Greenpeace, which has set not only environmental problems but has damaged relations between Brazil and France, jeopardizing the agreement between the important South American block MERCOSUR and the European Union. Climate change is costing around 17,000–27,000 million dollars a year and could reach 100,000 million dollars in 2050, affecting children, women, older populations, and farmers, according to the report on Climate Change and Sustainable Development in IberoAmerica, presented at the XXVI Summit of Ibero-American Heads of State and Governments in Guatemala on November 2018 (Fig. 45.2). The riots in Venezuela, Nicaragua, Chile, and Ecuador, are paralyzing these countries, generating a level of instability that could be contagious in the region and that could impact investment and growth. The presence of drug production and trafficking

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Fig. 45.2 Percentage of workers in occupations with high risk of automation (Source IADB, 2018)

has increased the level of violence, corruption, and social problems in several countries in the region like Peru, Colombia, México, and Central America, a subregion that despite not being a producer of illegal drugs is an important corridor for drug traffic. The increase of violence and political instability has provoked a rise in migration within Latin America and from Latin America to the United States, including the migration of 4 million Venezuelans in 2019, according to the UN Refugee Agency (UNHCR). The effects of automation during the Fourth Industrial Revolution are also increasing the vulnerability of the region. The Inter-American Development Bank in 2018 showed that in Latin American countries more than 60% of workers are at high risk of losing their jobs due to automation, especially in Guatemala and El Salvador, where 75% of the working population are at risk of being unemployed due to this global trend. The Chinese experience presents an opportunity for Latin America and the Caribbean to reduce its vulnerability in these areas and continue a path of development. Building a community between China and Latin America and the Caribbean is a key for social development. China has proved there is more than one model of development and governance on the path to success. According to data provided by the World Bank, since 1978 China’s GDP growth has averaged nearly 10% a year, which is the fastest sustained expansion by a major economy in history, and more than 850 million people have lifted themselves out of poverty. In this sense, China has created long term plans to promote building infrastructure that is key for the country’s development, inclusion, poverty reduction and social progress, especially in areas like transportation and agriculture. In the past decades, China developed irrigation and water conservation projects; constructed county and township highways through the Food-for-Work program; built 244,000 km between 1994 and 2002 for the 8–7 National Poverty Reduction Program, which aimed to lift 80 million people out of poverty in the seven years from 1994 to 2000; and has begun to put into operation over 25,000 km of dedicated high-speed railway (HSR) lines since 2008, far more than the total highspeed lines operating in the rest of the world. The experience of China developing

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plans to reduce poverty and promote inclusion through infrastructure sets an example for Latin America and the Caribbean. The Chinese experience also sets an example regarding technology, innovation, research, and development. According to the Council on Foreign Relations, China’s investment in R&D is growing at an annual rate of 18%, which means that at this rate by 2030 the country will be investing a bigger percentage of GDP in R&D than the United States. The rise of Chinese technology companies like Huawei and the launch of “Made in China 2025”, a state-led industrial policy that seeks to make China dominant in global high-tech manufacturing, are impressively moving China from being a developing country to a leader in innovation and new technologies, a path that Latin America and the Caribbean need to follow to face the Fourth Industrial Revolution. Unfortunately, China’s intensive growth in the past decades has also brought an increase in CO2 emissions from the country, which is contributing to the effects of climate change, and therefore is an aspect that should be a concern for the future of the country and the world. According to the United Nation’s Emission Gap Report 2018, China was responsible for 26.8% of total emissions in the world in 2017, which almost doubles the amount emitted by the United States, the second most contaminating country on the planet. China today is moving towards clean energy and has obtained a leading position, not just in the manufacturing sector, but also in the innovation and deployment of renewable energy technologies, and now has become one of the best countries for renewable energy investment, accounting for more than 45% of the global total in 2017. However, the country is still highly dependent on oil imports that have been growing steadily, and the levels of air contamination in major cities is still a big challenge to overcome. In this area Latin America and the Caribbean have made efforts that deserve to be analyzed. Costa Rica and Chile have declared the goal to be carbon neutral by 2021 and 2030 respectively, making efforts to create new national parks, use clean energy sources, and promote electric public transportation. Chile has launched the second biggest fleet of electric buses in the world and Costa Rica is functioning for the second year in a row with 98% of its energy coming from renewable sources. Strengthening the bonds between China and Latin America and the Caribbean beyond economic factors will help all to learn from different solutions to the global problems the planet faces today.

45.1 Education as a Key Factor in Social Development China is betting on a new type of international relations that features a win–win cooperation in political, economic, security, cultural, and all other aspects of China’s cooperation with the rest of the world, which aims to replace confrontation with cooperation and the zero-sum game with win–win results. This approach seeks that countries help each other in times of difficulty and assume both rights and responsibilities in pursuit of a community of common destiny for humanity, through a strategy

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that involves mutual respect and equality; sovereignty, independence, and territorial integrity; the pursuit of mutual benefit and common development; to help one another through thick and thin and develop mutual trust; and to step up exchanges and mutual learning in an open and inclusive spirit. In this spirit, the best way to promote ideas present in this new strategy is through education and giving space for the voices and the knowledge of the different societies both inside and outside nations. Education is key for social mobility, development, and for successful economic insertion into the international market. The production and promotion of new knowledge created by including different sectors to exchange ideas and experiences on common issues, innovate and promote new knowledge, new programs to form leaders and open discussions and forums, is the base to discover new solutions and actions to create a global community for the shared future of humanity. According to the World Bank, education promotes employment, earnings, health, and poverty reduction and there is a 9% increase in hourly earnings for one extra year of schooling. Education also drives long-term economic growth, promotes innovation, strengthens institutions, and fosters social cohesion. Making effective investments in people’s education has to be a key goal for the global community on the road for developing the human capital that will end extreme poverty. The work with international organizations is essential to promote education, develop new programs, forums, and conferences that seek to create new knowledge and prepare leaders for this new type of international relations. In the case of Latin America and the Caribbean, organizations like the Latin American Faculty of Social Sciences (FLACSO) have a unique position that could be beneficial for China. This intergovernmental organization has a 62 years history in the development of research and leaders in social sciences and is currently present in 13 countries in the region. It has been dedicated to the promotion of education and the production of knowledge in issues like poverty, inequality, access to resources, gender equality, discrimination, international cooperation, and sustainable development. The institution has more than 98 programs, doctorate, masters, and specialties, and has taught more than 13,000 people all over Latin America, because FLACSO has made its mission to promote education in these issues as a key to generating positive change and developing public policies that aim to achieve regional progress, social inclusion, and the Sustainable Development Goals. FLACSO’s reputation and cooperation with other regional organizations like the Central American Integrated System (SICA), the Development Bank of Latin America (CAF), the Iberoamerican General Secretariat (SEGIB), and the Bank for the Central American Economic Integration (BCIE) make communications with organizations such as this an important step to allow China to achieve all its potential in the international community and effectively be a contributor to a progress of the world that goes beyond economic factors. The promotion of best practices in teachers’ continued education, the creation of guidelines for cities to eradicate discrimination, racism, and xenophobia in Latin American cities, the production of new knowledge to rethink the way Central America is dealing with drug trafficking, as well as the creation of spaces of discussion and

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workshops is part of the work done by FLACSO for the creation of knowledge. The organization has made efforts to incorporate regions and countries outside Latin America in this process, for example by co-organizing seminars to promote the relations between the region and Korea, and by being the regional partner of Japan in the exchange program Together!!Japan. In this sense, China’s position of creating a global community and thinking about the shared future of humanity appreciates it. All regions and countries need to encourage working together to create knowledge, innovate to face global issues, have a more educated and empowered population, and promote human rights and social development, so growth and prosperity reach everyone.

Suggested Reading ACNUR (2019). “Situación Actual de Venezuela”. https://www.acnur.org/situacion-en-venezuela. html. Baniya, Suprabha; Nadia Rocha and Michele Ruta (2019). “Trade Effects of the New Silk Road”. Policy Research Working Paper 8694. http://documents.worldbank.org/curated/en/623141547 127268639/pdf/Trade-Effects-of-the-NewSilk-Road-A-Gravity-Analysis.pdf. Center for International Relations and Sustainable Development (2015). “A New Type of International Relations - Writing a New Chapter of Win-Win Cooperation”. https://www.cirsd.org/ en/horizons/horizons-summer-2015--issueno4/a-new-type-of-international-relations---writinga-new-chapter-of-win-win-cooperation-. CEPAL (2019). “Panorama Social de América Latina 2018”. https://www.cepal.org/es/publicaci ones/44395-panorama-social-america-latina-2018. CLACDS de INCAE (2019). “Índice de Progreso Social 2019”, https://www.incae.edu/es/clacds/ proyectos/indice-de-progreso-social-2018.html. Gallagher, Kevin P. and Margaret Myers (2019), “China-Latin America Finance Database”. Washington: Inter-American Dialogue, https://www.thedialogue.org/map_list/. Greenpeace (2019). “Cifras actualizadas: 2,5 millones de hectáreas quemadas en el Amazonas”. https://www.greenpeace.org/argentina/issues/bosques/2438/cifras-actualizadas-25millones-de-hectareas-quemadas-en-el-amazonas. Inequality.org (2019). “Global Inequality”. https://inequality.org/facts/globalinequality/. Interamerican Development Bank (2018). “El futuro del trabajo en América Latina y el Caribe”. https://publications.iadb.org/publications/spanish/document/El-futuro-del-trabajoen-Am%C3%A9rica-Latina-y-el-Caribe-%C2%BFUnagran-oportunidad-para-la-regi%C3% B3n-(versi%C3%B3n-interactiva).pdf. OECD (2018). “China’s Belt and Road Initiative in the global trade, investment and fi nance landscape”. OECD Business and Finance Outlook 2018, https://www.oecd.org/finance/Chinas-Beltand-Road-Initiative-in-the-globaltrade-investment-and-finance-landscape.pdf. Schwab, Klaus (2017). “The Fourth Industrial Revolution”. World Economic Forum, https://www. weforum.org/about/the-fourth-industrial-revolution-byklaus-schwab. Segib (2019). “Informe Cambio climático y desarrollo sostenible en Iberoamérica 2018”. https:// www.segib.org/?document=informe-cambioclimatico-y-desarrollo-sostenible-en-iberoamerica. Transparency International (2019). “Corruption Perception Index 2018”. https://www.transparency. org/files/content/pages/CPI_2018_Executive_Summary_EN.pdf. United Nations Environment Program (2018). “Emissions Gap Report 2018”. http://wedocs.unep. org/bitstream/handle/20.500.11822/26895/EGR2018_FullReport_EN.pdf.

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World Bank (2010). “China: Infrastructure, Growth, and Poverty Reduction”. Shanghai Poverty Conference: Case Study Summary, http://web.worldbank.org/archive/website00819C/WEB/ PDF/CASE_S-4.PDF. World Bank (2019). “China’s Experience with High Speed Rail Offers Lessons for Other Countries”. https://www.worldbank.org/en/news/pressrelease/2019/07/08/chinas-experience-withhigh-speed-rail-offers-lessons-forother-countries. World Bank (2018). “Overview: Education”. https://www.worldbank.org/en/topic/education/ove rview. World Economic Forum (2019). “Gender Gap Report 2018”. http://reports.weforum.org/global-gen der-gap-report-2018. World Integrated Trade Solutions (2017). “Latin America & Caribbean Trade at a Glance”. https:// wits.worldbank.org/CountrySnapshot/en/LCN/textview.

News Articles Castro, Johnny (2019). “Costa Rica superará 98% de generación eléctrica renovable por quinto año consecutivo”. La República. https://www.larepublica.net/noticia/costa-rica-superara-98-degeneracion-electrica-renovable-por-quintoano-consecutivo. España, Sara (2019). “Ecuador se retira de Unasur y abre la puerta a nuevas iniciativas de integración”, El País. https://elpais.com/internacional/2019/03/14/america/1552524533_4 46745.html. Fernandez, Oriana (2018). “El plan que busca convertir a Chile en el segundo país con más buses eléctricos del mundo”. La Tercera. https://www.latercera.com/nacional/noticia/plan-busca-con vertir-chile-segundo-pais-mas-buseselectricos-del-mundo/219064/. Miller, S (2017). “Donald Trump keeps campaign promise to abandon Trans-Pacific Partnership”, Washington Post.https://www.washingtontimes.com/news/2017/jan/23/trump-pull-out-transpacific-partnership/?utm_source=GOOGLE&utm_medium=cpc&utm_id=chacka&utm_cam paign=TWT+-+DSA&gclid=EAIaIQobChMI8IXLnfij5QIVT9yGCh3iQgeWEAAYASAAE gKFvfD_BwE. Van Overstraeten, Benoit (2019). “France will not sign Mercosur deal under current conditions: minister Borne”. Reuters. https://www.reuters.com/article/usfrance-mercosur/france-willnot-sign-mercosur-deal-under-current-conditionsminister-borne-idUSKBN1WN0LD. Schwartz, John (2018). “Más inundaciones y sequías extremas a causa del cambio climático”, New York Times. https://www.nytimes.com/es/2018/12/14/cambio-climatico-inundaciones-sequias/.

Chapter 46

The Construction of the Community of Human Destiny and the International Relations Eduardo Daniel Oviedo

The Community of Human Destiny1 is China’s government’s proposal for building a new type of international relations. Also, it is a teleological objective of Chinese foreign policy, in order to join the wills of states to change the international order and the international system. For this reason, this paper explains why China proposes this idea, what the Community is, and seeks to think about what kinds of changes China proposes in international relations. The hypothesis asserts that China’s rise produced changes in the international order, but China still lacks enough power and consensus to change the order and system. In addition, the Community of Human Destiny is part of the Chinese academic trend of building concepts and ideas to enrich international relations theory, although there is still no Chinese doctrine for explaining and understanding this field of knowledge.

46.1 Why Does China Propose the Community? The international rise of China and its great power status both show us that China has transitted from the Global South and the Periphery to the Global North and the Centre. Thus, this country became a new pole of the international system. This new international status of China required the Chinese government to establish strategic relations with other members of the international community and form 1 While the Chinese official translation has popularized the name “Community with a Shared Future for Mankind” in English, the “Community of Human Destiny” is the most faithful translation from Chinese to English.

E. D. Oviedo (B) National Scientific and Technical Research Council, Buenos Aires, Argentina e-mail: [email protected] National University of Rosario, Rosario, Santa Fe Province, Argentina © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_46

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a trans-civilizational alliance, for the purpose of increasing its national power and construct a Pax Sinica when having the enough capacity and favorable conditions at the external level, with the teleological aim of changing the world order and principles of the international system. To implement a Pax Sinica, China needs the relevant strength and persuasive ideology to convince other States to accept the legitimate basis of China’s dominant position in the international system. The Community of Human Destiny, the Belt and Road, and other initiatives are political instruments to consolidate this new pole among the great powers. Therefore, the current behavior of China orients its diplomatic actions towards reaching the first place in the world order (as a maximum limit of national interest) or maintaining the status of the second largest country in the world (as a minimum limit of national interest). Also, China seeks to avoid putting in practice the “gunboat diplomacy” and colonial policy used by great powers in the past. The long-term challenge is executing its teleological objective without using force. In order to show that China is different from Western powers, Chinese diplomacy emphasizes the peace, development, and Confucian terms in international affairs (Sun, 2016).

46.2 What is the Community of Human Destiny? In 2012, President Hu Jintao first proposed the Community of Human Destiny at the 18th CPC National Congress. In his speech, President Hu stated: “In promoting mutually beneficial cooperation, we should raise awareness about human beings sharing a community of common destiny. A country should accommodate the legitimate concerns of others when pursuing its own interests, and it should promote common development of all countries when advancing its own development” (Hu, 2012). It can be seen that two main words, destiny and interest, appear in this paragraph. In 2017, in his speech at the United Nations Office in Geneva, President Xi Jinping emphasized that building a Community of Human Destiny is the project of China (Xi, 2017a, b). President Xi also admitted that the Community should include some principles of the system of Westphalia, such as the principles of equality and sovereignty (Xi, 2017a, b). Several months later, Professor Zhao Kejin (2017) said: “The theoretical value of the Community of Human Destiny lies in correcting and transcending Western modernization road, theory, and institutions existing from modern times. It is a road innovation, theoretical innovation, institutional innovation, and cultural innovation”. In March 2018, the first meeting of the 13th National People’s Congress amended the Constitution, and the phrase “to build a Community of Human Destiny” was included in the twelfth paragraph of its preamble. Recently, Zhang Shaoyi (2019) affirmed: “The Community of Human Destiny is a vision of order, but also a vision of values; it is a community of interests and a community of values; it is a community of responsibility and a community of action”.

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The CPC Central Party School (2018) explained China’s initiative in an article published by the Guangming Daily. The School identifies four foreign orientations: first, promoting major-country diplomacy with Chinese characteristics; second, creating good external conditions for the great rejuvenation of the Chinese nation; third, deepening and enriching the strategic thinking of peaceful development; fourth, promoting the building of new international relations, building a Community of Human Destiny. This last point is the core focus of the initiative.

46.3 Change of Order or Change of System, or Both? The teleological aim of the Community of Human Destiny is related to establishing new international relations, that is, changing the world order and the international system. Specifically, international relations have four fundamental changes: (1) changes of system; (2) changes in the system; (3) changes of order; and (4) changes in the order. The international system is a polyarchy of states that interrelate in a decentralized structure of power, regulated by the principle of coordination. Whoever wants to “change the system” has to change its units, structure, or principle. This occurred with the collapse of the European medieval system in modern times, caused by the radical transformation of the three components. The states, the decentralized structure, and the principle of coordination of the Westphalian system replaced the diarchy of the Papacy and the Holy Roman Empire, the centralized structure, and the hierarchical principle of the medieval system, respectively. A similar situation occurred when the Western powers destroyed the Chinese tributary system after the Opium Wars (1839–1860). Therefore, changing the system implies changing its three components, becoming it in a revolutionary political change of international relations. “Changes in the system” are modifications that do not radically transform the units, structure, or principles of the system. For example, collective security. It was the main innovation of the system and was put into practice in the Covenant of the League of Nations and continued in the Charter of the United Nations. Such has been its impact on international relations that renowned academics, like Kaplan (1957) and Kissinger (2001), erroneously argued that collective security eliminated the system based on the balance of powers. However, although collective security is a novel mechanism in the Covenant and the Charter, the balance of power continued being the infrastructure of international relations during the interwar period (1918–1939) and after the Second World War. Collective security, which is defined as a permanent alliance with flexibility in decision-making in the face of future and uncertain conflicts, requires the consensus of the States and appears in every international issue limited by national interests, power relations, and balance of forces. It is not a change of system, but a relevant change in the system, because international relations remained regulated by the political principle of equilibrium and the behavior

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patterns of the states established by international law. In addition, colonialism and decolonization are other two significant changes in the system. The two other kinds of changes are related to the international order. They refer to the “changes of order” and “changes in the order”. Detecting the causes that produce these changes is a central issue in the current debates of international relations theory. An international order shows how states stand in the structure of the international system (Waltz, 1979), and the consequent configuration of relations of forces in a historical time. These relations are regulated by the political principle of equilibrium and international law, that is, a set of legal norms and principles that compile the political behaviors of states in a specific historical moment. The balance of power prevents countries unilaterally changing the international order and provides subsistence capacity to the system. It is a political principle that mechanically reorganizes relations between states, preventing a single country from controlling the entire system and subsuming the other countries in a world empire, such as Adam Smith’s “invisible hand” adjusts the economy. Therefore, unipolarism, that is, the concept of monopoly of the economy transferred to international relations, is irrelevant to the international system, insofar as a unipolar order implies the preeminence of one state over others as a supranational force, returning the system to its predecessor version, that is, the European medieval system or the Chinese tributary system (Oviedo, 2003: 52–72). In principle, the international order changes when change the capacities of great powers in the structure. But, how to differentiate “changes of order” and “changes in the order”? A “change of order” occurs when the power and legitimacy of the principal states are radically modified. The power of the states is based on the material and immaterial capacities (Morgenthau, 1984), and its evolution through time generates the dialectic of the rise and fall of the great powers (Kennedy, 1997). Legitimacy confers reasons or arguments to the power configuration, granting stability to the system, and a way of consensual governance. As the orders are dynamic, the historical evolution of the international system shows that the change in the power relations, and the questioning of the legitimate basis of the established order, open the way to transform the order into its two main modalities: revolutionary (or change of order); and reformist (or change in the order). The last revolutionary change of the international order (that is, change of order) occurred in 1991, when the political disintegration of the Soviet Union put an end to the bipolar world and shaped the order of US primacy. However, although the collapse of the Soviet Union led to the end of the Cold War, the rules and institutions shaped during the Second World War remained after order expired, and certain regions, like East Asia, maintained the same political structures. From the beginning of the Westphalian system, there were changes in the system, changes of orders, and changes in the orders (which finally all are also changes in the system), but without change of system. At present, the Chinese peaceful rise produces changes in the international order, given that China is the second largest economy in the world, and it co-manages the order with other major powers. However, China has not been able to change the order, that is, to move from a Pax Americana to a

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Pax Sinica (or another kind of order with or without Chinese primacy), since China still lacks enough strength and consensus to do so. China has even less power capacity for changing the system. From a teleological point of view, we are tempted to think that China seeks to eliminate the Westphalian system and impose another system, as revenge for the “century of humiliation”. This is an almost impossible task, due to the resistance capacity of the system. In fact, China should replace some of its main components, that is, the units, power structure, or the principle of coordination. Westphalian logic has always automatically deterred all hegemonies that wish to eliminate the system. This is the immense capacity of the international system to integrate countries, socialize them, and maintain their interrelations through established political and legal principles. To date, there has not been a Pax Sinica or a revival of the Chinese tributary system. However, China’s rise is relevant, and it enters into the challenge phase to the Pax Americana (change of order); although internal factors, such as the Taiwan issue, limit the action capacity to solve firstly the problem of national unity. To achieve Chinese unity, in the same way that Italian unity and German unity in the second half of the nineteenth century, is today the central objective of its foreign policy.

46.4 The Great Dilemma: Interest Versus Destiny Since the relations of States are based on a community of interests, there is a deep divergence between the Community of Human Destiny and international relations. The key issue is the confrontation between destiny, which is part of the Great Unity thought, and interest, which organizes relations between states in the Westphalian system. The Community emphasizes a common destiny. However, if we agree that destiny refers to things that cannot be dominated by human force, analyzing destiny is useless academic work, because, according to Confucius, destiny is destined (Analects, 14.36). In fact, people, nations. and humanity do not know their destiny. So how can human beings build a community of destiny if they do not know their own destiny? How to move from the community of national interests to the community of human destinies? Who determines human destiny without supranational institutions of global governance? How can national leaders represent everybody else’s destiny? On the other hand, if we adapt Confucius’s concept of interest to modern times, due that interest is limited to the goals pursued by small persons (Analects, 4.16), then capitalism should be an economic system composed of small people; while the international system, based on defending national interests, is an immoral system, composed of “small countries”. As interests classify into common interests and conflicting interests (Fiedrich, 1968), also destinies should have two faces: common destinies and conflicting destinies. The Community of Human Destiny, the “Manifest Destiny” of the United States, and the respective claims of other countries about their own “destinies” are contradictory. In addition, other countries may be reluctant to take part in the

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“common destiny” proposed by China; unless the specific manifestations of the destiny represent the interests of these countries and, in this case, the other party must obtain potential gains to cooperate. In this way, the community of destinies returns to the community of interests. Just as national interests guide state relations in the international system, China hopes that human destiny serves to agglutinate the new global relations. However, while national interests have become a reality, the doctrine of human destiny has not yet been implemented. In addition, Confucian determinism about destiny does not help us to establish new principles of global relations. We can understand national interests in detail; but the destiny of humanity is something that people cannot control, it is inscrutable and there is no way of understanding it through reason. Thus, until now, the Community of Human Destiny is an abstract idea, supported by the principles of the Westphalian system.

46.5 The Future Perspective China emerges as a reformer of the international system, but the new principles that this country proposes for global governance have not yet been observed in practice. Naturally, this happens because China has had an underdevelopment of international relations in recent history, but this situation is changing quickly. Since the 1980s, when China focused on foreign book translations, the study of international relations has passed to analyze Western doctrines at the end of 1990s, and nowadays Chinese scholars seek to enrich the international relations with Chinese concepts and ideas. This trend, surely, will grow if Chinese power continues to rise. Similar to when international relations passed from Europe to the North Atlantic, after power ceased to be in the hands of European countries and was led by the United States. This transfer of power was accompanied by the migration of international studies, which were established in the United States and gave life to the main doctrines of international relations. Probably, China will become an epicenter of international relations studies in the future, but this field of knowledge has not reached its maximum expression in this country yet. The Community of Human Destiny is a particular sample of how Chinese academics are seeking to contribute to the study of international relations with its own doctrines.

Suggested Reading Central Party School Research Center for Xi Jinping Thought on Socialism with Chinese Characteristics in the new Era, “Major Theoretical and Practical Transformation of China’s Diplomacy”, Guangming Daily, September 19, 2018.

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FIEDRICH, Carl J., El hombre y el gobierno. Una teoría empírica de la política, Tecnos, Madrid, 1968. HU, Jintao, Report to the Eighteenth National Congress of the Communist Party of China, Beijing, November 8, 2012. KAPLAN, Morton, System and Process in International Politics, John Wiley and Sons, New York, 1957. KENNEDY, Kennedy, Paul, Auge y caida de las grandes potencias. Plaza & Janes, Barcelona, 1997. KISSINGER, Henry, La Diplomacia, Fondo de Cultura Económica, México, 2001. MAQUIAVELO, Nicolás, Obras Selectas, Editorial Gredos, Madrid, 2011. MORGENTHAU, Hans, Política entre las Naciones. La lucha por el Poder y la Paz, Grupo Editor Latinoamericano, Buenos Aires, 1984. OVIEDO, Eduardo Daniel, “Análisis del concepto multilateralismo en la política internacional”, Diplomacia 94. 52–72. Sun, Yanfeng, Confucian Philosophy and a Community of Shared Future for China and Latin America, China Institutes of Contemporary International Relations: Beijing, 2016. The Analects od Confucius, Chinese version. WALTZ, Kenneth N., Theory of International Politics, Random House, New York, 1979. XI, Jinping, “Work Together to Build a Community of Shared Future for Mankind”, United Nations Office in Geneva, January 18, 2017. XI, Jinping, “Work Together to Build a Community of Shared Future for Mankind; Speech at the United Nations Office in Geneva”, Xinhua News Agency, January 19, 2017. Zhang, Shaoyi, “A Community of Shared Future for Mankind: A ‘Chinese Approach’ to Protecting World Peace and Development”, Jiangxi Daily, March, 25, 2019. Zhao, Kejin, “The Concept of A Community of Shared Future for Mankind and a New Direction for China’s Diplomacy”, People’s Forum, Beijing. December, 20, 2017.

Chapter 47

Cooperation of the International Community for a Common Future of Mankind Rakez Ali Mahmoud Al Zareer

47.1 Introduction This research comes within the framework of the initiatives of the State of China in launching a dialogue of civilizations among the various components of the international community and in the 70th anniversary of its celebrations of the Chinese revolution and its efforts in developing the common humanitarian dialogue to build a more secure, stable, and prosperous future for humanity. In this context, the international community, especially the developing countries, including the Arab world, face more overlapping challenges in various fields and sectors of society, and comes at the forefront of these challenges change as an impact of globalization, because of its great effects that apply to all components of society and its systems. This is why it has become more urgent for societies to cooperate with each other to increase the well-being of their peoples. Therefore, cooperation among them has become imperative and must be taken seriously. International cooperation has positive repercussions in many technological, cultural, industrial, economic, and political aspects, as well as its protection. Human rights, collective and peaceful security, and its positive impact on the reduction of global terrorism. From this standpoint, this research will address this research to clarify these reflections on communities, as this research focuses on a statement and exploring the challenges of international cooperation. The cooperation of the international community for a common human future is an important topic, so it is necessary to discuss and present it in a scientific and logical manner.

R. A. M. Al Zareer (B) Center for Strategic Studies, The University of Jordan, Amman, Jordan e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_47

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In this regard, it will be divided into five main topics. The first will deal with international cooperation and its technological, cultural, industrial, economic, and political repercussions for a common human future. Secondly, the international community will cooperate in protecting human rights for a common human future. International security and the UN’s role in achieving collective security will be discussed: international cooperation in the fight against terrorism for the future of a common human through the third section, the fourth section will talk about international cooperation in the fight against terrorism for the future of a common humanity, while the fifth will talk about the future challenges facing humanity.

Objectives and Justifications for the Selection of Research Interest in writing about the subject was given the growing importance of the State of China and its substantial role in communicating human civilization and its cooperation with the international community in a common future of a civilized and safe for man industry in the world today and in the future and dialogue for community cooperation and the humanitarian challenges facing the common future of human society.

Research Problems Problems or searches arise by answering the following questions: 1. What are the foundations of international technological, cultural, industrial, economic, and political cooperation and their implications for the common human future of a common human future? 2. What is the cooperation of the international community in the protection of human rights for a common human future? 3. What are the principles of international cooperation for collective security and the role of the United Nations for a common human future? 4. What are the principles of international cooperation against terrorism for a common human future? 5. What are the future challenges facing the common human future? Methodology The following approaches will be used: A Survey Methodology: The findings of previous studies on this subject were examined in order to identify a clear legal concept regarding the subject of the study.

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B Follow the analytical method: In order to come up with a logical scientific conception, through reference to books, literature, and study literature.

47.2 The First Topic International Cooperation in the Technological, Cultural, Industrial, Economic, Political Fields and Its Impact on the Future of Humanity Preface States and societies seek to cooperate among them, and this cooperation is reflected on the technological, cultural, industrial, economic and political aspects and on the international relations of the modern state, and thus many positive benefits result from this cooperation, and will be exposed to these aspects through this topic, and will be divided into the following demands: political implications, technological implications, cultural reflections, implications Industrial, economic Implications.

The First Requirement: Political Implications The political repercussions on the state in general indicate a decline in the importance of the state, and the emergence of new centers of global political decision as countries tend to voluntarily or compulsorily abandon traditional manifestations of sovereignty. The world has witnessed very important events, which contributed to the change of the international system, most notably the adoption of the policy of reconciliation between the United States and the Soviet Union, the end of the Cold War between them in the eighties of the last century, and the signing of arms control agreements between the then US President Ronald Reagan and the Soviet President Mikhail Gorbachev. The demolition of the Berlin Wall is in 1989. “Neighbors in One World” is a documentary slogan for a new and emerging system in which states are set to lead a constructive pattern as a small global village of nations, emphasizing the need for a common value system, a global civil ethical system, and enlightened leadership that leads people alongside One international. Politics has become globalized as well as the economy, and politics has been liberated from the control of the electorate, and from the authority of the state and the rulers at the same time. Decisions are no longer formulated by governmental institutions and representative bodies but have become a global affair. The transformations that we are experiencing today are radically and uniquely transformed by the modern world, and the transformation of modern economies into a sophisticated integrated within which the dynamics of expanding the exchanges

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of goods, technology, services, capital, and communication tools through networks linked to each other, and in this sense necessarily assume structural changes to the standards of functional performance of the state. The state whose economy is internationalized, globalized, or integrated into the globalized economy network falls into the general system of the internationalized or globalized domain, which is governed by various standards of the Qatari national state, and here the state reaches the emptying of its sovereign essence The nationalist, because they often give up its sovereignty in the area of legislation because the national economy has been globalized and internationalized and is completely dependent upon international cooperation mechanisms. One of the most important disadvantages of globalization is the total abolition of national and regional personality and the fusion of this personality in a global figure, i.e., it relates from the private to the public and the individual loses his authority, abandoning his affiliation and loyalty and get rid of his roots and the total abolition of national and regional culture and find psychological alienation between man and his history and the civilizational heritage. He inherited from his fathers and grandparents with the creation of a new form of culture made of all human beings and not specific to people in their own geographical areas. The total abolition of national interests, especially when they conflict with the interests of international cooperation and its currents in all fields, and the displacement of international cooperation to wide openness and combat any restrictions that prevent it from what we seek to reach, especially when the opponent is unable to defend his interests and even to protect its gains, and the transformation of the local entity into a weak, fragile, and incoherent entity, especially when this weakly developed local.

The Secord Requirement: Implications Technological Technological repercussions are the most important fruits of international cooperation. The tremendous progress China has made in the world of technology at economic costs has enabled many scientific societies to use the technology that has made human and social rapprochement between different cultures, peoples, and civilizations possible and traded daily throughout the earth. A tremendous achievement within the framework of the role of technological China in the development and modernization of humanitarian and community cooperation at the level of social and humanitarian comprehensive, and has benefited Third World countries. Everyone is also aware that the educated and trained man, whether a scientist, technologist, economist, or skilled worker, is the most valuable asset of any nation and dearest wealth, and that many Arab countries spend millions to prepare these cadres, both at home and through missions abroad, as cadres are the most capable and the most efficient and best to bear the burdens of construction and advancement, if provided the material and moral capabilities, even a minimum and placed in the right place and in the right location. It also continues to be the transfer of appropriate technology

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and the development of technologies that respond to the needs of the modern national state. Technological advancement is one of the factors that contributed to the emergence of the phenomenon of international cooperation. The world is now entering the age of information and new technology in the fields of space, armaments, microelectronics, genetic engineering, and renewable energy. This development has led to a major transformation in the international community, especially in the field of management and economy. The largest financial and productive institutions can be managed through the Internet and telecommunications devices, so that the problem of borders, distances and others does not occur. These techniques have facilitated the institutions to obtain any information that concerns them about the prevailing conditions [7]. The technological and scientific revolution has been represented in the developments in the means of communication and means of information, images, and ideas, one of the most important changes witnessed in the world since the second half of the last century, which affected the social, economic, political, and cultural conditions in the world, and contributed to the removal of borders and border divisions between countries and communities. This is one of the most important means of globalization of the world, and perhaps one of the most important features of this revolution is that it is universal in nature and has worked to eliminate the distinction between human beings regardless of where they live, and also features that it focused on culture to become the focus of attention, and adopted by one culture The form of a threat to the nations and cultures of peoples that is proud of their own culture and local, which derive their identity and the elements of her personality. The persistence of the technological gap between developed and developing countries will maintain the dominance of industrialized countries in the field of information for many years, and will be affected by developing countries, including Arab countries, to become unable to maintain their political independence and cultural security because of the technological superiority of the West, and they will become vulnerable to persistent and sharp breaches of beliefs, ideas, and ideologies. Conflicts with their political, social, and cultural systems. The future struggle will be geared towards controlling technology, so the group that controls Internet technology will be able to dominate the world in the future. The market and competition in this era are practically oriented according to Darwin’s theory of survival of the fittest. This means that the nations and peoples that are unable to compete will be doomed to extinction. This is due to the large gap between developed and developing countries in technology. As for the positives at the technological level of the local national state, it offers international cooperation even a specific outlet to benefit, and perhaps participate in the revolution of communication technology, information and informatics, and the spread of communication technology may support cultural diversity within culture where it allows all cultural groups within societies to express themselves. Privatization of the media and allowing the private sector to invest may deepen democracy and support civil society institutions.

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The Third Demand: Cultural Reflections International cultural cooperation is the emergence of a world without cultural boundaries where ideas, information, news, and value and behavioral trends are freely transmitted globally, with minimal interference by states. The international cooperation with respect to aspects of cultural phenomenon is a new old and derives its specificity from several intellectual and value judgments and behavioral developments emerged clearly during the nineties and comes at the forefront of these developments, the openness of the different world cultures and their influence and influenced by each other and did not happen in history that the cultural and civilizational areas, including becoming The most isolated and desirable cultural areas are as open and exposed as they are currently open and exposed. This cultural openness occurs for the first time in history, as the cultural manifestations of international cooperation are beginning to materialize clearly through the following. – The tremendous development in communications and information technologies such as satellite TV and the Internet, and the rapid spread of concepts, values, and ideas across continents without limits. However, in the history of mankind, there has been no such openness and discovery that has led to the inability to control the flow of these ideas, values, and concepts. – Freedom of movement of information, trends, tastes, and free circulation of news, with millions of people united on television and telephone, through e-mail and the Internet. – The free flow of people through growing tourism has never happened in the history of mankind, noting that this growth has so far been one-way, perhaps due to income inequality among nations. – The spread of consumer culture and youth globally has not happened in history that the world is coming to the symbols of consumer culture and data as it is now, because the commodity of Western culture in general and the American in particular is the most popular in the world and exist everywhere and in all societies, however poor, consumer culture and associated values and trends. The peoples of the Third World have fallen prey to a popular culture exported by America, an invasive culture, not an elite culture, especially the loss of the element of cultural parity. This American culture finds great popularity among the young people in our Arab-Islamic world, and they bear responsibility in the future. The result of the lack of non-emotional scientific planning to plant national culture in them, and here we must not forget the role of the American media in all its symbols from Hollywood where the film industry to the American television where the news industry, and to the American press where the opinion industry. What can be seen as the most prominent aspects of negative value system level is the cultural identity ingestion blur and transform the majority of human beings to consumers and disrupt the creative energies of the forces of the less influential.

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The Fourth Requirement: Industrial Implications These development strategies adopted by most countries were not feasible. These countries shifted from semi-self-sufficiency to full and absolute dependence on foreign sources and did not lead to increased exports from manufacturing industries, but continued their dependence on strategic industries, especially oil. Absolute dependence on the industrial sector of the Arab countries is characterized by a clear fluctuation due to two reasons. The first is the domination of strategic industries based on the extractive activity of oil and gas, mainly with a limited number of mineral and non-metallic ores whose output is semi-directed. The second is the weak and nondiversified production base in general. Non-petrochemical manufacturing industries are still based on light industrial activities including food, textiles, clothing, and to a lesser extent machinery and transport equipment. These industries are set up in small enterprises. As for oil, it is the main source of industry in the Arab countries as an economic commodity, and a material for various industries, its various derivatives, uses and economic and political importance are increasing over time as a strategic and vital material in the foreseeable future, and become a driving force for the economic process, and the best sources of energy from the economic, technical and environmental The countries of the world, primarily America and the industrialized countries, are in control of its resources to prevent the threat of its interests. The Gulf Arab countries are the main source of oil in the world, and the reserves that are at the forefront compared to global reserves.

The Fifth Demand: Economic Repercussions Of course, the economic repercussions are the most important fruits of international cooperation, and have benefited Third World countries, including Arab countries, and through the research I will review the fruits of international cooperation in the economic aspect. International economic cooperation is the emergence of a world without economic boundaries, where economic activity is taking place globally through transcontinental companies, which are not subject to traditional border controls, and manage all of its production operations in isolation from countries. Increased rates of global trade, movement of technology and capital, cross- border employment, a significant increase in the number of multinational corporations as they move towards merger and conglomeration to create entities and increase interdependence and interdependence between markets and global financial exchanges and the spread of privatization and liberalization of the movement of trade and services and the emergence of the so-called hotlink economy.

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The super-powers take full control of the local markets and exert all their power to reach weak local entities and are crushed and transformed into subordinate institutions, marginalizing some countries, especially those that cannot integrate into the crucible of international cooperation and participate in the global economic acceleration, which is unable to address the imbalances. The structure of its economy is thus exposed to the dangers of staying in the last steps of the global economy, and all countries of the world will be subject to new market rules, which will affect Third World countries, especially in the reconstruction phase, because this global economic system will increase the movement of refugees from the south to the north. One of the most important advantages of international cooperation is that it leads to openness and break down barriers between societies, which opened the door to increase the growth resulting from the free exchange of goods and services, helped by the presence of a group of international institutions that emerged at the beginning of the twentieth century, which helped to stabilize the global economy and growth. Capitalist in world trade. The international cooperation and economic will lead to the expansion and prosperity of world trade, which reported a number of states and countries, where growth in world exports increased in the period between 1970–1993 AD. As for the Arab economy, especially in light of the international cooperation and the dependencies of the WTO agreements, it is in one way or another the same exposure to industries in developing countries, which will intensify competition among them to access their products and industrial services to global markets. These countries must adapt to the World Trade Organization (WTO) in cooperation with the World Bank and its affiliates, the International Monetary Fund (IMF) and the International Organization for Standardization (ISO) in coordinating economic policies globally. This means that these institutions have an absolute domination of all development, including the industrial sector. Some of the various exceptions in the Uruguay Conventions, which allow developing countries to impose restrictions on trade and support domestic industries in specific cases, but only if the efforts of the countries themselves are coordinated globally.

47.3 The Second Topic Cooperation of the International Community in the Protection of Human Rights for a Common Human Future The idea of human rights is a social construct linked to its existence around human origin or human existence itself. On the other hand, the idea of human rights is linked in its existence to how to meet the requirements of human beings and how to achieve a decent life for them. The needs to be met include all the basic needs of the individual Survival, including biological, psychological, or material needs, the need for work or creativity, as well as the right of an individual to have a privacy that no one may infringe upon or violate, and in this sense human rights are a legal basis on which to

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base themselves. Then to meet those basic needs or other individual. For example, Article 25 of the Universal Declaration of Human Rights, which obliges society to meet the individual needs of food, drink, and shelter, as well as the contents of the following articles of the Universal Declaration of Human Rights, 10 December 1948. This topic will be divided into a set of demands, which are as follows: human rights and the universal declaration, democracy, and civil society principles.

Human Rights and the Universal Declaration The discussion of this demand can be divided into the following three points (the definition of human rights, the Universal Declaration of Human Rights, as well as the strengthening of civil society).

Definition of Human Rights In the United Nations Human Rights: Questions and Answers of 1987, human rights are described below. Human rights in general can be defined as those inherent in nature, without which we cannot live as human beings. Human rights are based on the steady demand of humankind for a life in which the inherent dignity and value of every human being are respected and protected. . The introductory statement is believed in the Universal Declaration of Human Rights, which states that “respect for human rights and human dignity is the foundation of freedom, justice, and peace in the world”. . Human rights are universal in nature and apply to all people without discrimination. Respect for human rights is always a duty to promote and under all circumstances and political systems, the human rights of any individual or group may not be restricted under any circumstances unless they threaten similar rights or corresponding to others. . The United Nations was established as an organization in 1945. The leaders meeting then stressed the need to include human rights provisions in the UN Basic Charter. The drafting of the UN Charter came in light of the political turmoil that prevailed in the world. These principles on human rights, so it was reflective of the negotiating efforts between participation in the emergence of the United Nations and several non-governmental organizations texts. currently, as a result of the growing steadily in the organizations concerned to monitor the human rights situation, the spread of ideas of human rights, it has become more acceptable among omnes and appeared dozens of movements that defend human rights so that it became difficult to find state now openly hostile to human rights. . In 1993, Pfina held the International Conference on Human Rights and Cultural Relativism, which was held in order to find tools for how to establish human rights concepts as a practice.

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The Universal Declaration of Human Rights The Universal Declaration of Human Rights (UDHR) is the primary reference in any definition of human rights or anything related to it. This Declaration was issued on 10 December 1948, without a vote in the presence of a group of world leaders at the time and with the blessing of Pope John Paul II. The Declaration is the cornerstone of a long and arduous road for humanity to take to achieve a better quality of human life on Earth. According to Dean Cassin, who is the de facto father of human rights, this Declaration is the beginning of a long way to lay the foundations of equality and justice among human beings. It is also the starting point for any HD has its organization later.

Strengthening Civil Society Through the articles of the Universal Declaration of Human Rights and guarantees of the right of individuals to freedoms and organization as well as international conventions and constitutions.

Democracy and the Principles of Civil Society Of hard facts, that the institutions of bi-building process linked to the nature of the objective to be achieved from behind the building, institutions do not have a value in itself, but derive their value from a job entrusted to its completion, since there is no there is a relationship between the provision of appropriate democratic system conditions or not The institutions and capacities that they use to achieve the goals described by the ruling elites are institutions that promote democratic development and allow for political participation, institutions that strengthen social control, political direction and persuasion. Ideological coercion, mobilization, and mobilization of citizens without genuine participation on the part of them, the question of the nature of the ideology, which adheres to the ruling elites and political culture prevailing in society naturally in search of the purpose for which institutions were built. (Ali Eddin Galal). In the light of the political culture prevalent by the ruling elites, as well as the ideology that circulates them within the framework of society, the nature of political institutions, whether democratic or authoritarian, is determined. In this sense, determining the concepts of democracy and civil society is necessary to determine the value of institutions, especially civil society institutions, for any democratic construction and democratic practice.

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Civil Society The concept of civil Society appeared first in Greek thought where Aristotle referred to it as a “political group is subject to the laws” which he did not distinguish between the state and civil society, the state in the old European political thinking meant civil society represents a political grouping whose members are citizens who recognize and act on the laws of the state, and developments related to civil society can be highlighted as follows. The concept then developed in the eighteenth century with the crystallization of capitalist relations of production, where the distinction between the state and civil society appeared. The issue of the centralization of political power was raised and the social movements were the right mode to defend against the dangers of political tyranny. At the end of the eighteenth century, it was emphasized in Western political thought that the state should be reduced to the benefit of civil society, which must manage its own affairs and leave little to the government. In the nineteenth century, a second shift in the concept of civil society took place. Karl Marx considered civil society to be the arena of class struggle. In the twentieth century, Gramsci raised the issue of civil society in a new concept whose central idea is that civil society is not an arena for economic competition but an arena for ideological competition, starting from the distinction between political control and ideological authority. With the maturation of capitalist relations in Europe in the seventeenth and eighteenth centuries and the division of society into classes with different or conflicting interests and the intensification of class struggle, capitalism (i.e., the ruling class), the bourgeois class, had to develop effective mechanisms to manage and contain this conflict to ensure the interests and stability of society. European capitalism has already succeeded in achieving this goal through two mechanisms: the direct control mechanism by the state apparatus, and the ideological and cultural body mechanism through social non-governmental organizations in which individuals engage in voluntary activity to solve their caste and societal problems. The importance of the “ideological hegemony” mechanism is that it affirms the responsiveness of the various social groups to the values of the capitalist system and their acceptance and practice to defend their interests within it, thus ensuring the ability of the ruling class (capitalism) to manage the conflict in society in order to support the foundations of the system. Capitalism and its ideology, as a result of this development, we are faced with three different but at the same time integrated concepts: society, political society, civil society, society is the most comprehensive framework that contains human beings and regulates the relationship between them in a specific economic and social framework Developed through the relationship of its groups and conflicts, while the political community is the society of the state, which consists of the state and its organs and organizations and political parties that seek to control or pressure them. Civil society consists of individuals and informal bodies acting as actors in most educational, economic, family, health, cultural, charitable, and other fields. Civil

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society consists of bodies called sociology in secondary institutions, such as NGOs, labor and professional unions, businesses, chambers of commerce, industry, and the like. The advocacy of civil society is intended to enable these NGOs to assume greater responsibility in the management of community affairs in order to become a largely self-administered and thus exclude the concept of the first social institutions The family, tribe, clan, ethnic, sectarian, or religious group, excludes political and governmental institutions, and remains within civil society institutions and NGOs whose activities are based on volunteerism. It is important not to conclude from this definition that there is absolute conflict between civil society, official society or the state. There can be no strong civil society under a weak state but rather two complementary components that distinguish between the distribution of roles and not complete separation. The exclusion of political parties from the definition of civil society does not mean that they are completely out of the matter. In fact, as the vanguard of social forces that express their interests and seek to reach the authority of the state, the parties are very interested in civil society institutions and seek to recruit from their ranks. Occupied by the movement of political parties.

Definition of Civil Society An interwoven fabric of relations between individuals on the one hand, and between them and the State on the other, which are based on the exchange of interests and benefits, contracting, mutual consent, understanding, differences, rights, duties and responsibilities, and holding the State accountable at all times when it is necessary to hold them accountable, this fabric of relations calls to be feasible, that is embodied in various voluntary social institutions, economic, cultural and human rights constitute the basic rule that a whole focus on the legitimacy of the state on the one hand, and a means accountability if needed. Civil society is largely independent of direct state supervision. It is characterized by autonomy, spontaneous organization, individual and collective entrepreneurship, volunteerism, enthusiasm for the public interest, and the defense of the rights of vulnerable groups. Individualism on the contrary is a community of solidarity across a vast network of institutions. Opinion settled through academic and field studies and historical follow-up to its emergence and development, civil society is “a group of free voluntary organizations that fill the public sphere between the family and the state, that is, between kinship institutions, and state institutions, which have no room to choose in their membership”. The interests of its members or to provide services to citizens or to practice various humanitarian activities, and in its existence and activity is committed to the values and standards of respect and compromise, tolerance, participation and sound management of diversity and difference.

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Civil Society in This Sense Has Four Basic Components . . . .

Free or voluntary action. Presence in the form of organizations. Accept diversity and difference between oneself and others. Not to seek power.

Components of Civil Society Civil society institutions are included in any organized community organization based on regular membership according to general purpose, profession, or volunteer work. The membership is not based on genetics, blood ties and primary loyalties such as family, clan, caste, and tribe. Therefore, the most important components of civil society are: . . . . . . . . . . . .

Professional unions. Trade unions. Social movements. Cooperative organizations. Private associations. University clubs. Free press, media, and publishing. Research centers, studies, and cultural associations. Sports and social clubs. Youth centers and student unions. Chambers of Commerce, Industry, and Business Groups. Defense and development NGOs such as the Human Rights Women, Development and Environment Centers.

The Importance of Civil Society The importance of civil society and the maturity of its institutions is increasing because of its role in organizing and activating the participation of people in determining their destinies and facing the policies that affect their livelihood and increase their impoverishment, and its role in spreading the culture of creating self- initiative, the culture of institution building, the culture of uplifting the citizen’s affairs, and the emphasis on the will of the citizens and attract them to tolerance and contribute effectively to the achievement of major transformations of societies so as not to leave the monopoly of the ruling elites, the historic act. Civil society is an arena of conflict within the political, trade union, and intellectual institutions of capitalist society, in which the “bourgeois class” exercises its cultural dominance or escalates the anti-working class hegemony. The working class and the toiling classes have to face the prevailing capitalist and cultural ideology with a counter-culture, thus enhancing the independence of civil

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society institutions and their role in protecting ordinary people from the power of the state, and their ability to exercise collective solidarity against them, thus enabling them to pressure. Gramsci argues that civil society in this sense is one of the pillars of democracy and plays an important role in building it and supporting its development.

47.4 The Third Topic International Security and the Role of the United Nations in Achieving Collective Security The First Requirement: The Concept of International Security By effectively implementing it, the international security system eliminates the possibility of the use of force and armed violence in international relations because the mere threat of the use of force by the international community against any state contemplating aggression will prompt it to refrain from engaging in risks that it already knows will be the losers. If, for example, State (a) threatens State (b), State (c), (d), (e), (f) and (g) must take action on behalf of the international community as if State (a) threatens all by threatening state B and vice versa and one to all and all to one is the password in this system. The following pillars of the international security system can be identified. 1. The existence of an international organization which undertakes to protect international peace and security and is a tool of the collective security system and works to achieve the objective of the system. The first organization to embody this system was the League of Nations, which was established by the Treaty of Versailles, followed by the United Nations at the present time, which, in Article 1 of its Charter, affirmed the maintenance of international peace and security. 2. One of the necessary commitments of the international security system is the willingness of states to fight for the continuation of the existing order and the member states of the international organization should be ready to go to war to maintain a system that protects peace in the world. 3. The international security system is to function in a neutral and non- favorable manner, governments must be objective in dealing with issues that affect world peace and security and should not use their emotions as a means of expressing their positions. For example, France should be prepared to defend Germany. Britain should be willing to participate in collective sanctions against the United States or against the Russian Federation. International security does not recognize traditional friendships or chronic hostilities and does not allow alliances with or against alliances. A state must have already pledged to defend each other. Confidence is an essential prerequisite for the success of this regime. On the contrary, the international security system will be untrustworthy since the international security system cannot function unless the policies of states are motivated by confidence in the regime. It takes the political faith of states to place their trust in the system without prior proof of the regime’s success and effectiveness.

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4. The international security system requires a fundamental universal membership. All states should join this system and not exclude enemies as well, since international security does not know a potential aggressor, but it assumes that any State may become an aggressor. Any particular threat raises national concern. If countries exclude the source of suspicion or anyone expected to be aggressive, it means that the membership of the regime will be limited. 5. International security system assumes the possibility of creating a major or a tyrant to resist the aggressor force so that will not be in the power system, which is defended by the collective will of the challenge. It is worth mentioning here that the international security system came to achieve the desired purpose in providing opportunities to establish world peace instead of the balance of power as the balance of power is based on the fact that conflict is the norm in international relations while the international security system is based on the rule that international relations is cooperation assuming that there is a full and complete homogeneity between the national interests of the countries and the achievement of international peace and stability while connecting forces between stability and the interests of the nation states balance system.

The Second Requirement: International Security as an Approach to World Peace The necessary assumption necessary for international security is that wars are likely to occur and are bound to be prevented. Conflicts between states may be the product of wild passions or the result of masterminded planning and may be an equation for the settlement of international disputes. The means of abilities and calculations for the realization of the objectives of the invasion and the war may be waged on the democratic will of people living under the control of high in the national gap in addition to other reasons that may lead to the emergence of wars was the main idea on which the United Nations United is the maintenance of international peace and security and the Security Council is the executive tool to achieve this idea he is working on behalf of all members of the organization and in accordance with its purposes and principles of relying on the aid provided by the member to the implementation of the measures taken in deciding which.

The Third Requirement: The United Nations and Its Role in Achieving Collective Security The United Nations uses the concept of collective or international security to mean in practice collective security measures, which are the principle of collective action among members of the international organization in order to maintain international peace. In order for the collective security system to achieve its objectives, this requires

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the establishment of a scientific organization that uses force to support international peace. The protection of international peace cannot be achieved through the establishment of a strong and effective system of collective security and put at its disposal all the possibilities of armed force to ensure international respect. It also has the function of maintaining international peace and security, solving international problems and disputes by peaceful means in accordance with the principles of justice, international law and solidarity to face aggression in solving the failure of peaceful issues in resolving the conflict, developing friendly relations between States and making the mother M the reference for coordinating the work of the States. With regard to actions taken in cases of threats to the peace and breaches of the conflict and aggression, starting with article 39 in Tahrir, what happened to the threat and breach of the peace is a blatant aggression and a gradual article 44 to take measures that do not require the use of armed forces and to the work of article 42, which allows the use of force to maintain peace and international security or to restore it. Article 41 provides that the Security Council may decide on measures to be taken that do not require the use of armed force to implement its resolutions. It may request any Member of the United Nations to apply such measures, including the partial or public cessation of economic reforms and rail transportation, in accordance with Article 43. Members of the United Nations must pledge to place at the disposal of the Security Council the necessary armed forces or to determine the number and types of forces and the strength and stability of the units established by the Security Council. Mentioned In Chapter VII of the Charter, which was dedicated in full for everything related to threats against international peace and acts of aggression committed by some states against others. Nothing in the Charter shall preclude the establishment of regional organizations or agencies dealing with matters relating to the maintenance of international peace and security. Regional action shall be appropriate and appropriate as long as such regional organizations or agencies and their activities are compatible with the purposes and principles of the nations, such as the League of Arab States and the Organization of African States. The United Nations succeeded in intervening in some international crises and prevented its development into a conflict in which major international parties intervened, such as the Suez crisis of 1956, which was the first crisis facing the United Nations in a way that could lead to a general war, where an international emergency force was formed, which assigned its leadership to General Kennedy. The United Nations intervened again in the Congo crisis in 1960, which threatened a violent armed conflict involving the major powers themselves. The UN intervention prevented the development of this conflict by sending international emergency forces to Congo to benefit the regime and internal stability and prevent the civil war into a conflict between the major powers. In addition to the success of the United Nations in these international crises, the Gulf crisis has demonstrated the great success of the United Nations in interfering with serious international crises that threaten international peace and security (the first and third Gulf crisis).

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The salient feature of the Gulf crisis is the renewal of the United Nations. The Security Council has been able to play the role that the Charter entitles it to act as an organ responsible for the security of the international community. New terms have emerged to deal in light of the new world order lost one world safe, international compatibility, the balance of interests at the expense of the balance of power and the danger of the arms. The collapse of the Cold War around the United Nations from a mere propaganda platform to a new era is based on mutual understanding and cooperation among members of international relations, but the United Nations has not reached its peak that will lead the world and bring about world peace and security, especially after the collapse of the Soviet Union and the world has become unipolar. The United States has become indirectly in control of the United Nations. This is represented by the United States’ departure from international law and has not complied with the UN resolutions regarding the (Third Gulf Crisis), the war against Iraq and the regime change. Facilities. The Security Council within the United Nations took out many resolutions during the Gulf crisis, starting with Iraq entering Kuwait and ending with the fall of Baghdad, such as resolutions 660, 678, 687, and 1441. All of these resolutions have been active in promoting international peace and security and no country has the right to attack another country without any serious reason. It may be the United Nations body that the use of all means, whether military, economic, and therefore repelled this war and return the situation as it was previously of security and peace.

47.5 The Fourth Topic International Cooperation in Combating Terrorism for a Common Human Future There is a lot of efforts must be made to reduce the phenomenon of terrorism, there are a lot of efforts at the national level must be made, the school and educational and recreational institutions, the government and many organizations have a duty to do in order to mitigate this dangerous phenomenon, and there are efforts and international protocols conventions and treaties have obliged many countries to eradicate this phenomenon from its roots. Here is the international community joining together for this, and it is working that this phenomenon does not recognize the natural borders of countries, it does not have natural geographical boundaries, Wahhab from its roots. To further elaborate on this topic, the researcher will divide it into two requirements, which can be summarized as follows: the first requirement: what is international cooperation and international cooperation to combat terrorism; the second requirement: the impact of terrorist acts on the principle of international cooperation.

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The First Requirement: What is International Cooperation and International Cooperation to Combat Terrorism There is international cooperation in the fight against terrorism, since it is natural for States where terrorism is spread through security services to cooperate in combating terrorist operations, confronting terrorists and exchanging information and expertise, which is the first line of defense against terrorist organizations. This cooperation takes place because all States are threatened and these terrorist organizations achieve a great deal of cooperation among themselves, and in order to detail about this requirement we will divide it into two items, namely: military confrontation, government data and political solution.

Item 1: Military Confrontation The state may be able to eliminate terrorists, through direct military strike against those responsible for terrorism mainly revolve around the armed units and the police. In order for the strike to be successful, whether at the local or international level, it is necessary to have the exact information and the ability to attack accurately. There are types of strikes, including pre-emptive strikes. It requires thwarting hostilities and preventing them from happening and causing losses. The caliphs and governors of the Umayyad and Abbasid periods met the extremist movements, the esoteric movements, the Qarmatis and the Hashish who rebelled against the caliphate by sending armies to fight them and suppress their activities.

Item 2: Government Data and Political Solution Any government should follow and implement some necessary measures as it deems appropriate in order to combat or reduce terrorism on its territory, the most important of which are the followings. 1. To Tighten Control Over the Main Entrances of the Country Such as Ports and Airports to Prevent the Entry of Terrorist Elements and Tools into the Country. 2. Make a comprehensive recording of terrorists to identify them and try to infiltrate their ranks. 3. Gathering information about terrorists and anti-government regimes through its security and intelligence services and following up organizations both inside and outside the country. 4. Making a good system for guarding important buildings and buildings and reinforcing their walls with alarms. 5. Acting in the discovery of terrorist elements that succeed in infiltrating the country.

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6. When forced to impose a curfew, it must declare the reason for it, and not to prolong the curfew, so as not to lead to sympathy for the families of terrorists, which helps them to implement their plans. 7. Not to increase the number of security measures, especially at airports, because this may give the impression of instability of internal security, must solve the difficult equation to achieve security while satisfying travelers and citizens. There is no doubt that the absence of democracy in any country of the world is one of the most important reasons for the emergence of terrorism, where it does not allow the emergence of new leaders, and currents of conscious thought, and life seems hopeless, while under democracy, peoples have all their political rights, and established independent political parties, and declared, which works in broad daylight. Political parties represent all trends, principles and ideas and issue newspapers without restriction, allowing anyone considering reform to achieve their goal of joining and working through a party. Hence, he does not need secret work in the dark. Each of these parties has an equal opportunity to explain its principles and objectives through its newspapers. Completing the march of democracy allows groups to exercise their activities and express their views freely through legitimate channels, thus opening the door for discussion of their views and ideas without interference from official bodies. Thus, the argument of defenders of terrorist groups is dropped. One of the most important manifestations of democracy is the right of the nation to change. This is the year of life. One of the main reasons for the change of officials is that the official’s long stay in power will be vanity. Vanity exposes him to mistakes and disregard for people. The elimination of terrorism can be achieved through a political solution that involves accepting certain basic and just demands of certain groups and communities of the people, thereby eliminating the causes of the controversy that arose from terrorism. International cooperation in combating terrorism through the provision and exchange of information, especially in light of the Fourth Industrial Revolution and advanced technology through which terrorist groups and extremism can be pursued, is certainly an effective effort by the State of China in the areas of counter-terrorism cooperation. Advanced and advanced technology for the follow- up of terrorist activities and their advanced and expected role in the field of cybersecurity technology “cybersecurity” which has become an effective means to protect societies in various fields of security, economic, and social individuals.

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The Second Requirement: The Impact of Terrorist Acts on the Principle of Joint International Cooperation Numerous terrorist operations such as assassination, threats, and kidnappings have been known for a long time, these operations are prepared and carried out by independent individuals against government and social figures because of their relationship with government and social activities. Terrorism as an international crime affects the interests of two or more States or disturbs the international order. Terrorism can be classified as an international crime in four cases: . When the terrorist or the persons against whom the terrorism is practiced are nationals of the same or different countries, but the crime is carried out outside the borders of the countries to which the perpetrator and the victim belong. . When the act of terrorism is directed against persons who enjoy international immunity. . When a terrorist act is prepared in one country and executed in another. . When a terrorist act is carried out in one country and the terrorist comes to another country and begins to search for it. The methods used by contemporary terrorists are very different. If in the past terrorism was limited to assassination or the addition of government and social figures and diplomats, it has now taken various forms, such as theft of airplanes, hostagetaking, disruption and detonation of transport routes and means of movement, as well as the bombing of residential buildings and circuits, public institutions looted arms and stores and occupation of embassies and raiding the international social public places and headquarters of international organizations. International cooperation in the fight against terrorism has become particularly important in the face of this widespread terrorism and the dangerous methods and means used by terrorists. Cooperation among States continues to establish a legal basis for countering terrorism. International governmental and non-governmental organizations participate in this cooperation. As it is imperative to join together countries in order to combat this dangerous phenomenon, there is a need to use the principle of non-use of force or threat of force in international relations (the fourth paragraph of Article II of the Charter). The United Nations also prevented interference in the affairs of states. There are two exceptions: the case of individual or collective legitimate defense (Article 51 of the Charter), and the state of intervention by the international organization to counter or threaten international peace and security or when aggressive situations occur (Articles 41 and 42 of the Charter). In recent decades, the thought of combating terrorism has increased international awareness of the importance of combating it through joint and effective collective action in a framework of coordination and cooperation. At the United Nations level, the issue of terrorism was included in the agenda of the 27th session of the General

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Assembly in 1972 on the initiative of the Secretary- General, but it did not achieve concrete results in this regard.

The Fifth Topic Future Challenges Facing Humanity There are international, industrial, commercial, and civilizational developments that have produced international laws in the form of binding international standards, entitled “Comprehensive Management”. Therefore, the international community must activate the human resources to the best and create specialized departments on the basis of expertise and experience. In order to go into detail in this topic, I will divide it into a set of the following demands: The first demand: challenges and impediments to international cooperation, the second demand: the frameworks of future development cooperation in the international community.

The First Requirement: Challenges and Impediments to International Cooperation The world in general will depend in the future to a large extent on the science and technology facility and the results of modern innovations and developments in science and technology of communications and electronic commerce and modern marketing means, media and advertising and direct consumer behavior of goods and industrial services and face the future shock and civilization challenge and the fourth industrial revolution and deal with developments in order to ensure the growth, continuity and upgrading This requires good coordinated and programmed dealing with all industry through close and very transparent cooperation between the public and private sectors and finding the means provided by the agreements. The State’s global trade system for developing countries, giving greater attention by governments to the science and technology facility and the speed of completion and establishment of industrial information banks and patents generated or obtainable globally according to a plan with a time limit, specific objectives, means adopted and capable and effective tools. This is not difficult, but it needs a political- economic decision. Therefore, in order to face obstacles, the principle of preparation and organization must be adopted both on institutions and individuals. The main challenges are the lack of integrated performance to develop general principles of coordination. Topics in international cooperation in industrial areas include standards and the promotion of some projects with common regional benefits. The most important challenges are: . The absence of an appropriate institutional and strategic structure in many countries, especially in the field of industry itself, and the lack of a legal concept for the development of industrial projects, and therefore the formation of economic

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integration is an imperative for the development of regional and international institutional aspect. The limited national market for each Arab country alone and its inability to date to create a wide regional market for industrial products for the Arab countries. Market war for the most popular consumer products. International trade blocs in key markets under trade liberalization and WTO. These blocs and agreements will impose stiff competition for goods and products from their markets and their expansion unless they can provide the conditions for open competition, which must be addressed. Changes in communications and technology intensify price competition and hurt many countries, especially when we take into account the continued decline in oil prices and its effects on development and population growth. Poverty, unemployment, and incurable diseases are widespread in many human societies, particularly in Africa, Asia, and Latin America. Extremism and terrorism. Nuclear proliferation. Technological development. Security breaches of computer systems (cybersecurity). Repute and replace the labor allowance.

The Second Requirement: The Frameworks of Future Development Cooperation in the International Community The effects of international cooperation as a global system on modern national states are both negative and positive, but the majority of negative impacts are confirmed while the majority of positive impacts are likely to occur and are closer to the opportunities that the modern national state may be able to use and according to its efforts to convert potential benefits into actual benefits. These effects will vary from country to country depending on the economic and industrial data owned by each country, including: the degree of industrial and economic development, the productivity of the industrial workforce, economic and administrative efficiency in industrial development processes, in addition to the nature of the state’s comparative advantages in the sectors. Productivity and service in general, the ability to finance investment in infrastructure and industrial development research, the establishment of data banks and networks with patent centers and international technical data banks, and the development of industrial and technical education The economic, administrative and developmental needs keep pace, and also national economic capacity to reallocate resources between economic sectors and the nature of the required amendments to the regulations, laws and legislation related to the overall WTO agreements. In the Arab countries, despite the great industrial achievements achieved in many Arab countries and the accompanying establishment of development research centers, and the preparation of industrial leadership cadres, and the establishment of joint Arab industrial projects or Arab international industrial projects, the Arab countries still did not achieve the desired ambition, despite the magnitude of what it has possibilities

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and potentials allow it the best opportunities, to establish many of the extractive, land, and manufacturing industries and to develop and upgrade them to be in the ranks of global industries. It should also focus on the scientific and technical side, as any desired development depends on the ability of societies to absorb scientific knowledge and deal with the tender and development, and the Arab countries had to have a scientific base (human-based) equipped and capable of creation and innovation, accompanied by the existence of data banks. An industrial base possesses the features of technical progress and is linked to practical applied research and a level at which it can transform scientific achievement into a technological reality.

47.6 Conclusion China has been a leader in the country’s first 70 years. Its dramatic and rapid economic, political, scientific, and cultural transformations have been either a cause of international cooperation, or one of its profound results. All societies, including the most isolated, live to some degree in the age of international cooperation. All countries, must engage in international cooperation wither it wants to or not. But while everyone is moving toward international cooperation, some seem to be rushing towards it at high speed, without hesitation, and with enthusiasm beyond Hamas, while others seem to be loving it very slowly, hesitantly, perhaps fearfully, one step forward and two steps backwards. States also work through laws to solve the general problems of society, but these laws do not allow to address special cases and problems such as addressing the disease of the poor and help them and provide accommodation and food for those who cannot pay the wages of a house or help orphaned children or many other problems that cannot be legislated Laws specific to the circumstances of the community and specific in terms of possibilities and resources. Civil society is considered as an essential and complementary to the role of the state, relieves pressure on the citizen and makes the relationship between the state and individuals indirect, given the importance of civil society in solving some of the problems faced by individuals or groups and assistance, and thus on the stability and development of society and its contribution to local development Regional and humanitarian. A set of recommendations can be developed as follows. First: Contribute to providing and improving international cooperation in all political, economic, cultural, and technological aspects for a bright future for peoples, especially in the fields of economic development and combating terrorism. Second: Coordinating industrialization programs with technology development programs, developing human resources in general and manpower in particular, and employing local manpower to reduce unemployment, which has become a global problem.

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Third: To embody collective international interests by strengthening the activities of the private sector and collective governmental and non- governmental organizations to play their active role in supporting international development. Fourth: The active participation of the people and their organizations in the performance of their natural roles in development. Fifth: There is an urgent need for strengthening the institutions of civil society and the removal of the obstacles facing its activity is an urgent need to enable them to encourage citizens to participate and deepen the process of transformation s social positive. It remains to say that cooperation between countries must be among them, and the fruits of this cooperation come on all countries, and benefit from it. Cooperation for a common human future has become essential in the era of international cooperation, there are many challenges as we have said, so it has become it is important to cooperate jointly for the good and benefit of the world peoples. The State of China is one of the most important international models that have worked and continue to participate in the development of global societies, especially in third world countries through economic and participatory activities in reconstruction, construction and technological and industrial development. China has produced huge volumes of products and made them available to the international markets at competitive prices. This has. It is also certain that China will have a great role in the future in the progress of the Fourth Industrial Revolution to better serve the human society, especially in science, medicine, disease treatment, and other. The people of the world are waiting for what Chinese ingenutiy will offer to humanity in the future.

Suggested Reading Ahmad Majdalani, Hamdi Abdul Rahman, Khaled Al-Wazani, Talal Atrissi, Ali Al-Qarni and Wissal Al-Azzawi, (2001) Political and Cultural Implications of International Cooperation on the Arab World , First Edition, Center for Middle East Studies, Amman, pp. 117–118. Dr. Ahmed Thabet, 1999, Egyptian Democracy on the Threshold of the Next Century , Al-Mahrousa Center for Research, Training and Publishing, Cairo, First Edition. Aladdin Naturieh, (2001). International Cooperation and its Impact in the Third World: Challenge and Response, (I 1), Amman: Dar Zahran. Ali and Wadih Abu al-Enein, and Mohammed and Barakat, (2003). Philosophical Origins of Education, (i 1), Oman: Dar Al Fikr for Printing, Publishing and Distribution. Ayman Darawsheh, (2003). International Cooperation and its Impact on Third World Countries, Journal of Education. 32 (46): 230–234. Dr. Ennis Claude, International Order and World Peace, translation, export and comment. Abdullah Al-Arian, the Arab Renaissance House, Cairo 1964. Falah Said Jabr (2001), Implications of International Cooperation and Trade Liberalization for Arab Industry, Arab Organization for Administrative Development “Research and Studies. Haifa A. Al-Tikriti (2010), International Economic Cooperation Mechanisms and their Future Effects in the Arab Economy , Al-Hamed Publishing and Distribution, Amman, Jordan. Hamad Al Maamari, (2001). International Cooperation and the State of Qatar: Political, Economic and Cultural Dimensions. Unpublished Master Thesis, University of Jordan, Amman, Jordan.

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Dr. Hamed Khalil, 2000, Arab World and Civil Society, Strategic Papers, Quarterly Journal published by the Center for Strategic Research, Damascus University. Hansge Murkenthau, Politics Between Nations, Translation of Khairi Hammad, Part III, National Printing and Publishing House, Cairo, 1965. Hassan Abdullah Al-Ayed, (2004), The Impact of International Cooperation on Arab Culture. Arab Renaissance House. Hassan Mohamed Hassan, and Mohamed Atwa, (2004), Education and contemporary issues of society, global for publication and distribution. Hussein Abdel Hamid Ahmed Rashwan, Extremism and Terrorism from a Sociology Perspective, University Youth Foundation, Cairo, 2002. Dr. Ibrahim Ahmed Shalabi, International Organization: A Study in General Theory and International Organizations, University House for Printing and Publishing, Beirut, 1984. Kamal Hammad, Terrorism and Resistance under Public International Law, University Foundation for Publishing and Distribution, Cairo, 2003. Khairi Kittaneh, (2003). The impact of informatics, international cooperation and the Internet in adapting management information systems. Unpublished doctoral thesis, Al-Neelain University, Sudan. Mazen Gharaibeh, (2002). International cooperation and culture. Yarmouk Research. Modjorian, L.o, terrorism lies and facts, translated from Russian: Engineer Abdul Rahim al Mekdad, Engineer Imad superstition, i 1, Sham Press, Damascus, 1986. Dr. Mohamed Talaat El-Ghonemy, General Provisions, in the Law of Nations, Al-Ma’arif Establishment, Alexandria, 1971. Mohammed Singlawi, (2001). The level of knowledge of secondary social studies teachers of the concepts of international cooperation and appreciation of the degree of importance. Unpublished Master Thesis, Yarmouk University, Irbid, Jordan. Omar Mohammed Suleiman Makhzoumi, The Concept of Terrorism in International Law, PhD Thesis submitted to the Institute of Arab Research and Studies, Department of Legal Research and Studies, Cairo, 2000. Saleh Abu Asba, and Izz al-Din al-Manasra, (1998). International Cooperation and Identity Papers Fourth Arab Conference of the Faculty of Arts and Arts, first edition, Amman: Dar Majdalawi for publication and distribution. Dr. Saleh Jawad Al-Kadhim, Study in International Organizations, Al-Irshad Press, Baghdad, 1975. Walid Siam, (2004). The chances of success of small enterprises under international cooperation. Economic prospects. 25 (100): 60–61.

Chapter 48

Construction of the Community with a Shared Future for Mankind: Sustainable Development as a Global Governance Challenge Ernesto Velasco Sanchez

48.1 Globalization and the Challenges for Constructing a Common Future Globalization is a familiar and pervasive force in contemporary international relations, characterized by greater and more rapid interregional socioeconomic interactions (Held and McGrew 2000). Even those political actors that have embraced the discourse of nativism and isolation must deal with the rest of the world to, for example, keep their borders secured, or access valuable resources required by their national industries. However, the drivers of globalization have become ever more complex. For many years, free trade and the internationalization of financial flows were the most salient features of the growing interconnectedness between countries. Many countries were able to achieve impressive rates of economic growth when they successfully inserted themselves into regional and world-wide markets. China is the obvious example in this respect. Also, the weaknesses of the international institutions that were stablished to maintain international economic stability were on open display during the recurrent crisis that affected periodically different regions of the world. The housing crunch of 2008 and the long and painful recession that followed are evidence of that economic liberties at an international scale demand, paradoxically, a strong set of international institutions that can discipline their worst tendencies by making sure that controls and regulations are available and enforced to prevent them and dealing with them. While economic globalization was consolidating, other sorts of interdependencies were also becoming more important in scale and pace: environmental issues such as E. V. Sanchez (B) Research Group for Government, Public Administration and Public Policies (GIGAPP), Mexico City, Mexico e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_48

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the damage to the ozone layer in the atmosphere and man-generated global warming, international crime, and terrorism, intellectual property and industrial innovation, migration, among other problems do not have a solution within the borders of a single nation-state, even one if continental dimensions such as China or the United States. Even governments staffed with the best people, through a strong meritocracy, and that have huge resources, do not necessarily have all the knowledge, resources, even legitimacy they need to be able to confront these problems. And, given the transnational nature of them, the need for international cooperation is crucial. Therefore, the stride for creating a new forms of international solidarity that can foster collaboration and prevent international collective action is still relevant today. This is not a new idea. In the wake of the end of the First World War the Wilsonian optimism talked about constructing a “Society of Nations” that could prevent another bloody conflict in the future. The disappointing results of the League of Nations are well known. However, the pulse for creating a supra national architecture that can foster cooperation and prevent conflict has been a permanent preoccupation for most of the twentieth century and the first years of the 21st: the Breton Woods institutions, the World Trade Organization, the different multilateral organizations that have mushroomed since 1945 are testimony of the awareness of the need to have an effective global governance that allows humanity to live in a prosperous, healthy and safe world. It is interesting that this conference has called papers on the subject of creating a “Community with a Shared Future for Mankind”, in contrast with the concept of a society of nations mentioned above. From a classic Western sociological tradition, while a society arises from indirect or mediated relationships, relations by contract and the law, while a community is based on personal interactions, based on tradition and organic forms of organization (Tönnies and Loomis 2017 and Weber 1978). While a community is moral entity, a society is based on impersonal exchange and rationality. Translating this into the world stage, an international community requires an ethical bond that can maintain collective action between countries with different political regimes and cultural heritage, while a society of nations would be mainly based on achieving mutually beneficial between states, even if they are based on short-term calculations and in postponing difficult decisions into an unclear point in the future. Our actual international regime suffers from imperfections form both types of organization, as it has grown as a hybrid, showing some characteristics of a society type of regime (e.g., international trade negotiations, disarmament agreements, etc.) and also of the community type (the Universal Declaration of Human Rights or the Sustainable Development Objectives, etc.). While aspiring to a perfect model of international governance could be naïve, the present situation requires a deep redesign of the existing mechanisms for defining the objectives to be achieved and to make sure that collective action occurs. There are two challenges that are still an important obstacle to achieve: on the one hand, there is still a realist vision of international relations that has resulted in predatory attitudes among national states that is not conductive to collaboration and productive reform of global governance

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structures. On the other, and closely related to the former, a lack of enough ethical commitment of nation states leads to cherry picking those issues and governance mechanisms that are more convenient to them. I will explain this further. One of the most pervasive influences of Western political thought around the world has been the dissemination for realism or neo-realism in foreign relations (Waltz 2010). This approach contends that, given that there is no superior international authority, the state of international relations is anarchy, with every state out to further its own interest at the expense of every other one (Mearsheimer 2001). The balance of power is the only way in which peace can be sustained, but it periodically collapses, giving way, through war, to a new balance. This zero-sum understanding of foreign relations is not an accurate depiction of how they are conducted, but it has shaped the way many governments deal with others, reducing the possibility of solidarity and willing collaboration. The neo-realist position has been challenged by liberal positions, that acknowledge the importance of other actors beyond national states, such as multilateral organization, multinational companies, etc. From the liberal standpoint, the tendencies to conflict derived from states looking for greater security or power are ameliorated by the growing economic interdependence between countries (Keohane and Nye 1977). The complex economic transnational networks in fact render states less relevant in the international area, as they cannot control completely the different flows of people, goods, services, and information. However, even this wider understanding of the factors affecting international collaboration still is based on the assumption that closer relationships can bring enough commitment to confront global challenges from all countries. Just looking at the recent surge of nationalistic or isolationist political positions is some of the more interconnected countries in the world questions these assumptions. The lack of ethical commitment from nation states has also resulted in uneven or unstable involvement of governments in thorny issues or uncomfortable international institutions. For example, one country could be committed to free trade and support such organizations as the WTO and also commit itself to the fight against climate change via the Paris Agreement and its accountability mechanism but reject the jurisdiction of the International Criminal Court or being subject to Human Rights Reviews by the United Nations. This results in multiple problems. One is of credibility: if the engagement with other international governance mechanisms is uneven, then other states will doubt the sincerity of the commitments that are made. Another effect is that, if one country cherry picks, the rest will feel legitimated to do the same. Therefore, we end up with several partial government mechanisms, that address isolated issues and that have the effective collaboration of just a few countries and, therefore, rendering those mechanisms ineffective to face complex global challenges. In turn, the lack of results makes countries even more wary of joining in and prevents other collaboration initiatives to be taken seriously. In conjunction with a realist or liberal approach to international relations, cherry picking promotes a run to the bottom that goes against constructing a community that promotes a shared future for humankind (Table 48.1).

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Table 48.1 Views on global governance Neo-realism

Pluralism

Liberalism/solidarism Global Democracy

Proponents

Mearcheimer, Krasner, Waltz

Bull, Jackson

Rosenau, Anna, Commission on Global Governance, Wheeler

Heid, Archibugi, Falk

Evaluation of existing global governance

There is no global governance; the international system is anarchic in spite of increasing globalization

International Law upholds the principles of sovereignty and non-intervention

International regimens are an important part of global governance; governance at the subnational, national and supra-national levels dampens the effects of anarchy

The existence of global civil society and a global citizenry call for more democratic global governance

Vision of global governance

Achieving a stable balance of power through alliances is the only realistic characteristic of global governance

Global governance in many areas, not only the military, is required; a legal framework bases on solidarist norms and with inbuilt enforcement mechanisms; solidarist norms place individual fights as high as sovereignty rights

Cosmopolitan democracy invoices a global constitution and the recasting of territorial boundaries

Source Kjaer 2004, 83

Unless new spectacles are used to understand and to support international policy making, the achievement of global goals will remain elusive. Demands for greater democratization of international affairs are gaining ground as an alternative approach. Since the 1990s, a strong global civil society has worked on opening the arenas where global policymaking takes planes. Examples are the Sao Paulo Social Forum and the environmental movements that demand global action against climate change. Nation states, even those with the best of intentions, frequently are not able to escape from the tunnel vision of their domestic political agendas or avoid their capture by corporate or other interests. The potential conflicts between nation-state’s interests and the common global interest justifies the demand for a more open global governance that allows greater participation of the people and of civil society organizations that allows greater checks and public accountability around issues that transcend national borders and interests such as the joint management of global public goods.

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Suggested Reading Held, D. and McGrew, A.G., 2000. “The Great Globalization Debate: An Introduction” in Held and McGrew (eds.). The Global Transformations Reader. Malden, Mass.: Polity Press, pp. 1–45. Keohane, R.O. and Nye, J.S., 1977. Power and Interdependence. Kjaer, A.M., 2004. Governance. Polity Press, pp. 8–9. Kjaer, A.M., 2004. Governance. Polity Press, pp. 8–9. Mearsheimer, J.J., 2001. The Tragedy of Great Power Politics. WW Norton & Company. Tönnies, F. and Loomis, C.P., 2017. Community and society. Routledge. Waltz, K.N., 2010. Theory of International Politics. Waveland Press. Waltz, K.N., 2010. Theory of International Politics. Waveland Press. Weber, M., 1978. Economy and Society: An Outline of Interpretive Sociology (Vol. 1). University of California Press.

Chapter 49

Constructing “a Community with a Shared Future for Mankind” on Crumbling Pillars Kristian Mehlsen and Mathias Behn Bjørnhof

49.1 Crumbling Pillars The times they are a-changin’, sang Bob Dylan. A refrain of the 1960s which marks a time of significant societal upheaval and uncertainty in the Western hemisphere, the song stands as an anthem to the inescapability of change. Indeed, if the human tradition of literature and art is to be trusted there has always been an undercurrent in the human psyche of living in times of change and uncertainty; at that ambiguous point between the past and the future—the present. However, mankind tends to overestimate short-term effects to the future, and under-analyze long-term shifts to the pillars of society. And our times are no different. We are indeed witnessing tectonic shifts to these pillars—times are a-changin’ before our eyes if one dares to look. The pillars that underpinned the last centuries of societal development are crumbling. We are witnessing democratic recession, the end of western technological dominance and western-led globalization, all the while we are facing accelerating environmental change. Four pillars that, at least from a Western perspective, seemed stable, almost eternal, and characterized our Western perception for a future of mankind. So, if we are constructing a community with a shared future for mankind what are the changes we are witnessing to the foundational pillars? Let’s discuss from the perspective of eroding western technological dominance and globalization, and China’s impact on these changes.

K. Mehlsen (B) · M. B. Bjørnhof Copenhagen Institute for Futures Studies, Copenhagen, Denmark e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_49

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49.2 The Canary in the Coal Mine Throughout history, new inventions and scientific discoveries have been made by different civilizations across the world. The ancient Egyptians built massive monuments and invented the steam engine. The Greeks excelled in ship design, the Romans invented the dome, advanced siege engines, and a type of concrete that has lasted millennia. The Chinese invented paper, the mechanical clock, paper money, gunpowder, rockets, movable type for printing, and the magnetic compass. The Arab world has also made numerous inventions, including windmills, algebra, advanced surgery, and optics, as well as other impressive advances in science. The world’s first university was founded in Fez, Morocco, and the world’s first hospital was founded in Cairo, Egypt. So, in a historical context the strong pillar of Western technological dominance is only as recent as the industrial revolution. However, what worked in tandem with technological revolution was Western-led globalization. Where the inventions of the civilizations of yore was local in application and spread slowly, Western innovations were globally implemented, spread throughout the globe via networks of trade and colonization, and were radical in their application of Schumpeterian creative destruction to improve productivity. And with the innovations flowed Western ideas and values. However, the rapid expansion of large, former Third World economies, notably China, is challenging the perceived status quo. The Chinese government has launched several “moonshot’” initiatives that aim to cement the country’s status as a global power. The Belt and Road initiative will connect Eurasia in a gigantic, Chineseled infrastructure project that will tie the involved regions and countries together economically and give China an unprecedented opportunity to exercise its influence across Asia and Europe. The Made in China 2025 initiative is another example where China reaches for leadership, here, in technology and science. The project aims to put China in a leading position in the development of new technology, including IT, robots, infrastructure and transport, farming technology, biotechnology, and materials science. China is also challenging the West in other fields, including research output and education. It looks as if the West soon may be losing out in the battle for technological dominance, with the East in ascendance. China is not the only non-Western technological superpower with South Korea and Japan being world leaders within technology fields. China, however, seems to be the dominant Eastern technological superpower by far. This is partly due to China rapidly overtaking the United States, as well as Europe (including Russia) in spending on R&D, measured as Purchasing Power Parity (PPP). Chinese R&D spending, in fact, grew tenfold between 2000 and 2016. Though Chinese R&D spending as a share of GDP still is lower than in advanced countries like the US or Germany, the share is growing, and with a much faster growing GDP, overall GDP spending looks to quickly surpass. Together with a record production of doctoral degrees and recruitment of talented researchers, this means that China is well suited to maintain its fast pace of technological development—and

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while so far, this development has mainly been one of catching up, we may soon reach the tipping point where the rest of the world has to struggle to catch up to China. The canary is chirping, signaling that times are a-changin’.

49.3 Taking the Lead Bit by Bit China is expected to be first in offering 5G networks and commercial services and looks to become the cost leader due to the size of the Chinese market. The Chinese company Huawei is world leader in 5G equipment, and the United States, Australia, New Zealand, and Canada have decided to prohibit or restrict Huawei in their domestic markets. While these bans are grounded in security concerns, they demonstrate that China is expected to be a major player, even global leader, in 5G networks. In a future characterized by big data, internet of things, and artificial intelligence (AI)—technologies than can fundamentally alter the future of mankind—nations compete to be on the forefront with the world’s fastest supercomputers. Supercomputers are particularly important in developing advanced AI, which is seen as perhaps the most important technological field over the next decades, with applications in warfare and intelligence, robotics, education, and smart-city solutions. PwC estimates that by 2030, AI products and systems will contribute up to USD 15.7 trillion to the global economy, with China and the US as the leading developers. The West may have dominated the development of the internal combustion engine vehicles, but when it comes to electric vehicles (EVs), China looks to be in the lead. Of the top ten global producers of EVs, five are Chinese, with two more being fully or partly Asian. In addition, China produces 56% of the lithium-ion batteries that drive EVs, with plans to expand the production to a capacity to three times that of the rest of the world combined. Since 2013, almost 500 electric-vehicle companies have launched in China. Heavy subsidies and restrictions of combustion vehicles drive up domestic demand for electric cars. The uptake of electric vehicles has been slow, especially in the West. Even so, few deny that EVs are the personal vehicles of the future, given the environmental importance of phasing out fossil fuels and the rapidly declining costs of electricity from sustainable production. China is the world leader in high-speed rail even today. At the end of 2018, China had over 29,000 km of high-speed railway lines capable of reaching up to a world record 350 km/h. This is two-thirds of the world’s total, with 4,100 km added in 2018 alone. In 2019, China plans to put another 6,800 km of new tracks into service. Depending on the results of a feasibility study, China may also begin 1,700 km of high-speed rail from Sichuan to Tibet, across some of the deepest valleys in the world. This stretch alone has a budget of at least USD 35 billion. Near-future plans also include a pan Asian railway network, stretching south through Laos, Thailand, and Malaysia to Singapore. China has earlier aired ambitions about building high-speed rails across Russia to Europe, capable of transporting goods and people between the two regions in a few days.

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Some will even say that Chinese transport technology is out of this world. In January 2019, China landed a spacecraft and rover on the far side of the Moon, something that has never been achieved before. While this may not sound impressive compared to the US landing rovers on Mars, flying probes close to Pluto, or sending craft into the atmosphere of Jupiter and Titan, the feat was complicated by the fact that direct communication between the Earth and the far side of the Moon is impossible. Over the next decades, China plans to build a new space station by 2022 (at a time when the US-led International Space Station is winding down), followed by a manned Moon research base and missions to Mars. The Chinese space program is advancing at a moderate pace, with a focus on steady advances over prestigious ‘moonshot’ projects, but that may turn out to be the better long-term strategy. China’s move to become a world leader in EVs, along with the focus on highspeed railways, and aerospace technology, may hence spell the end of the West’s dominance in transport technology, as well as becoming a significant challenger in the nascent fields of 5G, AI, IoT, and supercomputers.

49.4 Man, Re-designed It is not only the technological reconfiguration of the transportation system of information, physical goods and people. It is also the redesign of mankind itself. As a part of the Made in China 2025 strategy. China is betting big on biotechnology and aims to have the biotech sector make up 4% of the nation’s GDP by 2020, roughly double what it is in the United States. China has more than a hundred biotechnological science parks working to that end, with 93 in Guangzhou alone. Chinese investments in life sciences have grown from less than USD 1 billion in 2013 to more than 20 billion in 2018, a trend that does not appear to be slowing down (investments nearly doubled from 2017 to 2018). While China has 20 percent of the world’s population, it has 30 percent of global cancer cases, including 36 percent of global lung disease cases, as a result of pollution and a high rate of smokers. This makes cancer research a high priority, and biotechnology like T-cell therapy is an important part of this strategy. One concern is the lower (or perhaps merely different) ethical standards for biotechnology in China compared to the West. In November 2018, global headlines were made when the Chinese scientist, He Jiankui, of Southern University of Science and Technology in Shenzhen announced that he had edited the genes of newborn twin girls with CRISPR technology, with the aim to improve resistance to HIV infections. This sparked a strong response from SWestern scientists, with some calling the experiment “unconscionable”, “not morally or ethically defensible”, or even “monstrous”. In January 2019, Chinese authorities denounced He’s experiment, declaring it illegal, and he was fired from his university; yet the fact that the scientist wasn’t stopped before highlights different approaches to oversight of biotechnological research.

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49.5 Strategizing for a Long-Term Game What are the causes of this shift of technological dominance from West to East? Is it simply a matter of China’s impressive economic growth? If so, why didn’t the other BRICS countries follow suit when they were at their peak? The size of China’s population is a factor, but India’s population is equally big with few signs of achieving technological dominance, while South Korea and Japan, with their comparatively moderate populations and economic growth, has had a far greater impact on global technology. Investment in R&D is, of course, important, but China’s R&D investment as a share of GDP is quite moderate, well below that of Western tech superpowers like Germany and the US and even farther behind Japan and South Korea. Nor does the ratio between private and public spending seem to really play a role. Government spending on education doesn’t seem to be a factor either, with the US and Western Europe spending a greater share of GPD on education than China. One possibility for the success of China and other Asian countries like Japan and South Korea when it comes to technology may be a willingness to focus research investments on the long term. China’s Made in China 2025 plan, which aims to turn China into a leading manufacturing power, was certainly long-term planning, whereas the investment horizons of most Western government and companies are rarely more than a handful of years. Not being a democracy may, in fact, aid China in this, since changing governments in Western democracies regularly shift the focus of investment and focus on projects that may produce results before the next election. Western technological dominance may be the result of competing companies, but paradoxically, this may now be the reason for the loss of dominance: Companies have neither the ethos nor the patience for the massive, long-term ‘moonshot’ projects that may be the key to technological leadership in the twenty-first century.

49.6 Globalization (Made in China) The impressive transformation of China from an agricultural economy to an industrial superpower over the last decades has shown how an alternative system of government can rival the Western democracies in providing wealth and prosperity to its people, while becoming increasingly competitive on the global stage economically, scientifically and technologically. Looking into the future through the conventional globalization lens of economic influence, one initiative stands out—the Chinese Belt and Road Initiative (BRI), backed up by the Made in China 2025 plan. Some have referred to it as the Chinese Marshall Plan, others worry it has the characteristics of potential debt trap-diplomacy. However, no-one can deny that it is immensely ambitious in size and reach. This development project involves a territory equal to 55% of global GDP, 70% of the global population and 75% of its known energy reserves. But not all projects involve bricks and steel. As part of the BRI China plans to set up international courts to resolve Belt and Road related commercial disputes.

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As Jonathan Hillman, director of the Reconnecting Asia project at the Center for Strategic and International Studies in Washington, writes: “It’s a reminder BRI is about more than roads, railways, and other hard infrastructure … It’s also a vehicle for China to write new rules, establish institutions that reflect Chinese interests, and reshape ‘soft’ infrastructure”. The Belt and Road courts can very well form an opposition to the existing Western led institutions that is taken for granted and referred to for global rule of law and order. And while there are many pitfalls between the fast and furious catching up and a role of global leadership, such as demographic decline, high debt levels and relatively poor population, China has made its presence known. If the trajectories continue, with the old first world in turmoil and the East remaining strong, it may well be about time to sign up for a Mandarin class. China is in the process of pushing its own brand of centralized globalization that emphasize different values promoted by the West. These same values are meanwhile challenged and eroded in the West as well. So indeed, the times are a-changin’. However, will China culturally and socially be able to take on the task of facilitating the creation of a shared future for mankind? For the Shared Future for Mankind-initiative to succeed, it is key to establish exactly what mankind is. Currently, a key divider East and West is the discrepancies in our understanding of man and mankind. This pertains to matters such as human rights, individuality/collectivity, and trust. Before a shared future can be realized, a shared definition, or an entente acknowledging our differences, or an alluring and aspirational alternative to Western values, must be developed.

Suggested Reading Adolfo Arranz, “Betting big on biotech”, South China Morning Post (2018), bit.ly/2GuwGze. Antonio Regalado, “What’s a Moon Shot Worth These Days?”, MIT Technology Review (2014), bit.ly/2GlBKWF. Arne Westad, Kathleen Burk, Hakim Adi & Margaret MacMillan, “The big question: Why did the west dominate history for so long?”, History Extra (2016), bit.ly/2TYocD8. Copenhagen Institute for Futures Studies, “Evaluating the Hype: 3D print, Bitcoin, and electric cars – a reality check”, CIFS Members’ Report 4/2016. Copenhagen Institute for Futures Studies, “Crumbling Pillars”, CIFS Members’ Report 1/2019. David S. Landes, “Why Europe and the West? Why Not China?”, Journal of Economic Perspectives (2006), stanford.io/2T2haxc. Dennis Normile, “Three Chinese teams join race to build the world’s fastest supercomputer”, Science Magazine (2018), bit.ly/2HV9bRy. Jordyn Dahl, “Why China’s electric-car industry is leaving Detroit, Japan, and Germany in the dust”, MIT Technology Review (2018), bit.ly/2tkJZdj. Julia Beliuz, “Is the CRISPR baby controversy the start of a terrifying new chapter in gene editing?”, Vox.com (2019), bit.ly/2GLm92i. Leonard David, “China’s Chang’e 4 Moon Mission Faces Its First Big Freeze on Lunar Far Side”, Space.com (2019), bit.ly/2GCkgEJ. Mercy A. Kuo, “The Quest for 5G Technology Dominance: Impact on US National Security”, The Diplomat (2019), bit.ly/2N6zGTf.

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PwC, “Nations will spar over AI” (2018), pwc.to/2RLNLG8. Robin Respaut & Julie Zhu, “As China builds biotech sector, cash floods U.S. startups, Reuters 2018, reut.rs/2UYEe0r. Reuters, “Germany considers barring Huawei from 5G networks” (2019), reut.rs/2GlO7Sv. TechNavio Blog, “Top 21 Industrial Robotics Companies in the World 2018” (2018), bit.ly/2tgB8Ji. The Economist, “Can the West’s democracy survive China’s rise to dominance?”, (2018). The Economist, “The great experiment: Can China become a scientific superpower?” (2019), econ.st/2SmrEey. The Guardian, “What is China’s Belt and Road Initiative?”, (2018). TOP500: www.top500.org. UNESCO Institute for Statistics, “How much does your country invest in R&D?”, bit.ly/2N2t4oK. WEF, “Why China could lead the next phase of globalization”, (2016). WTO, “World Trade Report 2008”, (2008). Zhao Lei, “Airship to carry tourists, cargo”, Chinese Daily (2018), bit.ly/2tgBHms.

Part IV

The Belt and Road Initiative

Chapter 50

Economic Effects of Belt and Road Initiative: The Case of Southern Caucasus and Central Asia Countries Vugar Bayramov, Gulmira Safarova, and Musa Garajayev

50.1 Central Asia and South Caucasus Current Relationships with China The Central Asia and South Caucasus (CASC) region is geographically placed at the core of the Eurasian continent. Despite the fact that CASC region covers a large and wide area, the population is only 86.7 million, rating from the largest country— Uzbekistan (31.8 mln)—to the smallest—Armenia (2.9 mln). Kazakhstan is first according to the size of its economy—it is more than 20 times larger than Tajikistan and Kyrgyzstan. Additionally, Kazakhstan is clearly in the lead in terms of trade turnover with its neighbor, China, as can be seen in Table 50.1. Kazakhstan also has the highest Foreign Direct Investment (FDI), followed quite far behind by Uzbekistan (see Table 50.2). The main reason for such growth since its independence in 1991 from the Soviet Union can be attributed to significant oil reserves. Despite relative stability in the domestic politics of the Central Asian state, with the exception of Tajikistan in the 1990’s (traumatic civil war) and Kyrgyzstan (interethnic violence in 2010), most of the countries of the region still have not been able to attract foreign investment. The South Caucasus, on the other hand, has not seen such peace (Leo Zucker, 2019). The conflict between Azerbaijan and Armenia has consumed the two countries from 1988 until the present day. The existing conflict has frozen the potential for V. Bayramov (B) Chairman of Board, Center for Economic and Social Development, Baku, Azerbaijan e-mail: [email protected] G. Safarova Head of the Research Department, Center for Economic and Social Development, Baku, Azerbaijan M. Garajayev Center for Economic and Social Development, Baku, Azerbaijan © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_50

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Table 50.1 Trade Volume of CASC countries with China (Trade Volume, USD) Year

Azerbaijan

Georgia

Kazakhstan

Uzbekistan

Tajikistan

Kyrgyzstan

Armenia

2013

654,971

646,205

22,708,213

3,971,887

74,919

1,470,999

452,329

2014

760,945

823,860

17,156,707

3,911,280

79,126

n/a

585,372

2015

565,111

713,157

10,567,932

4,149,908

88,542

1,064,987

480,670

2016

1,085,832

716,700

8,880,577

3,636,026

95,188

1,544,658

463,127

2017

1,298,334

939,510

10,469,926

4,291,130

1,510.342

1,591,166

584,344

Source The National Bureau of Statistics of China, 2019

Table 50.2 Central Asia countries FDI level (in millions USD) Kazakhstan

Uzbekistan

Kyrgyzstan

Tajikistan

Turkmenistan

2014

7,308,112

757,358

343,010

326,593

326,593

2015

6,577,827

66,489

1,144,221

454,012

454,012

2016

17,220,962

1,663,991

619,220

241,616

241,616

2017

4,713,865

1,797,384

−107,212

185,827

185,827

2018

208,064

623,293

n/a

220,862

220,862

Source Data World Bank, 2019

prosperous economic relations throughout the Caucasus region, as it precludes any trade or traffic between the two warring countries, excluding Armenia from most regional initiatives. Despite open conflict, Azerbaijan leads the region in terms of FDI levels, mainly due to its oil and gas reserves, while Armenia lags far behind (see Table 50.3). The relationship between China and the countries of the South Caucasus has been strengthening over the last decades. The countries of the region have been, in general, exporting products with low value added (Georgian wines, Armenian copper) in exchange for Chinese industrial goods. The main import/export products traded between the countries and China are raw materials, minerals, and consumer goods (Word Integrate Trade Solution, 2018 stats.). Since 2014, the Chinese government has concentrated on infrastructure, encouraging investment and development in line with its BRI vision. A major development Table 50.3 South Caucasus countries FDI level (in million USD)

Azerbaijan

Georgia

Armenia

2014

4,430,466

1,817,880

403,898

2015

4,047,630

1,659,056

178,295

2016

4,499,666

1,570,511

338,115

2017

2,867,588

1,829,936

249,760

2018

1,402,998

1,184,093

254,261

Source Data World Bank (2014–2018 stats.)

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for the initiative was the opening of the new Transcaspian International Transportation Route (TITR), which created a rail link among China, Kazakhstan, Azerbaijan, Georgia, and Turkey. Beyond the CACS region, Ukraine’s joining to TITR on 15 January 2016, allowed it to circumvent the Russian embargo to reach China (John C.K. Daily, 2016).

50.2 China’s Economic Policy for the South Caucasus Economic Relations The Asian Bank of Infrastructure Investments (AIIB)—located in Beijing—provided a record amount of credit (600 mln USD) for building the Transanotolian gas pipeline (TANAP). Due to this precedence, Azerbaijan is now hoping for a generous Chinese financing opportunity to build the newly planned oil refinery “SOCAR-GPS”. In 2017, the AIIB provided its first credit to Georgia at a tune of 117 million. USD for building the Batumi bypass. The deep seaport at Anaklia had also been on China’s list of interests; however, the winner of the contract in 2017 was a Georgian-American company—Anaklia Development Consortium (ADC). Georgia’s “Poti Port” also appears to be on China’s list of interests. At the end of 2017, CEFC China Energy which specializes in energy sector made a deal and got a 75% share in industrial zone of “Poti”. Through this operation, both plan to make “Poti Port” a common market area and became a financial and logistic hub and also platform for exporting of Chinese products to South Caucasus, Central Asia, and Europe. Likewise, CEFC created the Georgian Development Bank and Georgian Construction Fund—both CEFC and Eurasian Invest LLC capitalized the bank with around 1 billion USD. These projects will be controlled and managed by CEFC. These activities were very important for current relationships between China and South Caucasus, especially with Georgia.1 Finally, Chinese communication companies started to improve their relations with all of South Caucasus countries. Particularly active is “Huawei”, who became the second biggest provider of mobile phones in Georgia and is now scheduling to open a new technological park there. The presence of Huawei in Azerbaijan since 2002 made it the favorite partner of the country and now, nearly 40% of the population choose its devices. In March 2017, it announced the “Smart City” project to provide public WI-FI network access throughout Baku. (Huseyn Valiyev, 2017).

1

www.potifreezone.ge/en/443/.

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50.3 Potential Benefits and Risks For Central Asia In Central Asia, Chinese investments have served as a way to improve the economy (especially in Tajikistan) or to cushion economic downturns (especially in Kazakhstan), as these investments bring economic boosts through the development of investment and trade. Especially in the energy and mining sectors, the BRI may allow for more utilization of countries’ national resources. From the Chinese perspectives, a major target of these investments is to secure access to natural resources for China. For Central Asia, the benefits are increasing as export and private natural resource rent incomes. Investment in transport infrastructure may also reduce the time and cost of products shipments and personal travels. The transport cost reduction of 35 percent for passengers and 50 percent for oil and products due the construction of the AngrenPap railway in Uzbekistan,2 which shortened travel time from the Fergana Valley to the rest of Uzbekistan (Ganiev, 2019). China has funded the construction, while the World Bank financed the electrification of the railway line. BRI investments may also contribute significant financial resources from natural resources rents and transit fees. The natural resources can generate important fiscal revenues.

For the South Caucasus All three South Caucasus capitals recognize both China’s BRI and the EU’s new connectivity strategy as overlapping with their own foreign-policy goals of transforming their countries into connectivity hubs between Europe and Asia. Thus, regional countries are invested in the rapid development of the Trans- Caspian International Transport Corridor (TITR).3

50.4 BRI Influences on CASC Countries by Country Here will be analyzed relationship between CASC countries and China’s One Belt, One Road initiative by countries. The notes were prepared by local experts within limited time and resources and thus can only give a preliminary and likely partial perspective on the BRI in their respective countries. More extensive research will be

2

http://projects.worldbank.org/P146328?lang=en. https://agenda.ge/en/news/2018/808?fbclid=IwAR1z3G-4oAcAZfCAw9l1nNQOppyWkxjTU6 dHhj926Xf3JsLp6R9n5-1FDm4. 3

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needed to get a more complete view of the dimensions of BRI investments in each of the countries.

Kazakhstan As a country that has the largest trade volume with China in CASC, Kazakhstan is a very important partner of Beijing. All major Eurasian corridors from the West of China have to get in through Kazakhstan. The country had good enough economic relations with China before the BRI started, with 17.2 billion USD Chinese investments, Kazakhstan was the largest partner among of the CASC region. Especially China was interested in Kazakhstan’s gas and oil sector and after a period of time has become its second—largest trading partner. Kazakhstan’s co-operating with China is predicting to extend more energy and infrastructure. China’s continuous investments in these sectors (“51 projects”) may reach 27 billion USD. Industry, services, transport, and logistic services are also included in these investment projects. Kazakhstan’s total debt to China (12 billion USD) remains a little fraction (7 percent) of the country’s total external debt. People to people (student) exchanges are also expanding, but Russia is still the most important partner of Kazakhstan in this sphere.

Kyrgyzstan Kyrgyzstan is a small neighbor of China with an open economy, and it had good relations with China for many years. But the BRI could further strengthen these relations and economic links. In last year Chinese companies did foreign direct investment in total 1.9 billion USD of total Chinese investments of 4.1 billion USD over the period 2011–2017. On this long period, different infrastructure projects have been created there. These projects are mostly in the energy and road sectors. Most of them were created to improve domestic transport connectivity including intra-urban transport and coal-based energy supplies.

Tajikistan In recent years China became Tajikistan’s main donor and investment trading partner. In 2015 Tajikistan signed a Memorandum of Understanding with China on the BRI terms. This means that China will provide large financing for the country’s National Development Strategy until 2030. A special focus on transport and energy infrastructure projects. Further, the BRI may transform Tajikistan from a landlocked region to

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a land-bridge region. As many of CASC countries could also have many potential benefits from this relations (trade volumes, growth, reductions in costs of delivered products and firm competitiveness). However, the experts Farkhod Amirjonov and Bakhrom Kholmatov identified some issues with the BRI in Tajikistan.

Uzbekistan Uzbekistan is a country with a diversified national economy, which has critical importance for the BRI, because it is located in the middle of the Central Asia and has the largest population in this region. Besides, in the energy sector, three lines of the Central Asia-China gas pipeline have been completed and fourth (from Turkmenistan through Uzbekistan, Tajikistan, and the Kyrgyz Republic) is under development. The fourth line is very significant, because it will allow export of Uzbek gas. China is also interested in oil and petrochemical industries in Uzbekistan. As the expert Ganiev notes in his analysis, that because of the rapidly expanded BRI investments of late, there is the possibility for significant benefits across a broad range of sectors and activities, including improved connectivity not only with China, but also with other neighbors and global markets.

Azerbaijan Azerbaijan is the largest economy of the Caucasus region and holds a very positive role for China. The two countries share similar development strategies based on interconnectedness and outward-looking investment policies. Until now, China has invested $779 million USD in the Azerbaijani economy and the trade turnover between Azerbaijan and China has grown nearly 800 times larger in this period, rising from $1.5 million USD in the 1990s to 1.3 billion USDin 2017. It is approximately 6 percent of Azerbaijan’s general foreign trade. Currently, China is Azerbaijan’s seventh largest trade-partner. (Vasif Huseynov, 2018). Azerbaijan looks to Chinese investments in land routes and high-speed rail links between Europe and East Asia. Baku has made Iran a 500 million USD loan for the completion of the Rasht–Astara railway linking the rail networks of Iran and Russia via Azerbaijan. This line will let the Russian goods to reach the Persian Gulf and perhaps more importantly it will facilitate trade between Russia and India via the Indian Ocean (Valiyev, 2016). On April 24, Azerbaijani President Ilham Aliyev arrived at in Beijing for the second Belt and Road Forum for International Cooperation. The ambitious Belt and Road Initiative will link China and Europe via new or expanded overland and maritime transit corridors. I will bolster trade and economic growth among all countries involved. Against that background, Baku is interested to enhance and improve bilateral cooperation with Beijing in an effort to drive more of that investment its

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way. During President Aliyev’s visit to China, representatives of various Azerbaijani companies who accompanied their delegation signed ten new cooperation agreements with their Chinese partners (Emerging-Europe, January 3, 2018). In total, the signed deals are reportedly worth 821 million USD, and the main plans are to construct the Sumgait Chemical-Industrial Park to produce automobile tires, a 300 hectare greenhouse complex in Azerbaijan’s Kurdamir region, as well as agro-industrial development parks in Guba, Goychay, and Khachmaz district.

Georgia In Georgia, China is interested in the country’s ports for trade connections across the Black Sea. Besides, Georgia’s Association Agreement with the EU is an additional point for attraction. Chinese investors can link with the EU and other markets through Georgia. China is interested in carrying out projects in different countries through the roads that may benefit Trans-Caspian connection. Chinese company Hualing Group, Georgia’s major foreign direct investor, created a Free Industrialized Zone in Kutaisi, which is near the Naklia Deep Water Sea Port that was established to transport Chinese goods to Europe (Larsen, 2017). Hualing invested USD 40 million in the Zone, which is expected to handle 40 million tons of cargo annually (Hualing Group Website). Also, the China Energy Company Limited (CEFC) purchased 75% of shares in the Poti Free Industrial Zone located in the Poti port (Inan & Yayloyan). In the energy sector, the Chinese state-owned enterprise, Dongfang Electric, in 2015 pledged 180 USD- 200 million USD for the construction of thermal power plant (150 megawatt) in western Georgia, the Tkibuli region (Van Dijk & Martens, 2016). In addition to investing in free economic zones in Georgia, Chinese companies are also investing in infrastructure, energy, mining, healthcare, finance and agriculture sectors (Larsen, 2017). Thus, Georgia aims to become a transit hub of trade between China and Europe by the BRI that focuses on connectivity and cooperation between Eurasian countries. In effect, its position in the Black Sea ports, Batumi, Poti, and Anaklia, can turn the country to the logistics hub in the region and compete with the Black Sea ports in eastern Turkey, which are unfinished. In the long term, Anaklia Deep Sea Port can improve the total competitiveness of Georgia as a transit hub.

Armenia Armenia has limited economic interactions with trade and transport connections, as it is a landlocked country. Although Chinese FDI is so far limited, there is Chinese

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interest in investments in renewable and alternative energy (solar and wind in particular) and in the Armenian IT sector with good potential for growth. Today Chinese companies are doing a significant study for the construction of a copper smelting plant in Armenia with cost 500 million USD (KPMG, 2017). ICT remains one of the fastest-growing sectors of Armenia’s economy. Above 450 ICT companies in Armenia are showing huge annual growth of 10%. Though most of these companies are based in Yerevan, there is a growing potential to expand the operation of companies in the other regions of the country regions (Enterprise Incubator Foundation, 2015). However, Armenia’s human capital performance is not as strong for the younger generations indicating that educational qualifications obtained during the Soviet era are becoming obsolete (World Bank, 2017). On the other side, a World Bank study shows that skills are not the main thing for top firms; however, a big part of firms that invest in R&D inform skills to be a constraint.

50.5 Conclusion The BRI offers Central Asia and Southern Caucasus the prospect of large improvements in connectivity, linking places within the region to each other as well as improving connections to the rest of the world. The BRI promotes more OFDI to developing countries that welcome China’s economic engagement and alters the effect of Chinese domestic policy on its patterns. In addition, Chinese firms in construction and infrastructure, manufacturing, and trade-related sectors are more responsive to the BRI than firms in other sectors. Countries’ positions and estimated changes after China’s impacts are also considered.

Suggested Reading Vugar Bayramov, Dan Breban, Elmir Mukhtarov, “Economic Effects Estimation for the Eurasian Economic Union: Application of Regional Linear Regression”, Communist and Post-Communist Studies Volume 52, Issue 3, September 2019, Pages 209–225, https://doi.org/10.1016/j.postco mstud.2019.07.001. Bayramov, Vugar and Abbas, Gulnara, “Oil shock in the Caspian Basin: Diversification Policy and Subsidized Economies”, Elsevier, Resources Policy 54 (2017):149–156, accessed June 27, 2018, https://doi.org/10.1016/j.resourpol.2017.10.006. Bayramov, Vugar and Orujova, Laman, “Volatility, Diversification and Oil Shock in Resource-Rich Turkic Countries: Avenues for Recovery”, Bilig, no. 83 (2017): 303325, accessed June 27, 2018, http://bilig.yesevi.edu.tr/yonetim/icerik/makaleler/2080-published.pdf. “Two Ways of Influence-building: The Eurasian Economic Union and the One Belt, One Road Initiative”, Europe Asia Studies, https://www.tandfonline.com/doi/full/10.1080/09668136.2017. 1373270. Elena Maltseva, “Framing a Welfare Reform: The Social Benefits Reform in Russia and Kazakhstan”, Canadian Slavonic Papers, Vol. 58, 2016 Issue, https://www.tandfonline.com/doi/full/ 10.1080/00085006.2016.1202427.

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Gonzalo Escribano and Javier Valdes, “Oil Prices: Governance Failures and Geopolitical Consequences”, Geopolitics, Vol. 22, 2017 Issue, https://www.tandfonline.com/doi/full/10.1080/146 50045.2016.1254621. Halil Burak Sakal, “Natural Resource policies and standard of living in Kazakhstan”, Central Asian Survey, Vol. 34, 2015 Issue 2. https://www.tandfonline.com/doi/full/10.1080/02634937.2014.987970 www.potifreezone.ge/en/443/ https://www.ecfr.eu/article/essay_eurasian https://www.consilium.europa.eu/en/press/press-releases/2018/10/15/connecting-europe-andasia-council-adopts-conclusions/ https://ec.europa.eu/commission/sites/beta-political/files/communication-modern-budget-may_ 2018_en.pdf http://projects.worldbank.org/P146328?lang=en https://en.trend.az/business/economy/3044527.html https://agenda.ge/en/news/2018/808?fbclid=IwAR1z3G-4oAcAZfCAw9l1nNQOppyWkxjTU6 dHhj926Xf3JsLp6R9n5-1FDm4 http://vestnikkavkaza.net/analysis/China%E2%80%99s-changing-interests-in-South-Caucasus. html https://jamestown.org/program/south-caucasus-eyes-becoming-a-hub-along-eu-china-transport ation-route/ http://documents.worldbank.org/curated/en/836301554729486900/pdf/The-Belt-and-Road-Initia tive-Reshaping-Economic-Geography-in-Central-Asia.pdf https://jamestown.org/program/azerbaijan-eyes-more-cooperation-with-china-within-belt-androad-initiative/ http://pubdocs.worldbank.org/en/823221550768548344/ECA-Talks-Feb-2019.pdf https://www.cacianalyst.org/publications/analytical-articles/item/13539-towards-a-central-asiaand-caucasus-trade-bloc-for-belt-and-road.html https://www.ifri.org/sites/default/files/atoms/files/vliyanie_kitaya_v_stranah_vostochnoy_e vropy_i_yuzhnogo_kavkaza.pdf

Chapter 51

Global Competitiveness in Observation: A Belt and Road versus Non-belt and Road Regions Comparison Wan Tai Victor Zheng and Guo Hua

51.1 Introduction The year 2018 marked the fifth anniversary of the Belt and Road Initiative (BRI) after its launching by Chinese President Xi Jinping in 2013. As stated in its concept document, this initiative intends to promote regional connectivity, economic cooperation, cultural exchange, and mutual learning among regions or countries through construction of the Silk Road Economic Belt and the twenty-first century Maritime Silk Road (National Development and Reform Commission 2015). In other words, it is a grand initiative for promoting regional and international cooperation, interaction, and development in different dimensions. However, from the day the BRI was proposed, there have been mixed views, optimism, pessimism, or even observationism in different parts of the world (“One belt, one road and many questions” 2017). Some regard it as economic-political- cultural threats and challenges (“One belt, one road and many questions” 2017; Mardell 2017); some see it as multidimensional development opportunities for common or mutual prosperity (“Countries welcomed to join in mutual benefits of Belt, Road” 2018; Liu and Dunford 2016). Although there is no dearth of reports and analyses from different views and perspectives to address the background, strategic consideration and even China’s calculation (Cai 2017; “Embracing the BRI ecosystem in 2018” 2018), little objective evaluation has been made of outcomes achieved, impacts brought, problems that have arisen or better ways for seizing opportunities and reducing risks (Li and Schmerer 2017; Hillman 2018). According to the latest report by the World Bank (2019), the BRI could substantially improve trade and foreign investment and reduce poverty in participating W. T. V. Zheng (B) · G. Hua Hong Kong Institute of Asia-Pacific Studies, Chinese University of Hong Kong, Ma Liu Shu, Hong Kong e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_51

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economies through transport infrastructure projects if they are well managed. The World Bank estimated that trade for the participating economies would grow from 2.8 to 9.7 per cent, while for the world as a whole, trade would grow between 1.7 and 6.2 per cent (World Bank 2019, p. 9). The report also anticipated participating economies, especially low-income countries, could see a significant increase in foreign direct investment due to new transport links (World Bank 2019, p. 9). If the estimates of the World Bank hold, the BRI could increase participating economies’ global competitiveness through access to improved rail links and ports. As this initiative has been pushed forward, construction of infrastructure, free flow of economic factors, allocation of resources and integration of markets could be all enhanced, so one can expect multidimensional potentials will be gradually released. This paper uses the World Economic Forum’s flagship report, Global Competitiveness Report, to evaluate the economic performance in the Belt and Road regions (B&R regions) in comparison to the non-Belt and Road regions (non-B&R regions). The Global Competitiveness Index (GCI) is the key indicator for objective performance comparison between the two groups, to illustrate the possible contribution of the BRI.

51.2 Brief Introduction to the Global Competitiveness Index From Smith (1776) and Keynes (1936) to many scholars and policymakers, perfect competition, profit maximization, free market, investment and capital accumulation, regional integration and international trade are fundamental to boosting economic competitiveness (Rostow 1960; Barro and Sala-i-Martin 1995; Krugman 1995; Solow 2000; Armstrong and Taylor 2000; Friedman 2006; Suidek and Zawijska 2014). Porter (1979, 1985, 1990) also saw competitiveness a function of various factors like institutions, markets, and policies. The World Economic Forum has published the GCI annually since 2004, by incorporating MacArthur and Sachs’s (2001) and Porter’s (2001, 2005) indices under the expounding of Sala-i-Martin and Artadi (2004). As this index can reflect the growing need to consider a more comprehensive set of factors that significantly influence an economy’s growth performance, it quickly became internationally renowned and influential. Competitiveness is “the set of institutions, policies, and factors that determine the level of productivity of a country” (Schwab 2018, p. 317). Performance in CGI “explains over 80% of the variation in income levels and 70% of the variation in long-term growth across countries and economies” (Schwab 2018, p. 2). GCI has twelve pillars indicating different fronts of the competitiveness of an economy: institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, goods market efficiency, labor market efficiency, financial market development, technological readiness, market size, business sophistication, and innovation. The pillars are grouped into three

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domains: Basic Requirements (institutions, infrastructure, macroeconomic environment, health, and primary education), Efficiency Enhancers (higher education and training, goods market efficiency, labor market efficiency, financial market development, technological readiness, and market size), and Innovation and Sophistication Factors (business sophistication and innovation). When the GCI started in 2005, 117 countries or economies were included for evaluation. In subsequent years, the number has kept changing but, on the whole, gradually increased. For instance, in 2006 and 2008, the numbers went up to 125 and 131. Then, in 2010 and 2012, the numbers were 139 and 142. In 2014, 2016 and 2018, the numbers further changed to 148, 140 and 138. Several features can be summarized from the GCI: (1) If counted according to GDP, in 2018, the selected 137 countries or economies had over 98 per cent of the world economy (Schwab 2018, p. 12). (2) As expected, developed economies mostly top the list and developing economies rank at the bottom. (3) In recent decades, the growth momentum in European and North American economies has been in weakening while in developing economies in Asia, Africa, and Latin America it has been strengthening (Porter 2001, 2005; Schwab 2018).

51.3 Data and Method This paper compares performance in pillars of the B&R regions with that of non-B&R regions in 2008–2009 and in 2017–2018. GCI used identical measures of pillars from 2008 to 2018. The “financial tsunami” that erupted in the United States in 2008 was a watershed not only for the US economy but also the world as a whole. Though some economies were hit hard, some were less so. In hindsight, to a certain extent, this global economic downturn seemed to mark the conception of China’s BRI in 2013. The year 2018 was the fifth after the BRI was announced. Therefore, we selected two time points, 2008–2009 and 2017–2018, for brief comparison between the two regions, to give a picture of the changes, especially to illustrate how they may be relevant to the implementation of the BRI in the partner economies. In the subsequent analysis, comparisons are on two levels. The first is the overall ratings of competitiveness and three key domains for both B&R and non- B&R regions. The second level is ratings of each individual pillar. The BRI has no strict geographical limit on coverage and can extend to the whole world. In its classic definition and a narrower scope, it only includes two parts: The Silk Road Economic Belt and the 21st Century Maritime Silk Road. The Silk Road Economic Belt covers Central Asia, West Asia, the Middle East, and Continental Europe. The Maritime Silk Road includes the South China Sea, the South Pacific Ocean, and the Indian Ocean and Indian sub-continent. Our analysis focuses on these classic and narrower scopes of coverage. It is necessary to note the number of economies which signed up with the initiative has been increasing since 2015 (Fig. 51.1). In the foreseeable future, although international attention on the BRI may fade, the number of participating economies may increase. More solid cooperation

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Fig. 51.1 Number of BRI Partner Economies in Years, 2015–2019 (Source State Information Center (2017))

works may be undertaken in a less attentive or politicking way. As a footnote, the current study only tracks the change of participant economies from 2015 to 2018. Most countries or economies in the B&R regions are included in the GCI. Apart from China, eleven countries in South-east Asia, eight in Central and West Asia, six in South Asia, thirteen in the Middle East and North Africa, and nineteen in Central Asia and Europe are available in the GCI report. The economies vary greatly: some are well developed; many others are not. It is a fact that presents both huge challenges and opportunities for promoting international interaction and cooperation. In order to give a fair view, Chinese mainland and Hong Kong are considered ‘host’ economies and thus not included for comparison (Table 51.1).

51.4 Overall Competitiveness Comparison Competitiveness is “the set of institutions, policies, and factors that determine the level of productivity of a country” (Schwab 2018, p. 317). It is a core driver of economic growth and human development. The change of overall competitiveness can be observed from 2007 to 2018 in B&R regions and non- B&R regions. Before 2010, the average GCI in non-B&R regions was higher than that in B&R regions. However, after 2010, the average GCI in B&R regions surpassed that of non-B&R regions and has kept rising. The average GCI in non- B&R regions has remained almost stagnant. The change in the average score of the GCI in the past eleven years in B&R regions increased 0.2216 (4.3573–4.1357), or 5.09%. In non- B&R regions, it increased 0.0377 (4.2208–4.1831), or 0.01% (Fig. 51.2). The financial tsunami erupted in the United States in 2008. From that year onward, competitiveness in the B&R regions kept improving but in non-B&R regions kept dropping until 2013, the year the BRI was announced. Since 2013, the competitiveness in both B&R regions and non-B&R regions has increased gradually, but the

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Table 51.1 B&R partner economies included in the analysis South-east Asia

South Asia

Central and West Asia

Middle East and North Africa

Central and East Europe

Brunei Darussalam

Bangladesh

Armenia

Bahrain

Albania

Cambodia

Bhutan

Azerbaijan

Egypt

Bosnia and Herzegovina

Indonesia

India

Georgia

Israel

Bulgaria

Lao PDR

Nepal

Iran, Islamic Rep

Jordan

Croatia

Malaysia

Pakistan

Kazakhstan

Kuwait

Czech Republic

Myanmar

Sri Lanka

Kyrgyz Republic

Lebanon

Estonia

Philippines

Mongolia

Oman

Hungary

Singapore

Tajikistan

Qatar

Latvia

Thailand

Saudi Arabia

Lithuania

Timor-Leste

Syria

Macedonia, FYR

Viet Nam

Turkey

Moldova

United Arab Emirates

Montenegro

Yemen

Poland Romania Russian Federation Serbia Slovak Republic Slovenia Ukraine

former made slightly more improvement. The higher competitiveness score in the B&R regions clearly implies that their economies can maintain better improvement than can the non-B&R regions in the years to come.

51.5 Domain-Specific Comparisons The competitiveness of an economy hinges on different stages of development. Less developed economies compete through low cost of production; intermediately developed economies compete with efficiency and developed economies compete with innovation (Snowdon 2006). Domain-specific comparisons are to compare B&R

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Fig. 51.2 The average scores of GCI in Belt and Road and non-Belt and Road economies: 2007– 2018 (Source The Global Competitiveness Report 2007–2018)

regions and non-B&R regions by basic requirements, efficiency enhancers, and innovation and sophistication factors. These domains correspond to a stage of economic development in each economy. The basic requirements group pillars in the factor-driven stage of economic development. Economies in this stage compete with their factor endowments. The competitiveness at this stage of development depends on well-functioning public and private institutions (pillar 1), a well-developed infrastructure (pillar 2), a stable macroeconomic environment (pillar 3), and a healthy workforce that has received at least a basic education (pillar 4). In 2008–2009, the average score of Basic Requirements in B&R regions (4.4377) was slightly lower than that of non-B&R regions (4.4935). In 2018–19, the average score of Basic Requirements in B&R regions (4.7215) was higher than in non-B&R regions (4.5157). In the past decade, the average score of Basic Requirements in B&R regions increased 0.2838 (4.7215–4.4377) or 6.40%; in non-B&R regions, it increased 0.0224 (4.5157–4.4933), or 0.05%. In other words, B&R regions made more improvement in Basic Requirements than did non-B&R regions in the past decade. Since the commencement of the BRI, significant contributions in economic dynamism have been seen. Efficiency Enhancers group pillars in the efficiency-driven stage of development. In this stage, economies compete to develop more efficient processes of production and higher-quality products. Competitiveness is driven by higher education and training (pillar 5), efficient goods markets (pillar 6), well-functioning labor markets (pillar 7), developed financial markets (pillar 8), the ability to harness the benefits of existing technologies (pillar 9) and a large domestic or foreign market (pillar 10). In 2008–2009, the average score of Efficiency Enhancers in B&R regions was 3.9614; in non-B&R regions it was 4.0417. The latter had a far higher score than

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did the former. In 2018–19, both the scores in B&R regions (4.2326) and non-B&R regions (4.1253) rose, but the former seemed to make more improvement. In the past decade, in B&R regions, the change was 0.2712 (4.2326–3.9614), or 6.85%. In non-B&R regions, the change was 0.0836 (4.1253–4.0417), or 2.07%. Again, the economies in B&R regions showed more improvement in Efficiency Enhancers than did the economies in non-B&R regions in the past decade. Innovation and Sophistication Factors group pillars in the innovation- driven stage of economic development. Economies compete to use the most sophisticated processes of production (pillar 11) and by innovating new ones (pillar 12). Countries in non-B&R regions are mostly developed economies, so they have far higher scores in this domain. In 2008–2009, the average score of Innovation and Sophistication Factors in B&R regions was 3.6308, and in non- B&R regions it was 3.8570. The gap in scores between them was large. From 2018 to 2019, the scores of B&R regions (3.7425) and non-B&R regions (3.8811) both increased over those in 2008–2009, but the scores in non-B&R regions are still higher than are the scores in B&R regions. In the past decade, the average score in B&R regions increased 0.1117 (3.7425– 3.6308), or 3.08%. In non-B&R regions, it increased 0.0241 (3.8811– 3.8570), or 0.62%. Clearly, even in innovation, although non-B&R regions had far higher average scores, B&R regions made more progress (Fig. 51.3).

51.6 Comparisons of Specific Pillars Change in specific pillars may give a more in-depth view of the competitiveness of each region. Pillar 1 is an assessment of institutions, which is “the efficiency and the behavior of both public and private stakeholders” (Schwab 2018, p. 317). It measures quality of the legal and administrative framework, and accounting and reporting standards and transparency. From 2008 to 2009, the score of B&R regions increased 0.0811, while that of non-B&R regions increased 0.0197. This difference indicates more room for B&R regions to improve in this pillar. The change between 2017 and 2018 for B&R regions is 0.0226, while that for non-B&R regions is − 0.0444. B&R regions have more improvement than make than do non-B&R regions since the implementation of the BRI. Pillar 2 is an assessment of infrastructure including infrastructures for transportation, electricity supplies and telecommunications network. Comparing 2008 to 2009, the score of B&R regions increased 0.0664, while that of non- B&R regions increased 0.0127. The change between 2017 and 2018 for B&R regions is 0.1288; that for nonB&R regions is 0.0329. B&R regions made more improvement than did non-B&R regions. Pillar 3 is an assessment of macroeconomic environment. It measures the stability of the macroeconomic environment for business. It is fundamental for the sustainable growth of the economy. From 2008 to 2009, the score of B&R regions increased 0.0294, while that of non-B&R regions increased 0.0564. However, the change

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Fig. 51.3 The average scores of three domains in Belt and Road and non-Belt and Road economies: 2007–2018 (Source The Global Competitiveness Report 2007–2018)

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between 2017 and 2018 for B&R regions is 0.0980, while that for non-B&R regions is − 0.0388. B&R regions show more improvement than do non-B&R regions in the most recent period. Pillar 4 is an assessment of health and primary education. It is believed that investment in health and basic education can increase the efficiency and productivity of individual workers. From 2008 to 2009, the score of B&R regions increased 0.0108, while that of non-B&R regions increased − 0.0035. This difference indicates very little change for both B&R regions and non-B&R regions in this pillar. The change between 2017 and 2018 for B&R regions is 0.0638, while that for non-B&R regions is 0.0236. B&R regions still show improvement over non-B&R regions in the most recent period. Pillar 5 is an assessment of higher education and training. It measures secondary and tertiary enrolment rates, quality of education, and staff training. From 2008 to 2009, the score of B&R regions increased 0.0504, while that of non-B&R regions increased 0.0146. However, the change between 2017 and 2018 for B&R regions is 0.0175, while that for non-B&R regions is -0.0032. B&R regions still show improvement over non-B&R regions in the most recent period. Pillar 6 is an assessment of goods market efficiency. It measures the right mix of products and services given supply-and-demand conditions can be produced and traded. From 2008 to 2009, the score of B&R regions increased 0.0251, while that of non-B&R regions increased 0.0267. The change between 2017 and 2018 for B&R regions is 0.0020, while that for non-B&R regions is 0.0070. Though the change is positive, both BRI and non-B&R regions did not improve much in the most recent period. Pillar 7 is an assessment of labor market efficiency. A high score indicates that workers are allocated to the most effective use and provided with incentives to give their best effort and high labor market flexibility to shift workers from one economic activity to another. Comparing 2008 with 2009, the score of B&R regions increased 0.0458, while that of non-B&R regions increased 0.0197. This change is very small for both B&R regions and non-B&R regions. However, the change between 2017 and 2018 for B&R regions is − 0.0275, while that for non- B&R regions is -0.0014. Neither BRI nor non-B&R regions improved in the most recent period. Pillar 8 is an assessment of financial market development, including sophisticated financial markets to make capital available for private sector investment from a sound banking sector, regulated securities exchanges, venture capital, and other financial products. From 2008 to 2009, the score of B&R regions increased − 0.0025, while that of non-B&R regions increased − 0.0845. This decline was larger in non-B&R regions than in B&R regions. The change between 2017 and 2018 in B&R regions is 0.0480, while that for non-B&R regions is 0.0212. The change in B&R regions was higher than in non-B&R regions in the most recent period. Pillar 9 is an assessment of technological readiness. It measures the agility to adopt existing technologies to enhance the productivity of industries. Special emphasis is on capacity to leverage information and communication technologies to enhance innovation and competitiveness. From 2008 to 2009, the score of B&R regions increased 0.1946, while that of non-B&R regions increased 0.1009. The change between 2017

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and 2018 for B&R regions is 0.1925, while that for non- B&R regions is 0.0411. The change in B&R regions was higher than in non- B&R regions in the most recent period. Pillar 10 is an assessment of market size, both domestic and foreign, both of which allow for economies of scale. From 2008 to 2009, the score of B&R regions increased 0.0849, while that of non-B&R regions increased 0.0198. The change between 2017 and 2018 for B&R regions is 0.1050, while that for non- B&R regions is 0.0366. The change in B&R regions is higher than in non-B&R regions in the most recent period. Pillar 11 is an assessment of business sophistication. It measures the quality of a country’s overall business networks and the quality of individual firms’ operations and strategies. Comparing 2008 with 2009, the score of B&R regions increased 0.0173, while that of non-B&R regions increased 0.0261. Though the change of score between B&R regions and non-B&R regions is small, B&R regions in general had a lower starting point than did non- B&R regions. However, the change between 2017 and 2018 for B&R regions is 0.0725, while that for non-B&R regions is 0.0540. The change in B&R regions is slightly better than that of non-B&R regions in the most recent period. Pillar 12 is an assessment of innovation. It measures sufficient investment in research and development, especially in the private sector, presence of high- quality scientific research institutions, and extensive collaboration in research and technological development between universities and industry and protection of intellectual property. Comparing 2008 to 2009, the score of B&R regions increased -0.0143, while that of non-B&R regions increased -0.0450. The difference between B&R regions and non-B&R regions is small. The change between 2017 and 2018 for B&R regions is 0.0261, while that for non-B&R regions is − 0.0136. The change in B&R regions was greater than that of non- B&R regions in the most recent period. To summarize, B&R regions are mostly developing economies. They have larger potential for growth in individual pillars. Similar to non- B&R regions, they strove to stimulate their economies after the financial crisis of 2008. The effect usually did not last long. However, the BRI turned out to be a booster and increased the competitiveness of those economies. Except pillar 6 (goods market efficiency) and pillar 7 (labor market efficiency), B&R regions had better performance in all pillars than did non-B&R regions in the most recent period or after the initiative was implemented in 2013 (see the spider maps). This suggests the BRI can stimulate or boost many fronts of competitiveness of economies, but the growth in competitiveness is still internally driven. The external effect of the BRI should not be overestimated (Fig. 51.4).

51.7 Key Findings and Research Limitations Based on the above findings, we can generally conclude that since the start of the BRI in 2013, the economies in B&R regions have experienced significant positive changes compared to the economies in non-B&R regions. Looking at the possible effect of the

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Fig. 51.4 The change of scores in each GCI pillar, 2008–2009 and 2017–2018 (Source The Global Competitiveness Report 2007–2018)

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BRI, one can see that since the “five- connectivity” can directly strengthen some of the pillars of an economy, e.g., infrastructure, taking part in the BRI is clearly beneficial (Zheng and Luk 2019). Since most economies in B&R regions are emerging, their infrastructure, macroeconomic environment and financial market are by no means sound and well established. Through the building of big infrastructure projects such as hydro power plants, high-speed railways, and port and container terminals, not only can transportation capability and natural resources usage be largely improved, but productivity and efficiency can be greatly increased. Moreover, the change in GCI for both B&R and non- B&R economies from 2008 to 2018 indicates a profound change in the world economy. The continuous economic growth of the Chinese economy since the 1980s seems to be the most important force driving growth in its neighboring economies (the B&R economies) even after the financial tsunami. In contrast, the financial tsunami brought serious negative impact to non-B&R regions, especially developed economies. Though it is necessary to be cautious when contributing all changes in the competitiveness of B&R economies to the initiative, it is also difficult to deny the influence of the China factor on the world economy, especially to B&R economies after the 2008 financial tsunami. This point can also be supported by similar findings that the regions have shown dynamism in the world economy in recent decades (Pricewaterhouse Coopers 2017). However, there are some shortcomings to bear in mind. Firstly, not all countries or economies in B&R regions are included in the GCI, so the picture sketched is by no means complete. Secondly, GCI only focuses on economic and financial aspects, so non-economic aspects such as policy coordination and people-to-people bonds are not available for closer evaluation, and the impact may be underestimated. Thirdly, the standard or criteria for calculation for CGI are from the Western Christian culture or values, but many B&R regions are under Islamic, Buddhist or Confucian influence; hence, the index may be tinged with cultural prejudice.

51.8 Policy Recommendations Policy Inclusiveness In the last five years, the BRI has greatly reduced trade cost through construction of infrastructures along B&R economies, as suggested by the comparison. In general, the BRI has increased the welfare for those economies. However, the improvement was very small in individual pillars like goods market efficiency and labor market efficiency of B&R economies in comparison with non- B&R economies. This may suggest the benefits brought by the BRI have an unequal influence and slow effect on some sectors within those economies. For example, the labor market may be slow to adjust to the change brought by BRI. The increased efficiency of trade may also bring more economies into direct competition with goods manufactured in China. As

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suggested by the World Bank, the BRI may generate “trade-induced adjustment cost” (World Bank 2019, p. 94), including labor displacement and import competition. This problem may require more regional complementary policies to address. Social security, housing, labor protection, training and mobility could be improved through policy coordination between China and B&R economies. The intention is to have more social groups in those economies benefit from the BRI rather than be excluded. The policy-level coordination could direct investment to better use and serve the welfare of the general public in those economies.

Sustainability BRI’s focus is to promote trade efficiency through infrastructure construction and extraction of natural resources. If poorly managed, these projects could generate huge environmental and social risks. Some hydro power projects, road and rail projects in ASEAN countries have raised concerns about biodiversity, pollution, landslides, flooding, soil erosion, deforestation, etc. Many B&R economies are located in environmentally vulnerable regions where infrastructure projects may incur high risks for sustainability. As suggested in the BRI, green development is a principle set to reduce the environmental costs. But some reports suggest this principle is still not well supported in many projects (Tsinghua PBCSF 2019; World Bank 2019, pp. 114–122). This problem leads to many doubts and suspicions of the BRI. To follow the principle of green development, the BRI could require integration of environmental and social cost–benefit assessment into project design and auditing before and after implementation, avoid ecologically vulnerable locations, and make better arrangements to restore or to mitigate, and to compensate for impacts. This may also require policy coordination among B&R economies to follow the current international standards and frameworks for best practice. From its long history of trading with South-eastern Asian economies, Hong Kong (China) has knowledge of and experience in managing environmental, social, and governmental (ESG) risks. For the first time, Hong Kong successfully raised US$1 billion in the first green bond in 2019. Hong Kong could offer a full package of solutions from project design, finance, management, to assessment for sustainability of BRI-related projects.

Public Engagement One of the doubts about BRI is the possible debt burden to B&R economies, most of which have weak fiscal foundations. Some B&R economies also have problems controlling corruption in governance. The current implementation of the BRI has seen more involvement of state-owned enterprises and state- level engagement. This opaque arrangement of information dissemination may exacerbate doubts about the fiscal and governance risks. Public engagement should be encouraged for the whole

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initiative, especially in specific projects. The first step could be increased information transparency on terms of financing the specific projects and open projects for more public–private partnership both locally and internationally. If successfully implemented in this way, the BRI could help to improve the competitiveness of institutions along with that of infrastructure in B&R economies in the long run. As a financial centre, Hong Kong (China) could provide financial support as well as professional management services to BRI projects according to international best practice.

Mechanism for Dispute Resolution In the last five years, a few infrastructure projects have faced suspension under various controversies like the Malaysia east coast rail link and Jakarta-Bandung high-speed rail projects. Some of them were due to transition of power and some were due to mismanagement. These events raised concerns about disputes from geopolitics to management in BRI-related projects. The current arrangement for dispute resolution is through state-level political negotiation, which is costly and time-consuming. As the BRI expands, it is possible that more disputes at various levels could occur, and it may not be possible to have all of them resolved through top-level negotiations. To promote policy coordination, the BRI should encourage more resolution of disputes through established means or innovation of institutions. Together with B&R economies, China could help to establish multilateral mechanisms to resolve disputes by setting specialized centres or organizations. Through these centres or organizations, some principles of dispute resolution could be established and implemented, which could also contribute to international governance in the long run. Hong Kong (China) is a leading centre for dispute settlement in the Asia–Pacific region. Its strong legal infrastructure, abundance of professional expertise and advantageous geographic location could facilitate BRI in establishing mechanisms of dispute resolution. To conclude, though B&R economies seemed to have better performance than do non-B&R economies in most factors of competitiveness in the last decade, this does not suggest a zero-sum competition between the groups. Non- B&R economies also recovered from the financial tsunami and made progress. The BRI, as suggested by the latest World Bank report (2019), is deemed to benefit participating economies as well as other economies, because the improved infrastructures could have more economies accessed and connected. A Deloitte report compared the BRI to a journey closer to its start than to its end and suggested investors take a longer view on the projects: “While we do not downplay the risks, we believe they are less severe than many assume” (Embracing the BRI ecosystem in 2018, 2018, p. 2).

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Suggested Reading Armstrong, H & Taylor, J 2000, Regional Economics and Policy, Blackwell, Oxford. Barro, RJ & Sala-i-Martin, X 1995, Economic Growth, McGraw-Hill, Boston, MA. Belt and Road Portal 2019, “China’s Goods Trade with B&R Countries Reaches over 6 Trillion Dollars”, Belt and Road Portal, available from: https://eng.yidaiyilu.gov.cn/qwyw/rdxw/86301. htm. Bloom, DE & Saches, JD 1988, “Geography, Demography and Economic Growth in Africa”, Brookings Papers on Economic Activity, No. 2. Cai, P 2017, Understanding China’s Belt and Road Initiative, Lowy Institute, Vienna, available from: http://hdl.handle.net/11540/6810. China Daily, global version, 20 February, pp. 1 & 3. “Countries welcomed to join in mutual benefits of Belt, Road”, 2018, China Daily, 4 September. “Embracing the BRI Ecosystem in 2018” 2018, Deloitte Insights, Deloitte, Hong Kong. Friedman, TL 2006, The World is Flat: The Globalized World in the Twenty- first Century, Penguin Books, London. Gallup, JL, Gaviria, A & Lora, E 2003, Is Geography Destiny? Lessons from South America, The World Bank, Washington, DC. Hillman, J E 2018, “China’s Belt and Road Initiative: five years later”, Centre for Strategic & International Studies, available from: https://www.csis.org/analysis/chinas-belt-and-road-intiat ive-five-years-later-0. Keynes, JM 1936, The General Theory of Employment, Interest, and Money, Macmillan, London. Krugman, P 1995, Development, Geography and Economic Theory, MIT, Cambridge, MA. Li, Y & Schmerer, HJ 2017, “Trade and the New Silk Road: Opportunities, Challenges, and Solutions”, Journal of Chinese Economic and Business Studies, vol. 15, no. 3, pp. 205–213. Liu, WD & Dunford, M 2016, “Inclusive Globalization: Unpacking China’s Belt and Road Initiative”, Journal of Area Development and Policy, vol. 1, no. 3, pp. 323–340. Mardell, J 2017, “One Belt, One Road, and One Big Competition”, The Diplomat, 15 December. McArthur, JW & Sachs, JD 2001, “The Growth Competitiveness Index: measuring technological advancement and stages of development”, The Global Competitiveness Report: 2001–02, Oxford University Press, New York. National Development and Reform Commission, Ministry of Foreign Affairs, and Ministry of Commerce of the People’s Republic of China, with State Council authorization 2015, Vision and actions on jointly building Silk Road Economic Belt and 21st-Century Maritime Silk Road, available from: http://en.ndrc.gov.cn/newsrelease/201503/t20150330_669367.html. “One belt, one road and Many Questions” 2017, Financial Times, 14 May. Porter, M 1979, “How Competitive Forces Shape Strategy”, Harvard Business Review, vol. 57, no. 2, pp. 137–145. Porter, M 1985, Competitive advantage, The Free Press, New York. Porter, M 1990, “The competitive advantage of nations”, Harvard Business Review, vol. 68, no. 2, pp. 73–93. Porter, ME 2001, “Enhancing the Microeconomic Foundations of Prosperity: The Current Competitiveness Index”, in ME Porter (ed), The Global Competitiveness Report: 2004–2005. Oxford University Press, New York. Porter, ME 2005, “Building the Microeconomic Foundations of Prosperity: Findings from the Business Competitiveness Index”, in ME Porter, K Schwab & A Lopez-Claros (eds), The Global Competitiveness Report: 2005–2006, World Economic Forum, Geneva. Pricewaterhouse Coopers 2017, The Long View: How will the Global Economic Order Change by 2050? available from: https://www.pwc.com/gx/en/world-2050/assets/pwc-the-world-in-2050full-report-feb-2017.pdf. Rostow, W 1960, The Stages of Economic Growth, Cambridge University Press, Cambridge. Sala-i-Martin, X & Artadi, E 2004, “The Global Competitiveness Index”, in ME Porter (ed), The Global Competitiveness Report: 2004–05, Oxford University Press, Oxford.

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Schwab, K (ed) 2018, The Global Competitiveness Report: 2017–2018, World Economic Forum, Geneva. Smith, A 1776, An Inquiry into the Nature and Causes of the Wealth of Nations, in RH Campbell & AS Skinner (eds). Clarendon, Oxford. Snowdon, B 2006, “The Enduring Elixir of Economic Growth: Xavier Sala-i- Martin on the Wealth and Poverty of Nations”, World Economics, vol. 7, no. 1, pp. 73–130. Solow, R 2000, Growth Theory: An Exposition, Oxford University Press, Oxford. State Information Center 2017, Big Data Report of Trade Cooperation under the Belt and Road Initiative 2017 (simplified version), available from: http://www.sic.gov.cn/archiver/SIC/UpFile/ Files/Default/20170331094541370706.pdf (In Chinese). Suidek, T & Zawijska, A 2014, ‘Competitiveness in the economic concepts, theories and empirical research’. Oeconomia, vol. 13, no. 1, pp. 91–108. Tsinghua PBCSF 2019, Decarbonizing the Belt and Road: A Green Finance roadmap, available from: https://www.climateworks.org/wp-content/uploads/2019/09/Decarbonizing-the-Belt-andRoad_report_final_lo-res.pdf. World Bank 2019, “Belt and Road economics: opportunities and risk of transport corridors”, Advance Edition. World Bank, Washington, DC. License: Creative Commons Attribution CC BY 3.0 IGO. Zheng, V & Luk, R 2019, “A bounty of benefits, thanks to “BRI factor”.

Chapter 52

17 + 1 Regional Format Reviewed in the Central and Eastern Europe (CEE) Rudolf Fürst

This paper deals with tracing the Chinese unprecedented economic and political presence in the eastern periphery of the European Union through the sub-regional cooperation format 17 + 1. This multilateral platform is territorially comprised by Central European Visegrad Four (V4), namely Poland, Hungary, Slovakia and Czech Republic; Baltic states (Lithuania, Latvia, and Estonia), and Balkans (Serbia, Croatia, Slovenia, Montenegro, Macedonia, Bosnia and Herzegovina, Bulgaria, Romania, Albania), and since 2019 also Greece. Historically, these countries belonged to the European, Russian, Turkish and US sphere of interest and influence, while China is (except for the post WW2 period until 1980s) a brand new and non-traditional actor there. When the new sub-regional group of 16 + 1 was established in 2012, its broader context with the Chinese go-out strategy and similarities with other China designed regional formats in Africa (The Forum on China-Africa Cooperation, FOCAC), and Latin America (China-Community of Latin American and Caribbean States Forum CELAC), raised concern in the EU as the most of the 16 member states have been already included within the framework of the EU-China strategic partnership. The format of 16 + 1 was in academic writings broadly explained as the infrastructure, transportation and energy sector focused international cooperative scheme, which is linked with the Chinese investment boom after 2010 and the PRC´s financial incentives. Consequently, after the 2013 President Xi Jinping´s official announcement of the global project of the Belt and Road Initiative (BRI) raised the international attention as a game changing global impetus that might speed up the geopolitical shift from West towards rising China, which increased its diplomatically activities through bilateral and, even more than before, multilateral strategies. The new challenge to the US dominated Western liberal order is perceived as a set of new concerns that

R. Fürst (B) Institute of International Relations Prague, Prague, Czechia e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_52

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deal with spreading the Chinese influence into Europe and European regions, undermining the transatlantic goals and rising economic and technological competition up to so far unprecedented level. This paper summarizes the author´s existing research works on CEE-China relations after 2010 and provides new updates on 16 + 1 agenda as it is perceived by CEE academia. The added content above the author’ s already existing research is about the changing nature of EU-China strategic partnership after 2016 when a more assertive approach of the EU, as well as the German and French leadership, was adopted, as the big European states and Brussels call for more balanced economic agenda and investment screening systems. The perception of the PRC is in the EU being shifted from the strategic partnership more towards the strategic competition. Finally, this paper introduces the new theme of the US growing diplomatic efforts to confront the Chinese influence in Central Europe.

52.1 The CEE States Hope for an Economic Stimulus from China The 16 + 1 CEE member states expected the rising inflow of the FDI from China into infrastructure as the relevant economic stimulus that might speed up their catching up with the rich EU western part, and to follow up the dynamics of the Western EuropeChina agenda. For sure, the multilateral format of 16 + 1 accelerated the highlevel political ties, the annual meetings of prime ministers, and ministerial sectoral meetings brought about an important upgrade to the CEE states’ China agenda. Besides, their economic diplomacy made great progress, too, much further above the limited capacity of small states. In addition to this, the progress in the field of culture, academia, education, research and science, and people-to-people contacts, ought to be regarded as the obvious positive outcome. However, the early enthusiasm for China´s investment surge into the CEE is recently over. Except for the Balkans (mainly Serbia, and Bosnia), which received relevant energy and infrastructure investments from China, the other CEE states, such as the V4 and the Baltic states, remained dissatisfied with the real stock of the FDI from China. The first systematic research on the 16 + 1, that was conducted at the IIR in Prague since 2012, [1] conceptualized the national interest, for a bottom-up research of all the 16 individual CEE states and their priorities in bilateral agenda with China. The concept of the national interest is based in the three criteria, such as, relevance, (outwards) acceptability, and consensus [2]. All the three criteria were operationalized through a system of ratings, with the use of ranking from 1 (minimum) to 10 (maximum). The result was displayed in Table 52.1. Table 52.1 reveals differences and diversities in perceptions of all the 16 countries and existing levels of mutual interests between individual states and China. The ratings of Hungary, Poland, and several Balkan states (Serbia, Albania, Romania, Bulgaria) proved their more favorable standing towards China (see the highest ratings

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Table 52.1 China and the eyes of European countries and European countries in the eyes of China China in the view of European states

Czechia Hungary Poland

1. 5/8 8/8 6/7

2. 3/4 3/3 7/5

3. 4. 5. 6. 2/6 8/8 6/7 3/3 8/5 1010 9/9 9/9 3/3 8/8 6/6 6/6

Slovakia

3/3 3/2 2/1

7/6 7/5 7/5

Estonia

3/3 1/1 1/1

6/6 7/7 3/3

Lithuania

4/4 1/1 1/4

Latvia

4/7 1/1 1/5

Average From the China´s view 1-6 7. 5/6 2/4 8/7 3/4 6/6 4/4

8.

Average Average 7-9 total

9. 2/3 2/5 2/3 4/4 4/3 3/3

2/4 3/4 4/3

3/5 5/6 5/5

5/4 2/2

1/1 1/1

1/1

3/3

4/4 2/2

1/1 1/1

1/1

2/2

7/7 8/8 2/2

4/4 2/2

1/1 1/3

1/2

3/3

7/7 7/7 3/3

4/5 2/4

1/2 1/5

1/4

3/4

Albania

7/6 4/4 2/5 1010 109 8/8

7/7 3/3

2/2 1/3

2/3

4/5

Bulgaria Bosnia/Her.

8/8 6/5 5/5 1010 8/8 9/9 5/5 3/3 2/6 7/9 6/6 7/8

8/8 4/4 5/6 2/1

3/3 6/6 1/2 2/5

4/4 2/4

6/6 3/4

Montenegro

5/5 5/5 1/3

7/7 6/6 8/8

5/6 1/1

1/1 1/1

1/1

3/3

Croatia

4/4 4/3 1/1

6/6 4/4 5/5

4/4 2/2

3/1 1/1

2/1

3/3

Macedonia Romania

4/4 3/2 1/2 8/8 7/7 9/9 8/7 6/5 3/6 1010 8/8 7/7

5/5 2/2 7/7 4/4

1/2 1/1 3/3 5/5

1/2 4/4

3/4 5/5

Slovenia

4/3 5/4 1/1

7/7 6/6 5/5

5/5 3/3

2/2 1/1

2/2

3/3

Serbia

9/9 2/2 5/7

9/9 8/8 9/9

7/7 5/6

2/2 3/5

3/3

4/5

Note The numbers represent answers to the question “Was the 1 + 16 forma beneficial?” and countries’ assesment of priorities and mutual perceptions: Individual countries versus China: 1. Political relevance (of China). 2. Trade relevance. 3. Investments inflow relevance. 4. Consensus on economic cooperation (with China). 5. Consensus on political relations. 6. Political acceptability (of China). China versus individual countries: 7. Political relevance. 8. Trade relevance. 9. Chinese outflow investments relevance (country receiving investments from China). * 2014, *Update in 2016 *Average total in 2016 .

Average total on the right side of the chart). The IIR research ended in 2016, so that the afterwards developments have not been traced. Baltic states increased their active agenda with Chine (Summit in Riga), and finally, the Balkans-Chinese agenda remained as the most active in terms of investments, infrastructure, political, and cultural ties. The fluctuation of political relations with Beijing continued mainly in Poland and Czech Republic due to different views of democratic values, human rights, and the issue of Tibet. The trend of temporary rising prominence of the Czech Republic (President Xi Jinping´s visit in Prague in 2016), Latvia (16 + 1 summit in Riga in 2016), Hungary (the Summit in Budapest 2017), Bulgaria (Summit in Sofia 2018), and Croatia (Summit 2019 in Dubrovnik) were important updates at tracing the 16 + 1 agenda. In Czechia, media coverage of the Shanghai Based CEFC group investments in the country was mixed. Other recent events have also had some adverse impact, as were for example tough anti-Huawei security alert in Prague (2018), and also Prague City representative’s decision to terminate the Prague-Beijing sister city agreement due to the “One China Principle” formula that was included in the text. These events altogether signalled the worsening of public opinion about ties with China. There was similar hesitancy about China also in Poland.

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The most challenging point, however, that is slowing down rapprochement of the CEE states with China, is the indistinctive effect of trade and investments ties with China. The cumulative investments (FDI) flows to Visegrad 4 countries reached approximately 1 bln EUR in Czechia (Czech National Bank) and Poland (Rhodium Group), 3,5 bln EUR in Hungary (Hungarian and Rhodium Group data differ). Except of Balkans (mainly Serbia, Bosnia, and Herzegovina), the Hungary is the main FDI receiver (4 bln EUR), as the single large project BorsodChem (regional leading chemical raw material manufacturing company) absorbed 70 per cent of the Chinese FDI in the county. The trade volumes with China increased more than the volume of exports to China. It is certain that the acceleration of political dialogue with Beijing, active attendance at the 16 + 1 sectoral groups, and various ministerial meetings significantly stimulated China’s position as the perspective partner, however, the basic ground for economic policies remained on the bilateral level. All the 17 states exploit the multilateral platform for their individual priorities, because the multilateral 17 + 1 mechanism does not stimulate the mutual strategies among the European member states, which in fact remain competitors. Besides, the lack of Chinese investment stimulation effects in terms of technology and manufacturing productivity is obvious in comparison with other FDI and structural funds from the Western Europe, and FDI from Japan, and South Korea. The structural economic compatibility and sectoral preferences draw lines inside the 17 + 1 platform: most of the member states do not see substantial benefits, while some of them experience increasing prominence. Therefore, the southern part of the 17 + 1 platform altogether with Mediterranean states like Greece and (non-members state) Italy become significantly more relevant in terms of sea transportation and connectivity. Adding up Greece into the 17 + 1 to expand the platform confirms the shifting gravity of the axis to southwards, altogether with Chinese investments to Italian Sea ports Trieste and Venice.

52.2 EU’s Reconsidering China as the Strategic Competitor and the US-China Rivalry Extending into the CEE In Western Europe, except for doubts about the additional value of the 17 + 1 format and concern of undermining the EU unity in relations with China, the general perception in Brussels remained reserved, regarding the Chinese presence in eastern part of the EU comparatively harmless [3]. However, the new EU Communication in 2019 titled “EU-China: A Strategic Outlook” [4] provides a more assertive perception of China by calling the Asian partner a “strategic rival”, while aiming to attain “more balanced and reciprocal trade and investment relationship”, stronger security of strategic IT infrastructure and 5G networks, and establishing screening systems for foreign investments. Similarly, assertive language streams from French and German political statements and official documents. The paper issued by the Federation of

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German Industries mentioned China as a “systematic competitor” [5]. The European Commission proposed frameworks for screening mechanism received in 2019 support of 26 member states (out of all 28), one of the two missing was UK, which is at the point of leaving the EU, and the other state was Italy [6]. French President Macron suggested contest against the Chinese competition through EU level measures, such as supporting leading European industrial corporations and strengthening European technological sovereignty. President Macron’s rhetoric, like the language of other European leaders, combines issues of protecting European industry, creating jobs, maintaining technological competitiveness vis-àvis China’s state economy, and asserting European values. Besides, the Chinese partially restrictive attitude towards European capital investments, goods, and ideas flow is in Europe perceived as non-reciprocal to European wide openness. The China engagement-focused polarity of the European policy hopes to take advantage of the EU-China partnership on sustaining the multilateral trading system, joint efforts on the challenge of global climate changes, and dealing with global security issues. Generally, the European Union’s position towards China is increasingly competitive, yet not unambiguously negative and not complied for containment of China. The BRI project, however, despite its partially positive appreciation in Brussels and leading European states, still raises doubts about Chinese strategic plans and intentions. The Chinese contribution to building the European infrastructure is generally not unwelcome, however, the EU authorities insist on EU inwards internal rules for procurement of public investment bids and trade rules to be respected.

52.3 The US Re-Focusing on the CEE Compared to the EU’s rising assertiveness towards China, the US President Donald Trump administration imposed rather openly confrontational methods to impose hedging in China globally. The US trade and technology conflict with China also had negative effect on the EU-China agenda, also including the CEE states, which are still going through post-communist structural transformation in their efforts to catch up with Western Europe. The trade friction between USA and EU and the US import tariffs on European exports significantly raise concerns of economic prospects in all of Europe, including the post-communist states. The International Monetary Fund (IMF) Director Christine Lagarde, and the President of the European Central Bank (ECB) Mario Dragi pointed to Central and Eastern European states’ structural vulnerability of that kind, and explicitly mentioned the cases of Romania, Slovakia, Czech Republic, and Poland [7]. China’s growing presence in Central and Eastern Europe through the 17 + 1 regional platform has been identified by US government bodies as a problem of the region (especially the V4), in which China has increased its influence. Wess Mitchell, the former US Deputy Secretary of State for European and Eurasian Affairs, pointed to Central and Eastern Europe, where “geopolitical competition was felt” as a region where the US competes with Russia and China [8]. In addition, Foreign Secretary

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Mike Pompeo during his visit in CEE (2019) in Budapest and Warsaw also mentioned strengthening ties with this region by pointing to rising Russian and Chinese influence there in connection with cybersecurity. The Sino-Russian alliance that may challenge the US Interests in Europe has been mentioned also by policy and security analysts in Foreign Affairs Magazine [9]. Allegations about joining efforts of Russia and China at establishing the alternative geopolitical block against the West-dominated international liberal system resonate through conservative think tanks, which shape opinion making for mainstream media. The unusually active bilateral agenda between US and V4 states was also confirmed by high-level visits of all four V4 states’ leaders (one President and three Prime Ministers) in Washington during March-June 2019. The transatlantic ties are crucial theme of all these V4 states, which negotiated in the White House their security and economic themes. Unlike the Balkan states and Greece, the V4 group (except of Hungary), and the Baltic states pursued a strong pro-Western policy with less determined pro-Chinese positions, regardless of the current agenda, through the 17 + 1 multilateral platform.

52.4 Conclusion China’s efforts to develop positive South-South economic and social models that can stimulate developing countries in Africa and Latin America and to some extent in Eastern European countries (Belarus, Ukraine, Moldova) and parts of the Balkans before joining the European Union, are not for all platform members of the 17 + 1, which are already EU Member States, a major economic benefit. The economic structural needs of transitive post-communist states in Europe are closer the EU and Western European hub. The Chinese historically so far unprecedented infrastructure and heavy industry driven investment surge is applicable more feasibly in Balkan region and in a linkup with South European seaports. There are two trends happening simultaneously: first a territorial expanding of the 17 + 1 platform and its appreciation from the southern members, and second, its limited effectiveness in the northern part of the group of 17. This imbalance may suggest several themes for critical discussion about the future development of the 17 + 1 format. Assessing the BRI benefits by economic opportunities, establishing regional and municipal partnerships, establishing ties in transportation and logistics, developing cultural cooperation, multiplying contacts in academia, tourism, science and technology, health care. All these spheres might indicate progress in CEE-PRC rapprochement. However, the global international circumstances for promoting the China-CEE and 17 + 1 platform recently has been affected by Europe’s reaction to growing Chinese investments in Western Europe until 2016, Made in China 2025 strategic plan, and recent US policies. The EU has expressed concern about possible imbalance in this relationship. The issue of soft power is relevant in discussions about China. The involvement in international territorial disputes and human rights situation spurs internationally

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negative media perceptions. Besides, the insufficiently non-governmental actors and civil society based international public communication strategies reveal the systematic divergence of the Chinese and Western view of the soft power. The first seven years history of the 16 + 1 regional format (17 + 1 respectively) may indicate organization and institutional forestall, however, the political agenda set framework is not necessarily followed by relevant economic effects. In comparison, the other Asian stakeholders such as Japan, South Korea, and Taiwan (China), which are active in Europe and European regions, are less ambitious globally, but more effective in business and public diplomacies. The involvement of the CEE countries in the BRI is in line with China’s active regional agenda, yet in fact all they follow their own individual state national interests. The members of the 17 thus promote their bilateral goals, which are in diplomatic language generally presented as the multilateral activity. The recent trend of “decoupling”, that arises from trade and technology competition between the EU and China, together with the US trade war and global hedging present some challenges to Central and East European states in their Chinese policies. The increasing pressure on the CEE from the EU and the US due to their Chinese agenda and involvement in the 17 + 1 format is urging these states to assuage the western strategic partners about their loyalty and transatlantic NATO-related security commitments.

Suggested Reading 1. Rudolf Fürst and Filip Tesaˇr (eds) China’s Comeback in Former Eastern Europe: No Longer Comrades, Not Yet Strategic Partners. Praha: Ústav mezinárodních vztah˚u, 2013. 2. See for example Petr Drulák and Mats Braun (eds) (2010) The Quest for the National Interest. A Methodological Reflection on Czech Foreign Policy. Frankfurt am Main: Peter Lang AG Internationaler Verlag der Wissenschaften. 3. Jeremy Garlick, “China in Central and Eastern Europe: the case for and against offensive mercantilism”, Europe-Asia Studies, September 5, 2019, https://www.tandfonline.com/doi/abs/ 10.1080/09668136.2019.1648764?journalCode=ceas20. 4. Joint Communication to the European Parliament, The European Council and the Council, EU-China – A strategic outlook, Document of the European Comission, Strasbourgh, March 12, 2019, https://ec.europa.eu/commission/sites/beta-political/files/communication-eu-china-astrategic-outlook.pdf. 5. China-Partner and Systemic Competitor, BDI Publications, October 1, 2019, https://english.bdi. eu/publication/news/china-partner-and-systemic-competitor/ 6. Nicola Casarini, “Defend, Engage, Maximise: A progressive agenda for EU/China relations”, FEPS paper, October 11, 2019, https://www.feps-europe.eu/resources/publications/696-com_ publications.publications.html. 7. IMF’s Lagarde and ECB’s Draghi warn against troubling developments in trade war, CNBC, June 12, 2019, https://www.cnbc.com/2019/06/12/lagarde-and-draghi-warn-about-trade-war.html. 8. Winning the Competition for Influence in Central and Eastern Europe: US Assistant Secretary of State A. Wess Mitchell, October 19, 2018, https://www.atlanticcouncil.org/news/transcripts/ winning-the-competition-for-influence-in-central-and-eastern-europe-us-assistant-secretaryof-state-a-wess-mitchell. 9. Andrea Kendall-Taylor and David Shullman, “A Russian-Chinese Partnership Is a Threat to U.S. Interests”, Foreign Affairs, May 14, 2019, https://www.foreignaffairs.com/articles/china/201905-14/russian-chinese-partnership-threat-us-interests.

Chapter 53

“Belt and Road” Initiative Perspectives for Central Asian Countries Sharofiddin Nazarov

Central Asia (CA) countries, located in the center of the Great Silk Road, since long time have occupied an important place in strengthening interstate trade, economic and cultural ties. That is why for of the CA countries which do not have access to seaports participation in One Belt One Road (OBOR) project is of particular importance especially in the implementation of joint transport and communication projects. In this context, the OBOR project aimed at further expanding trade and economic cooperation between the countries of the Great Silk Road is also of great importance for the development of the economic potential of the Central Asian countries. Creation of transport corridors. Importance of this problem and the challenges associated with transport isolation requires an assessment of a number of economic, social, and political consequences of the implementation of the OBOR initiative for the CA countries. (1) For CA countries the corridors leading to Iranian and Pakistani ports are of particular interest, as it can provide access to the foreign trade cargo to the emerging markets of South Asia, the Middle East and Africa. In case of successful functioning of one of these corridors, CA countries get an opportunity to attract additional transit cargo flows. (2) Recent launch of the Angren-Pap electrified railway connecting the Ferghana Valley with the main part of Uzbekistan, which has reduced the distance to China by 270 km, the implementation of the China-Kyrgyzstan- Uzbekistan railway corridor, will become its key element ensuring the inclusion of Central Asian countries to a global network of logistics routes.

S. Nazarov (B) Center for Economic Research, Tashkent, Uzbekistan e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_53

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As a result, Central Asian countries receive direct access not only to China, but also to the Middle East. In addition, the functioning of this route will reduce the time of transportation of goods by 5–6 days. (3) There has been an increase in the transport of foreign trade cargo of CA countries by rail to and from China. In addition, an increase in the volume of transit traffic to and from China was also recorded. Recent positive dynamics in the commodity trade between CA countries and China increase mutual interest in the development of effective logistics schemes for the transportation of goods and development of transport infrastructure in general. (4) Creation of Uzbekistan-Tajikistan-China automobile route in order to diversify foreign trade transportation routes, primarily from the southern regions of CA (as an alternative corridor connecting the CA countries with China) through the territory of Tajikistan is of big importance for the successful realization of OBOR project. Implementation of regional development projects Along with the creation of transport and logistics routes connecting CA through China and Russia with the markets of South and Southeast Asia, as well as European countries, the implementation of specific programs and regional development projects involving large-scale projects in the field of trade, investment, and energy with involvement of mineral resources and the human capital of CA countries. In order to intensify the implementation of the projects along the Central Corridor, it is proposed to create a Transport Working Group consisted with the staff of competent ministries and departments of all the countries involved to the project to develop ideas about optimization of the route, of the cost of transportation of goods, to discuss tariffs for the transportation of goods by rail across the territories of CA countries. Implementation of joint projects in the field of high technology This initiative involves creation of integrated industrial technology parks, science and innovation clusters and free economic zones. Considering current supply and demand in the markets of CA countries, it seems most appropriate to start work on the production of mobile phones, sewing machines, building materials, solar collectors, and other competitive products. In addition, given the relevance of the development of the agricultural sector with implementation of the progressive scientific achievements, it seems appropriate to invest in creation of modern planting bases for the seed industry, into development of eco-parks and centers for processing agricultural products having very productive potential and reserves for cooperation in the areas of high technology. Wide use of huge tourism potential Comparative advantages of the CA countries in the tourism on the routes of the Great Silk Road with cities of a thousand-year history and rich culture, have not yet been revealed. It should be noted that, together with the Ministry of Commerce of the PRC, the restoration of historical monuments of the Khorezm region of the Republic of Uzbekistan is currently underway (the restoration of the Amir Tura Madrasah and the Khasan- Murad Kushbegi Mosque located in the Ichan Kala complex in Khiva city). However, such examples are sporadic.

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An active role of China in the economic transformation of Islamic Republic of Afghanistan (IRA) can also greatly contribute to the implementation of regional projects for the development of tourism in this neighboring country including restoration of historical and cultural heritage and development of material and raw materials in the territory of the IRA, as well as projects of creation of new tourist routes, passing through the territory of this country. China market access for goods with high value added from CA countries Removal of non-tariff barriers and restrictions for Uzbek products in Chinese market, in particular, for textile and knitwear, leather and footwear products, food and processed agricultural products, cable and wire products, building materials should be one of fundamental moments for the participation of CA countries in the implementation of the OBOR initiative. In this context, effective interaction on harmonization of customs procedures and tariff policies of all interested parties, the introduction of modern technical means of customs control (putting into operation of mobile inspection and inspection systems for cargo scanning) is very important to achieve this goal. Cooperation in the field of information and communication technologies Establishing a close partnership in ensuring information security, developing e-commerce by expanding cooperation with Chinese companies (such as Alibaba, Tencent, Jumore) would promote the promotion of goods and increase export of partner countries in the digital market. It is also important to cooperate in preparation of highly qualified IT personnel, organization of trainings and educational programs for young professionals from CA countries in the areas of telecommunications, Safe City, technology parks, etc. For the consistent implementation of the prospective areas of cooperation within the framework of the OBOR initiative, the following tasks are proposed. 1. Strengthening interconnectedness, joint promotion of the construction of international trunk corridors and the formation of an infrastructure network connecting the regions of Asia, Europe, and Africa. 2. Coordination of the socio-economic policies pursued by the countries of the region, which implies the strengthening of mutual political trust, looking for common ground in the field of economic development, regional cooperation, building a constructive dialogue to address pressing issues, and providing political support for the implementation of large projects. 3. Promotion of trade and investment by opening free trade zones, reducing trade barriers, and simplifying customs procedures. For now, within the framework of the OBOR between CA countries and China any trade projects (despite the presence of all the necessary prerequisites and conditions) have not been implemented. 4. The priority area of the investment partnership is the energy sector (exploration and development of coal, oil, gas, hydropower, and renewable energy sources).

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However, the process of attracting Chinese investment should be clearly coordinated with the priorities for the development of the fuel and energy sector and with mandatory observance of profitability parameters for CA countries. 5. Implementation of investment projects to organize the production of finished products and their export to China and other markets, identifying as an important area of attracting Chinese investment in the electrical industry, digital technology, telecommunications, the production of medical equipment and equipment, and new building materials. 6. Financial integration, which undermines opening of stocks and bonds market in Asia, promotion of the Asian Infrastructure Investment Bank and BRICS Development Bank, as well as the creation of financing mechanisms of the Shanghai Cooperation Organization (ShCO). In general, active promotion of the Silk Road Economic Belt initiative in CA, from one side it creates favorable conditions for ensuring regional security and sustainable development of the region. One of the positive results of this project seems to be a reduction in transportation costs, development of logistics, increase diffusion of innovation in the region. It will help to increase competitiveness of the goods and services, improvement of living standards and economic modernization. On the other hand, an implementation of this project should not become an instrument for increasing imbalances in the economy and social life in the region. For instance, due to the low level of diversification of the national economies of the CA countries after the implementation of transport projects linking with China on their territory can lead to negative balance of payment. In addition, it should initially provide measures and mechanisms to prevent the transformation of certain countries of the region into a mineral and raw materials appendage to rapidly growing economies. The likelihood of increased financial and investment dependence of certain less developed countries in the region is also high. The growth of geopolitical tensions and institutional rivalry between the major powers already poses certain challenges for the implementation of the OBOR initiative. The flaring up of the “trade war” with the United States, Washington’s introduction of higher tariffs on Chinese imports could have a negative impact on the economies of the countries involved into the OBOR initiative. The reduction in imports to the US market will force the Chinese government to expand exports of its products to other markets, especially those countries that participate in Chinese transport projects. Therefore, as the US-China crisis worsens, one can expect an increase in Chinese influence towards the countries that are part of the OBOR. In this regard, all participants in this major project must firmly adhere to a course to build balanced constructive and mutually beneficial cooperation with leading states in order to maintain geopolitical balance in the region by comprehensively diversifying their interaction in the political, trade, economic, investment, cultural, humanitarian, scientific, and technical fields.

Chapter 54

What China’s Belt and Road Initiative Means for the Republic of Tajikistan Mavzuna Karimova

China plays a significant role in the study and reconstruction of the historical Silk Road and exerts a profound influence on the political, economic, and cultural construction of the countries along the ancient Silk Road. It is beyond doubt that the revival of the Silk Road will significantly contribute to the economic, cultural and tourism development of Asia and the entire Eurasian continent. The Belt and Road Initiative (BRI) launched by China aims to build a vast economic space covering three continents, i.e., Asia, Europe, and Africa. It focuses on improving existing transportation infrastructure, building new transport corridors, and developing and expanding trade between countries around the world. From ancient times, the Central Asian countries stand out as an important channel that connects the East and the West in both civilization and trade, and their geographical location potentially positions them to regain their leading and essential role as the pivotal point on the Silk Road Economic Belt. The BRI represents a substantial practice of the Chinese government’s commitment to the concept of “Community of Shared Future for Mankind” and indeed one of China’s major foreign policies in recent years. Leveraging such a global project, the Chinese leaders made known to the world their insightful thinking and strategic vision of global governance and international relations, which is based on the solid foundation of China’s traditional culture. At this time, human survival is under great threats and challenges. Taking a responsible role as a great country, China sees the promotion of a community of shared future among all countries as the rational basis of its path. The PRC is shaped by its historical trajectory and cultural heritage in its view and practice of world politics, and consistently pursues an independent foreign policy of peace. This will help to advance a M. Karimova (B) Director of Foreign Economic Affairs, Institute of Economics and Demography, National Academy of Sciences of Tajikistan, Dushanbe, Republic of Tajikistan e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_54

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policy of mutual openness among countries and will also benefit the development of all countries. The BRI, currently the largest ongoing project for development, provides China with the opportunity to expand its presence and activities in a wide space, first and foremost in Asia and Europe, and to effectively increase the level of connectivity among the countries of the region. The BRI is a significant public good provided by the PRC to the international community and stands out as the most popular international cooperation initiative in the world today. As a public good, the BRI acts as an effective basis for many countries to interact with each other in trade, investment, social development, and economic progress, as well as to draw more attention to long-term human development goals. The BRI and the Sustainable Development Goals are interconnected and represent a win–win strategy. This is because the projects undertaken in the BRI framework pay special attention to the most critical tasks of the SDGs, such as addressing inequality and inclusiveness, and contribute favorably to their solution. Drawing on the best and most advanced global practice of developing the world order that is based on mutual respect and mutually beneficial cooperation among countries and peoples, the Chinese leaders innovatively proposed the concept of “Community of Shared Future for Mankind”, a new model of civilization in international relations. The PRC, under the leadership of President Xi Jinping, promotes the idea and practice of “Community of Shared Future for Mankind” by modern economic means, through developing and improving transportation systems, advocating the sharing of information globally, expanding the flow of trade, capital, and people, and establishing cooperation mechanisms or platforms for mutual understanding at different levels and in different fields. As economic and political globalization has steadily expanded, all countries are increasingly interconnected and interdependent, and human future has never been more closely bound together. Tajikistan is in full support of this global initiative launched by China and seeks its maximum benefit from it. More than 200 legal documents on bilateral cooperation were signed by Tajikistan and China, covering almost all important areas of cooperation. To promote the sustainable development of the economies of both countries, it is important to fulfill the Memorandum of Understanding between the Ministry of Economic Development and Trade of the Republic of Tajikistan and the Ministry of Commerce of the People’s Republic of China on the Promotion of Joint Construction of the Silk Road Economic Belt (Decree No. 292 of the Government of the Republic of Tajikistan, May 2, 2015). And the Memorandum of Understanding between the Academy of Sciences of the Republic of Tajikistan and the Ministry of Science and Technology of the People’s Republic of China on the Establishment of the Interdepartmental Commission on Scientific and Technological Cooperation (Decree No. 368 of the Government of the Republic of Tajikistan, August 26, 2017), is also important for strengthening bilateral relations.

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Pursuant to the MoU, the Interdepartmental Commission on S&T Cooperation is intended to analyze the current state of S&T cooperation between China and Tajikistan; determine the main directions, priorities, and modalities of S&T cooperation; develop and coordinate joint projects and programs of S&T cooperation; pinpoint and address problems in cooperation; promote and coordinate large-scale, meaningful S&T project; create patterns of commercialization and product development conducive to S&T development; foster and encourage cooperation between research institutes, leading scientific laboratories, and centers; assist legal persons engaged in S&T exchanges within the framework of the legislation in force in both countries and the Millennium Development Goals. As the Founder of Peace and National Unity, President of the Republic of Tajikistan, the Leader of the Nation H.E. Emomali Rahmon noted in his speech at the Second Belt and Road Forum for International Cooperation in Beijing on April 26, 2019, the BRI is both timely and needed by the times, as it takes into account the new global realities and reflects and brings together the economic interests of many countries. The BRI is primarily aimed at promoting common development and prosperity for the benefit of all countries and peoples along the Silk Road, based on the principle of sharing the advantages of all parties. The Government of Tajikistan accords high priority to the successful implementation of the BRI and is ready for fruitful cooperation with all interested countries under this initiative. This initiative is also believed to help Tajikistan to implement its National Development Strategy of Tajikistan for the period up to 2030 and to achieve the goals of sustainable development of the country. President of the Republic of Tajikistan, Leader of the Nation H.E. Emomali Rahmon has set three strategic goals for the country: Ensuring national energy independence, achieving national food security, and improving national transportation and communications. China’s contribution supports Tajikistan in accomplishing this set of strategic tasks. China has been providing funds to Tajikistan since 2005 and has been investing in Tajikistan in the form of concessional loans since 2006. Over the years, Chinese investors consistently funded directly different sectors in Tajikistan. The preferential loans are granted through the Export–Import Bank of China. The credit funds for Tajikistan are provided in either U.S. dollars or Chinese yuan, with different conditions for each currency. China’s preferential loans are mainly used for the construction of infrastructure projects, such as the Tajik-Uzbekistani highway reconstruction project (Dushanbe to Chanak), the Dushanbe-Kurma highway rehabilitation project (Phases I and II), the Dushanbe-Dangara region and the Dushanbe-Kurma highway (Tajikistan border). In addition, China is involved in the development and implementation of the “Safe City” traffic management system in Dushanbe, as well as in the construction of the Vakhdat-Yavan section of the Dushanbe-Kurgantyube railway project. Tajikistan expects to attract significant investments from China, primarily for its participation in the BRI. For Tajikistan, the BRI projects promote the rapid development of its domestic infrastructure hardware, and facilitate easier access to new markets, create new sources of income and stimulate potential competitiveness,

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and especially boost the development of small and medium-sized enterprises, thus achieving the goal of sustainable national development. Studies by many scholars suggest that infrastructure improvements in countries along the BRI, especially the facilitation of transport networks and trade in Central, West and South Asia, could boost Tajikistan’s GDP growth by 0.1 to 0.7%. Being an active participant in the BRI construction, Tajikistan benefits from its large cross-regional infrastructure projects, breaks away from its otherwise closed geographical constraints, gains access to trade and transport connections between China and other countries, and turns into a transit country. China provides sufficient financial and economic resources for establishing transport networks connecting East, West, and South Asia, and this creates favorable conditions for Tajikistan for its economic development and cross-border transport infrastructure improvement. The inclusion of Tajikistan in the list of parties to these major projects allows it to secure a railroad connection to China via Uzbekistan, in addition to the transformation of the existing railroad to neighboring Uzbekistan, which will lead the way to Europe. The BRI projects could considerably boost Tajikistan’s economy. China now dominates many large infrastructure projects in Tajikistan, involving mining, energy, metallurgy, chemical industry, and construction. China holds a growing share in the agricultural sector as well. With the purpose of food security in Tajikistan, the Ministry of Agriculture of the Republic of Tajikistan and the Ministry of Agriculture of the People’s Republic of China signed a Memorandum of Understanding on Joint Construction of the China-Tajikistan Agricultural S&T Demonstration Center ( Decree No. 369 of the Government of Tajikistan dated August 26, 2017). Pursuant to this Decree, a demonstration park for agricultural cooperation will be built in Tajikistan with the support of China, with the purpose of drawing interested companies into cooperation, developing innovative models for clusters of agricultural products processing industries, and better promoting agricultural progress. This is why Tajikistan is witnessing a steady increase in the amount of land leased by Chinese farmers. Over the past six years, Chinese farmers have increased the amount of land leased in Tajikistan from 500 hectares to 18,000 hectares. When the local Dekhan farm was left with insufficient resources to effectively use the land it owned, its lease to Chinese agricultural producers saw the introduction of advanced technology and improved crop varieties for rice cultivation and cotton production. The harvest is now bountiful and lucrative. In Soghd, a region in the North of Tajikistan, Chinese experts introduced a drip irrigation system for cotton in local agricultural production, and this boosted the yield of cotton three or four times. It is expected that the two sides will further cooperate in the field of supplying agricultural equipment and seed varieties to Tajikistan, building model agricultural parks, and organizing training for farmers. China is a strategic partner of Tajikistan in its effort to expand foreign trade in agricultural products. The agricultural products exported by Tajikistan to China are mainly fruits, nuts, olive oil seeds, other animal products and cotton fibers. The overall export of agricultural products from Tajikistan has been on a decreasing trend in recent years.

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While there has been an increase in Chinese investments in Tajikistan’s economy, and a steady growth of industrial projects specializing in the production of construction materials, processing of precious metals and processing of agricultural products. In parallel with Chinese investments, Tajikistan has seen a growing number of production enterprises, and accordingly, new employment opportunities are created and domestic production capacity is enhanced. Tajikistan devotes more attention to the strategic priorities of the country, such as expansion of production, creation of jobs, higher share of exports in global trade, etc. As evidenced by the universal experience, attaining such tasks as improving the quality of economic growth, stimulating the dynamics of economic development, resolving complex social problems, reducing the degree and coverage of poverty, raising the standard of living and quality of life, largely depends on the nature of industrial development, as well as the progress and improvement of its industrial, technological, and production structures. As such, the Government of Tajikistan intends to improve and restructure the country’s industry, increase the production of products with higher added value, and create a new model of economic development through industrial modernization, as the main objectives of its industrial policies. That is why there is special attention to the recovery and development of the industrial sector by Tajik governments at all levels. The following tasks are laid down to achieve this goal. – To expand the production and marketing of industrial products that are competitive on domestic and foreign markets. – To improve the investment environment at home, to promote industrial development, to create new institutional bases for sustainable industrial development, and to establish high-tech innovation parks. – To construct a national system for producing import substitutes and exportoriented products on the basis of processing local resources, especially in the agricultural sector (creation of agro-processing complexes for product exports), the construction industry, non-ferrous metals industry, light industry, and the food industry. – To speed up the development of resource-based manufacturing (with a special view to higher added value) – To develop an efficient personnel training system and expand the talent pool competent in new industrial technologies and innovative industrial products. – To create new jobs. – To undertake effective policies for territorial development and industrial locating, with due regard for the sustainable and integrated use of natural resources. It has been proved by world experience that the main industries of industrialization are energy, metallurgy, and mechanical engineering. It is essential to vigorously push forward the state policy on hydroelectric power generation in the light of considerable hydropower potential of Tajikistan. It is declared the primary strategic goal of economic development in Tajikistan to ensure energy security and the efficient use of available electricity.

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Significant and solid results have been attained in the priorities set by the Government of Tajikistan in this regard. And Chinese experts contributed significantly to these objectives. In 2018, the Dushanbe-2 Thermal Power Plant produced 148 million kWh of electricity, accounting for 6.8% of gross output of Tajikistan. The commissioning of the first unit of the Rogun hydroelectric power plant also helped to increase the amount of new electricity, as well as to supply power to new industrial enterprises. The low cost of electricity is a competitive advantage for Tajikistan as it allows the development of energy-intensive industries. In Tajikistan, non-ferrous metals, i.e., aluminum, is the largest energy-intensive industry. A pressing priority here is the earliest possibility of completing the reconstruction of the wholly state-owned Talco mining and processing complex. Noteworthy is the fact that Chinese experts commissioned the completed aluminum fluoride cryolite plant on a “turnkey” basis, contributing significantly to Talco state enterprise growth. The plant produced 3,408 tons of aluminum fluoride and 481 tons of cryolite in 2018, which were 6.6 and 4.3 times more than the output in 2017, respectively. The plant ensured effective import substitution and also increased the volume of exports. The growth in the production of primary aluminum products is not the only one. Attention should be drawn to the fact that on the basis of a single primary aluminum product, a cluster of aluminum products has been developed with the core of the Talco state enterprise, rendering the Tajik Aluminum Company and its subsidiaries competitive in the international market. Also of importance is the expansion of mining and processing of gold, antimony, tungsten, and other rare metals. It is worth mentioning here that Tajik-Chinese joint venture Zeravshan contributes significantly to the growth of gold production in the country. As world practice proves, all countries start their industrialization from the development of light industry (this is true for UK, Germany, USA, Russia, and Japan). The reason is that light industry requires the least investment yet achieves the return on investment in the shortest possible time. In addition, light industry is a labor-intensive industry. It provides jobs for a large number of women, essential for the development of the social sector. Tajikistan ranks second in the world in terms of yarn production per capita. Ceteris paribus, about 10 square meters of fiber is produced from each kilogram of cotton fiber, and this allows to make many textile products, making it a great attraction for the growth of industrial output. With a view for strengthening the sector’s base of raw materials, there is a need to set up enterprises for the production of rayon, synthetic fibers and fabrics, various chemicals and dyes and auxiliaries. In other words, a strong effort is needed for strengthening the chemical industry, because the manufacturing industry in developing countries and economies in transition requires a competitive supply chain. The Tajik-Chinese joint venture Zhongtai (Dangara) New Silk Road Textile Industry Company has built a textile industrial park in Dangara, Khatlon Province, Tajikistan. A highly competitive textile cluster has been established on this basis, turning light industry into one of the most efficient industries in Tajikistan.

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Potential for growth is also present in the food industry. Within the framework of achieving two national strategic development goals, i.e., ensuring food security and access to quality food for the people, the agriculture sector is developing rapidly, providing an important basis for the development of the food industry. The growing number of food industry companies allows for an exponential increase in food production, as well as a significant diversification of food products and brands. On top of the major enterprises of the sector, it is also necessary to have productive food processing enterprises for bread, pastry, macaroni, and confectionery, as well as for wine (with flavors and liquor), beverages (with non-alcoholic products such as fruit juices), fruit and vegetable products (canned food), etc. Such an influx of industrial enterprises implies a sharp increase in the demand for construction materials. The construction materials industry will assume a key role in this respect. First and foremost, the industry should guarantee an adequate supply of raw materials and supply them to the maximum extent necessary for the production of the construction industry. That is why there is an urgent need to accelerate and diversify the production of raw materials. To this effect, besides boosting the production capacity of existing enterprises, it is also necessary to accelerate the exploration, extraction, and processing of new minerals (marble, granite, basalt, quartz sand, etc.). By way of example, low-cost basalt raw materials can be exploited to vigorously develop the stone industry. Clearly, the growth of production enterprises drives the growth of construction materials, as well as other industries (metallurgy, wood processing, mechanical engineering, etc.). In this case, large industrial enterprises (such as cement plants, etc.) are needed in every region across the country, and the huge demand ensures considerable profitability of these plants. In this context, the Tajikistan-China cement joint ventures significantly contribute to the production of cement in Tajikistan. In 2018, Huaxin Gayur Cemen, Huaxin Gayur Sughd Cement, and Chzhungtsai Mohir Cement produced 85% of the total cement production in the country. This also gives rise to the imperative need to develop the chemical industry. Most importantly, China’s Henan Zhongya Holding Group signed an investment agreement with the Tajik government for the modernization of Open Joint-Stock Company “Azot” in Sarband, Khatlon Province, Tajikistan, and the establishment of a new fertilizer production enterprise on the basis. The new company will produce ammonia and urea, effectively increasing the yield of crops. In addition, there will be a series of new production companies, such as those producing sulfuric acid and cryolite, to replace imports and increase exports. Chemical enterprises per se are one of the most crucial links in promoting the development of light industry, food industry, non-ferrous and ferrous metal smelting, construction materials and other industries. And the machinery manufacturing industry is the foundation for building the whole national economic complex. The following areas could be set as the main directions of development, in view of the domestic market demand: agricultural machinery manufacturing, mining, and processing equipment, mechanical engineering equipment, traffic and transport equipment, construction and energy engineering, production of household appliances and other equipment, etc. To date, joint ventures have

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been established for the production of agricultural machinery, special vehicles, and other equipment. The first stage of the project is based on the model of “introduction” and strict “absorption and digestion”, while the second stage focuses on “innovation” and the modernization of existing equipment to make it more applicable to local needs. Chinese companies have a crucial role to play in this regard, as they support manufacturers of machinery and equipment to develop into one of the most significant segments of the national economy. Expansion of mechanized and electrified transport and, above all, of the railroad network, is economically, strategically, and socially important for Tajikistan and, in particular, crucial for achieving the objectives of industrial modernization. With a view to fulfilling such development goals, full use must be made of the opportunities, especially those stipulated in the agreement between the Ministry of Economic Development and Trade of Tajikistan and the Ministry of Commerce of China on strengthening cooperation in infrastructure development. Fulfillment of the above-mentioned economic development goals contributes to the further expansion of trade and investment cooperation between the two sides and enhances its efficiency. The BRI is expected to significantly reduce the cost and time of goods transported to Tajikistan, and thus lower costs for consumers and businesses. The savings from this initiative could be used to raise the living standards of people and the modernization of the economy. Even countries that are not located along the AsiaEurope corridor will have access to high-quality and inexpensive imported products. For instance, transportation routes via Kazakhstan effectively reduce transportation costs for Kyrgyzstan and Tajikistan.

Chapter 55

BRI and Beyond: China and the (Re)emergence of the Eurasian Order: Challenges and Opportunities Jacopo Maria Pepe

55.1 Introduction: Back to the Future? The 70th anniversary of the People’s Republic of China occurs at a crucial turning point in the history of the country and of the world system as a whole: the transatlantic dominated world economic system and the liberal world order are currently undergoing a profound transformation that equals a Copernican revolution. While China’s emergence as a new economic and political pole has doubtless played a crucial part in this development, it is not yet clear who will shape the merging new post-liberal order, as protectionism, nationalism and trade wars plague the economic development of countries and regions with mounting risks for the global stability. In the West and Europe, at least since China’s Silk Road Initiative and, later, with Donald Trump’s election, it is no longer debated whether the coming century will be Chinese or Asian, but just how it will affect Europe and the West. According to this interpretation, China’s rise has led to a global economic and increasingly political power shift, which mark the end of the 500-year dominance of the Western world economic system and the nearly 70-year supremacy of the liberal world order under US leadership, bringing China back to the center of the world system.1 This fact, perceived by the West as an historic turning point, is indeed a return to a norm. However, I argue that this norm is neither the mere re-emergence of China per se nor the return to a Sino-centric world order. Much more, at the heart of the current transformation is the beginning of the resurgence of an “Eurasian” interconnected world system and of an “Eurasian” world

1 Bruno Macaes, The Dawn of Eurasia–On the trail of the New World, Yale University Press, 2018. Peter Frankopan, The New Silk Road–A New History of the World, Bloomsbury Publishing, 2015.

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order, that pre-existed the rise of the Western and European hegemony. This reemerging world, which manifests itself in the current commercial, infrastructural, and industrial reconfiguration of broader Eurasia is in fact similar in its form to the first globalized world system which existed before the rise of Europe in the fifteenth century and where Europe was relatively peripheral.2 This system was, however, neither Sino-centric nor politically united, apart from the short-lived Mongol rule, and not simply linked by loose and sparse overland connections. Rather, it was equally geopolitically fragmented and polycentric, economically networked and infrastructurally branched. Its main actors were both sedentary and nomadic empires as well as private traders. The “empires of the Silk Road”3 were not nation states clearly separated from one another, as in the Westphalian system, but territorially contiguous mega-entities, with flowing borders, overlapping spheres of influence and different ideas of order. Beyond these imperial constructions, private traders moved through a well-developed network of cities and ports. These formed the central nodes for the internal networking of all Eurasian subregions. The osmotic relationship between sedentary empires and Central Asian Kanats was both a guarantor and a threat to the system. However, it was diffuse and sustained economic growth that created a mechanism of supply and demand independent of political conflict. China’s integration in this system, particularly during the Han and the Tang dynasty, served as a facilitator and catalyst, it was however only a necessary but not the sufficient condition for the entire system to work.4 Bruno Macaes has recently claimed that the Silk Road has indeed never been deeply networked and that the small trade volumes traded between Asia and Europe were only transported via intermediate stations. Therefore, the current relation to the Silk Road is more a case of “invention of the past”.5 It is true that no dealer ever went the whole route from Asia to Europe. From today’s point of view, however, it is much more interesting that he did not need it at all. Firstly, while the logistics chain was complex and fragmented and the routes dangerous, reloading at intermediate stations was optimized by a well-established practice that had evolved over the centuries, while a rudimentary but effective freight insurance system provided some guarantees against loss of goods or thieves. On the other hand, it should be emphasized that Europe was by no means the only sales market. Often other regional markets were destined for the goods, or they were the first, rudimentary forms of intra-industrial trade, as in the case of the trade of raw and processed silk between Parths and the Han Dynasty. As a result, along with Chinese, especially Indian, Persian, Southeast Asian, Central Asian, and Arab traders, who came into contact long before Europeans took part in the system. 2 Janet L. Abu-Loghud, Before European Hegemony: The World System A.D. 1250–1350, Oxford University Press, 1991; Barry Gill, Andre Gunder Frank (editors), The World System: Five Hundred Years or Five Thousand? Taylor & Francis Ltd, 1993. 3 Christopher Beckwith, Empires of the Silk Road–A History of Central Eurasia from the Bronze Age to the Present, Princeton University Press, 2009. 4 Abu-Loghud, 1991, pp.316–350. 5 “The World is Eurasian”, Interview with Bruno Macaes, Berlin Policy Journal, March/April 2018, https://berlinpolicyjournal.com/the-world-is-eurasian/.

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In fact, this system connected more than China and Europe, also linking India, Southeast Asia, West Asia, the Middle East, Central Asia, parts of Russia, the Eastern Mediterranean, and Eastern Europe through a network of maritime and continental routes. These were by no means separate, but rather complementary and provided logistical flexibility. Despite geographical obstacles, the maritime coastal areas of the Indian Ocean and continental Asia were therefore more interconnected than this was the case after the 15th Century and the Western colonial times.6 The integrated Eurasian system never led to a political unity, much more to overlapping but distinct ideas of order. The system was more unstable than the national territorial-based Westphalian Order or the legalistic liberal order of the nineteenth and twentieth centuries. But it was not just about war, decay, and destruction. These factors were by no means barriers to trade and exchange. But this also means that China was never the sole hegemon of this system.7 From this historical perspective, the current state of the international affairs leaves open the question of who will shape this “new old world order”, what are its characteristics and which challenges will China and its BRI face in it?

55.2 A New Old World: Three Major Shifts Define the (Re) Emerging Eurasian Order Today, at the beginning of the twenty-first century, all these characteristics seem to remerge in a different, more complex shape as the world political and economic system is currently experiencing three different structural, interrelated shifts. First, a shift from globalization to fragmentation and regionalization of supply and value chains. This shift is fueled by technological changes like the Internet of Things and the Energy transformation and is impacting industrial production, energy generation, logistics, transport, and trade. Second, a shift from liberalization to geo-politicization and weaponization of the economy. This shift means that rising technological, geopolitical, and normative competition is leading to greater stability risks, as power asymmetries and potentially conflicts among emerging economic blocks can deflagrate in major disruptions of global value chains, supply routes, trade and also to more open forms of conflicts, as the US-Chinese trade war testifies. Third, a shift from a trans-Atlantic centred liberal global order to trans- Eurasian/ trans-Pacific system where different understandings of order overlaps but “shared rules” still lack. This shift from the transatlantic-centred to a Eurasian-Asian centred world is a long-term trend which directly impact the nature of the relations between major powers and blocks, specifically the US, China, Europe, and Russia, but also

6

Jacopo Maria Pepe, Beyond Energy–Trade and Transport in a Reconnecting Eurasia, Springer Verlag, 2018, Part1. 7 Ibid.

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their relations to smaller and middle powers like Iran, Turkey, India, Japan and regions like Central Asia and Central Eastern Europe. Greater connectivity, understood as the reterritorialization of the political economy of countries and regions via the reconfiguration of supply and value chains, of production clusters, energy generation and transport, demographic- urban concentration, is acting as the catalyst of all these transformations: shifts in globalization, technology, and geopolitical power balance. Meanwhile, it is greater Eurasia, the space between Central Eastern Europe and East Asia, where, once again, the effects of these transformations and of greater connectivity are becoming more visible. At least since the outbreak of the crisis in 2008, Eurasia has been growing closer together in terms of trade, transport, and security.8 This super continent already generates 29% of World GDP and it will require 1.3 trillion USD yearly in infrastructure investments up to 2030. Besides the two major powers, China and Russia, the dynamically growing markets in Southeast Asia and India, and the arc of crisis stretching from North Africa and the Middle East, including Turkey, Iran, Afghanistan, and Pakistan, are all located in this geographically contiguous space, where maritime and continental trade routes increasingly intersect and instability spills over across regions. The effects of the first trend are already evident in an increasing concentration of middle classes, manufacturing facilities and industrial clusters not only in the hinterland regions of China but also in countries such as Turkey, Iran, and India. In these countries, historically shaped by a maritime geography and a coastal- driven economy, coastal and hinterland regions are slowly but increasingly converging. However, this development is also dramatically changing the functional role and economic orientation of continental countries and regions. As a result, isolated countries such as those of the post-Soviet area have become interlinked transitional spaces in a polycentric system. Central Asia, in particular, is turning from the isolated center of the continent into a networked periphery of the Asian-Pacific region. Besides the open commercial and political confrontation between China and the US, the second and the third geopolitical trends are slowly becoming visible in Eurasia as well, as initiatives such as Russia’s Eurasian Economic Union, India’s “GoWest”, Japan’s Infrastructure Initiative, Kazakhstan’s “Nurly Zhol”, Turkey’s own Silk Road concept and, most prominently, the EU’s new approach to connectivity, complement the Chinese initiative but also more or less explicitly compete with it. However, while these countries and blocks, along with China, will become additional, crucial drivers of Eurasian integration, this will also increase conflicts and tensions for accessing and controlling key juncture spaces such as Central and Eastern Europe, the Middle East, Central Asia, and Southeast Asia. It is no coincidence that these regions are already at the center of political instability or are characterized by a disintegration of regional structures.

8

Kent E. Calder, The New Continentalism-Energy and 21st Century Geopolitics, Yale University Press, 2011; Kent E. Calder, Supercontinent–The Logic of Eurasian Integration, Stanford University Press, 2018.

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55.3 The Domestic Origin of BRI and Its Impact on China’s Stance in Eurasia On this basis, the Silk Road Initiative (BRI) acts primarily as a driver of Chinese economic, regulatory, and foreign policy ambitions. It also acts as a potential catalyst for opening up new markets and for the emergence of sub- regional growth poles in Central Asia, Southwest Asia, Southeast Asia, and Eastern Europe. However, the process of economic connectivity is more likely to be rooted in long-term trends, some of which date back to the years before the BRI initiative. Therefore, the BRI is not simply a blueprint for China’s new global role, but rather a strategic response to structural domestic and continental changes and challenges that extends far beyond China.9 Since 2013, when Chinese President Xi Jinping outlined its objectives, the initiative now known as BRI has quickly become the fulcrum of China’s foreign policy in Eurasia and at the global level and symbol of Beijing’s unprecedented activism on the international scene. After almost six years, the initiative retains its appeal, despite the risks inherent in such a vast project, the internal and external difficulties and the skepticism of many countries involved. The Chinese idea of infrastructural and logistic reconnection of such a geographically, politically, and economically different and distinct space seems to be the only “big vision” apparently able to offer new impetus to the global economy in times of economic-political nationalism, uncertain recovery, and widespread crises. This is not only an ambitious infrastructure project, but in fact a trans-regional strategy of industrial and economic co-development in what has been defined the “collapsing zone” of continental Eurasia10 : the region concerned extends from the continental borders of China to the developing economies of the AfroAsian belt. To date, this macro-area represents (together with some internal regions of Africa) the last large “disconnected” space of the global economy; at the same time, however, it is territorially contiguous to the major economic and demographic growth poles of coastal Asia. The initiative is declaredly non-hegemonic and open to all interested countries. So far, Beijing has committed about $900 billion to the BIR, split between national institutions such as the Silk Road Fund and the China Export–Import Bank, new regional multilateral institutions such as the Asian Infrastructure Investment Bank (AIIB) and credit lines of Chinese banks. However, the BRI and its institutions linked to it do not represent a new Marshall Plan, nor a coherent plan for China to gradually assume the tasks of guarantor of a liberal world economic order. Conversely, it is included in the vast plan of “national rejuvenation” that President Xi placed at the center of his speech at the 19th Party Congress in 2017.11 In fact, the logic of the BRI 9

Pepe, 2018. Wu Wehnua (National Development and Reform Commission, Transport Institute), On the Predicament ofthe Integration of Eurasian Transportation and its Breaking-through, Presentation at the First EurasianTransport Conference, Astana, 12–14.11.2014. 11 Full text of Xi Jinping’s report at 19th CPC National Congress, Xinhua, 03.11.2017, http://www. xinhuanet.com/english/special/2017-11/03/c_136725942.htm. 10

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appears complex and moves on multiple levels: it must essentially be defined as a proactive response of the Chinese leadership to three major structural, long and short term changes, both internal and external, which impact the country at this stage of the country’s development: domestic/macro-economic, geo- economic/geopolitical continental, and systemic/global. The three changes are linked and reinforce each other. In domestic and macroeconomic terms, key factors are often mentioned when considering the BRI: China, thanks to the economic stimulus measures approved after the Lehman Brothers collapse in 2008, has generated overcapacity in heavy industrial sectors, especially for steel and cement; consequently, the banks have accumulated enormous liquidity, while domestically internal consumption has grown in importance to become determinant for the further growth of the national economy. Therefore, the initiative would be a functional tool to channel production overcapacity towards foreign markets and excess liquidity in a large infrastructure project. However, if this explanation helps to understand the contingent logic of the BRI, it does not explain its structural origins. In geo-economic terms, they are to be found in the impulse given since the beginning of the 2000s to a gradual but sustained transformation in the productive system of the country. Under the Central and Western Development Strategy, new impetus was given to the development of the central and internal regions to reduce the regional development gap and to combat the risks of destabilization in the eastern border region of Xinjiang. This transformation effort has created poles of growth and production in central and central-western regions, in cities such as Chengdu, Chongqing and more recently Urumqi and Kashgar, and has been accompanied by the massive development of the road and rail network necessary to connect these centers with the coasts and with the rest of the country. Finally, widening the horizon to the level of the entire Euro-Asian space, the change in the country’s economic geography has also produced profound geopolitical consequences at continental level. Beijing is today able to plan the creation not only of continental transport routes but of a series of multimodal land-sea corridors alternative to the maritime routes, which so far remain under the strict control of the American navy. Europe and other emerging markets thus become reachable for new routes that partially or totally replace the old ones. Furthermore, the range of its economic and political partners has widened: Beijing secures in this way not only a diversification of energy supplies but above all access to future markets located along the southern belt of Eurasia, from South-East Asia and India to Turkey, Iran and the Middle East, up to the Horn of Africa and to North Africa. This gives China more flexibility by minimizing dependence on single countries and routes but also increases China’s responsibility to act as a stabilizing but non hegemonic force in this complex web.

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55.4 China and the BRI in the Emerging Eurasian Order: Managing Challenges In fact, the transformations triggered by the BRI within the Asian continent, and the new geopolitical opportunities opened up for Beijing have produced systemic effects well beyond Asia and Eurasia: due to the very size of the space involved and to the economic, demographic, and geographical weight of China, the initiative is in fact the first organic step towards a post-Western global order. For now, however, China itself seems not yet ready to assume a leading role in a post-Western global order and will most probably try to navigate between the present institutions and new forms of mixed global governance. In fact, each of the three BRI dimensions presents risks for Beijing, which increase proportionally as the BRI project grows and takes shape. Internally, a further slowdown in growth, a crisis in the banking system or a collapse in land prices are all sources of risk. Such a scenario would have direct repercussions on the BRI. Externally, China is dependent on relations with a vast network of countries and areas that have, in different forms and levels, reasons to fear or look at the Chinese initiative with suspicion: among these is Europe, and naturally also the United States as an interested external observer. While the US is currently the biggest single challenge for both the BRI and China as the current administration has clearly targeted the BRI and the BRI-related projects as part of the trade war it has embrace, Europe, the most important trade partner for China across Eurasia, is also increasingly growing defensive about the BRI, reactive and self-confident in its response.12 Debt trap risks, perceived lack of sustainability in many Chinese founded projects in economically weaker countries, the increasingly technological competition Europe feels exposed to in many key industrial sectors and in emerging countries are leading the EU to develop a more strategic approach to China’s Eurasia pivot, to developing similar instruments to leverage its market power and to diversify its relations with Asia by forging new connectivity partnerships with countries like Japan.13 Furthermore (and a consequence of the afore-mentioned trends and changes), the reconnection of Eurasia is a process that precedes and transcends Chinese plans. It finds its origin in the transformations that over the last fifteen years have seen the multiplication of commercial ties within Asia and the emergence of new and autonomous centers of economic power. The main actors of Eurasia, from Russia to the Turkish and Iranian middle powers, from the small Central Asian states to India, up to insular Japan, are repositioning and equipping to face the perceived 12

See for example the latest EU-China strategy paper: European Union Commission, Eu-Chian strategic outlook, March 2019, https://ec.europa.eu/commission/sites/beta-political/files/commun ication-eu-china-a-strategic-outlook.pdf. 13 European External Action Service, The Partnership on Sustainable Connectivity and Quality Infrastructure between the European Union and Japan, September 2019,https://eeas.europa.eu/ regions/africa/68018/partnership-sustainable-connectivity-and-quality-infrastructure-between-eur opean-union-and_en.

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challenge represented by Beijing’s continental and global outreach. These countries do not deny the validity of the concept of a continent-wide reconnection, including both maritime and continental Eurasia, but they conceive it through their own values, norms, standards, strategies, countermeasures, and new axes, such as that between Japan and India or that within Southeast Asia (ASEAN countries), or, more recently, that between the EU and Japan. Indeed, the success of the BRI will not only depend on Beijing’s ability to carefully navigate the complex web of relations it has created, but also on the successful definition of new “rules of the games” among all players in this emerging, distinct, Euro-Asian order. While Western liberal institutions are clearly insufficient to offer a framework to shape the ongoing change, China is still building an alternative framework, politics and set of rules accepted by all players. In this framework, the BRI (and the institutions created as its corollary) capture the diffused, interconnected, fluid, noninstitutionalized, competitive, and cooperative nature of the new global “Eurasian” system. It correctly identifies instruments and necessary action: trade, economic development, and connectivity among areas until now on the margins of the global economic system. In this way, the BRI places China at the center of new regional and global governance paradigm, with its interests, its strength, and its clear national priorities. An even more complex concept than a system, accepted and shared by all the actors involved is still a work in progress. Considering Eurasian history, Beijing should carefully balance between own legitimate interests, aspirations and concept of order and the need for their hybridization with other concepts, norms, and standards across Eurasia, starting with (but not limited to) the European rule-based, multilateral model. Only this will guarantee a truly “shared future for all mankind” and this is also the biggest challenge for Beijing in the years to come.

Suggested Reading 1. Kadri A. (2019), Imperialism with Reference to Syria, Springer. 2. ILO (various issues), Key Indicators of the Labour Market (KILM). http://www.ilo.org/emp elm/what/WCMS_114240/lang--en/index.htm 3. Guerriero, M. (2012), “The Labour Share of Income around the World: Evidence from a Panel Dataset”, IDPM Development Economics and Public Policy Working Paper Series, no. 32. 4. Robinson J (1962), Essays in the Theory of Economic Growth, Palgrave Macmillan. 5. Piketty T (2013), Capital in the Twenty-First Century, Seuil Publishers. 6. United Nations (various years), Survey of Economic and Social Developments in Western Asia ( Beirut : ESCWA ). 7. Frank A G (1972), Lumpen- Bourgeoisie and Lumpen-Development: Dependency, Class and Politics in Latin America Monthly Review Press. 8. China’s Arab Policy Paper, Ministry of Foreign Affairs, the People’s Republic of China, January 2016, http://www.fmprc.gov.cn/mfa_eng/wjdt_665385/2649_665393/t1331683.shtml (viewed February 5. 2016). 9. Cheng E. and Ding X, (2017), “A theory of China’s ‘Miracle’—Eight Principles of Contemporary Chinese Political Economy”, Monthly Review, 68(08).

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10. Freeman C. (2018), The United States and China: Game of Superpowers. Remarks to the National War College Student Body, Watson Institute for International and Public Affairs, Brown University, Fort Lesley J. McNair, D. C. https://chasfreeman.net/the-united-states-andchina-game-of-superpowers/. 11. Kadri, A. (2017), The Cordon Sanitaire: A Single Law Governing Development in East Asia and the Arab World, Berlin: Springer.

Chapter 56

Making the Most of China’s Belt and Road Initiative (BRI) in Africa Emmanuel Nnadozie

56.1 Introduction Since the 1990s, Africa-China relationships have developed greatly. Although the historical connections between China and Africa date back through several centuries of economic interactions, modern Africa-China relations began with the establishment of diplomatic relations with Egypt in 1956. Since then, 48 African countries have established close ties with China. To further strengthen the friendly cooperation between China and Africa, the Forum on China– Africa Cooperation (FOCAC) was created in 2000 as a platform for collective consultation and dialogue and a cooperation mechanism. More recently, the Belt and Road Initiative (BRI) launched in 2013 has created greater opportunities for win–win cooperation between China and Africa by allowing Africa and China to pursue common development agenda. The BRI is China’s allround cooperative program aimed at connecting Asia, Europe, Africa, and the Middle East with vast logistics and transport networks including pipelines, airports, railways, roads, transnational electricity grids, and fiber optic cables (Foreign Languages Press, 2017). From an African perspective the BRI focuses on cooperation designed to address significant bottlenecks in strategic areas such as connectivity of infrastructure, including maritime; enhancement of economic, financial, investment and trade; ecological and environmental protection; productive capacity enhancement; and promotion of tourism, cultural, social, and educational exchanges. Hence, the BRI is expected to provide significant development opportunities leading to greater trade and investment through better connectivity, diversification, and job creation for socio-economic transformation in Africa. Drawing from an ACBF 2019 study on how Africa can benefit from the BRI, this paper examines how E. Nnadozie (B) Executive Secretary, African Capacity Building Foundation, Harare, Zimbabwe e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_56

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to make the most of China’s BRI in Africa and explores the possible implications of the BRI for Africa, the potential benefits for the continent and the expectations of Africans from the Initiative.

56.2 Brief Overview of BRI The main focus of the BRI is to increase connectivity between China and other countries through infrastructure and other related investments, policy coordination, unimpeded trade, and financial integration, and to strengthen people-to-people interaction. The BRI was proposed by President Xi Jinping of China during his visit to Central Asia and Southeast Asia in September and October of 2013. The idea put forward was to have a master plan for jointly developing the Silk Road Economic Belt and the twenty-first century Maritime Silk Road which immediately attracted attention from all over the world. The Initiative is designed to consider current international and regional development trends and to assist countries in similar situations to co-develop and collaborate in economic development underpinned by the global free trade system. BRI investment projects and programs are estimated to add over USD 1 trillion of outward funding for foreign infrastructure over the 10-year period from 2017. While new vehicles have been formed to help with financing, such as the Silk Road Fund, most of the Chinese funding for these projects will actually come from statedirected development and commercial banks. China is also supporting a multilateral approach to investment including multilateral development banks and public private partnerships (OECD, 2018). All levels of the Chinese government, from the national economic planning agency to provincial universities, are scrambling to get involved in BRI. Nearly every province in China has developed its own BRI plan to complement the national blueprint. Major state-owned policy and commercial banks have announced generous funding plans to fulfil President Xi’s ambitious vision.

56.3 Implications of the BRI for Africa The potential impacts of BRI could be decomposed into four key channels, which are trade, investment, infrastructure financing, and aid/economic assistance. Table 56.1 provides an illustrative framework that summarizes the potential impacts of BRI on the aforementioned four key channels in the short- term and the long-term.

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Table 56.1 Potential Impacts Analysis Framework of the BRI for Africa Potential impacts Channel

Short term

Long term

Trade

+ Positive

− Negative (+) Welfare of consumers enhanced through access to relatively cheap Chinese products and export of raw materials to China (−) Increasing trade deficit, lack of diversification of products exported by African countries, and loss of employment

Investment

+ Positive/ − Negative + Positive (+) Investment from − Negative Chinese firms accrue potential positive impacts if channeled in appropriate/targeted areas (−) Investment can lead to deteriorating environmental conditions if safeguards are not in place to monitor/ mitigate risks

Infrastructure financing

+ Positive − Negative

+ Positive (+) Infrastructure projects − Negative financed by Chinese loans play a major role in stimulating economic growth of African countries – hence the positive impact (−) Issues of debt unsustainability, continued reliance on Chinese workers and equipment, not only to build infrastructure but also its maintenance, including relatively low ecological/environmental standards

Economic assistance (aid)

+ Positive

+ Positive

Source ACBF 2019 (forthcoming)

Explanatory notes

(+) Aid in various forms can improve social and humanitarian services, health and education outcomes

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Trade and Industry The BRI offers several opportunities for Africa, particularly in the area of trade with respect to infrastructure connectivity. Obsolete transport networks are being resuscitated, with new ones also opening. But the extent to which Africa’s exports can enhance and sustain economic growth is constrained by several challenges. Africa’s exports are concentrated on primary commodities which are subject to volatility in price and volume. Sustaining the lack of diversity of Africa’s export trade is the lack of significant local processing of the continent’s primary commodities, such as oil, minerals, and agricultural commodities. Hence, the current trade structure comes with short-term potential positive impacts as the welfare of African consumers is enhanced through easy access to relatively cheap Chinese products and export of raw materials to China. Africa has the potential to capture part of the 100 million labor-intensive manufacturing jobs that will leave China by 2030 (Sun, 2017). Furthermore, Africa’s industrial sector is weak in terms of both number of firms, and their average size characterized by limited technological capabilities, poor infrastructure, low human capital, small size of domestic markets, and low entrepreneurial base (UNCTAD, 2013). The BRI creates a huge opportunity for the continent, not only for countries such as Egypt, Nigeria and South Africa (all regional outperformers in the Global Manufacturing Competitiveness Index), but also for newer players such as Ethiopia, Morocco, Rwanda, and others (all of whom have recently adopted policies enabling manufacturing and industrial development). However, productivity in the manufacturing sector is still comparatively low in Africa with manufacturing output per person currently about a third of the average for all developing countries. Africa’s manufacturing exports per person is about 10 percent of the global average for low-income countries (ACBF, 2019).

Investment In the case of investment made in Africa by private Chinese firms, a “win–win” situation is more likely in the sense that both the African countries which host the investment, and the Chinese firms benefit. McKinsey & Company (2017) provided an analysis of trends in investments in Africa, based on a survey, through face-toface interviews with 1073 Chinese firms across 8 African countries (Angola, Côte d’Ivoire, Ethiopia, Kenya, Nigeria, South Africa, Tanzania, and Zambia). The survey results show that most investments by Chinese firms reflect long-term commitments to Africa in the sense that they are neither debt-creating nor easy to unwind in a hurry. More specifically, as much as 63 percent of the investments made by the firms surveyed in Africa require long-term commitment. The results also suggest that investments in Africa by Chinese firms tend to be associated with job creation, development of skills, transfer of technology and knowledge, and are thus more likely to promote economic development in the countries in which they are located. The

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extent to which the BRI can encourage and support this form of non-debt creating and long-term productive investment would constitute an important yardstick for measuring its usefulness for African countries.

Infrastructure Financing Infrastructure financing is the channel through which much of the financial flows between China and Africa occur. The infrastructure projects financed by Chinese loans play a pivotal role in helping grow relevant African economies. Specifically, the potential positive impacts are expected based on several considerations. First, China has been a ready source of infrastructure financing for many African countries due to lack of alternative sources. Second, China’s financing fills a void left by the traditional development finance institutions. Third, given the long gestation period of infrastructure projects, Chinese investors have taken the risk and have provided a quick solution and choice that is appreciated by various African countries. This notwithstanding, greater attention needs to be paid to the potentially high levels of indebtedness.

Economic Assistance Economic assistance or aid has been given to various African countries since the early 1960s. This has typically taken various forms such as social and humanitarian services including support to health and education. In September 2018, China granted debt relief to specific categories of African countries focusing on least developed countries, heavily indebted countries, landlocked and small island developing countries that were unable to pay off debts, which accumulated from mostly infrastructure projects that were financed by China (ACBF, 2019).

56.4 Potential Benefits of the BRI The BRI transport corridors have the potential to improve infrastructure and trade, foreign direct investment (FDI) and standards of living. To maximize the benefits, the BRI countries should adopt complementary policy reforms that increase transparency and reduce corruption, improve debt sustainability, promote regional and global trade, and mitigate environmental and social risks (World Bank, 2019).

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Infrastructure and Improved Trade BRI-induced improvement in transport will help in two crucial ways: lowering travel times and increasing trade and investment. The World Bank (2019) estimates that travel times will decline by up to 12 percent once the infrastructure projects are completed. Travel times with the rest of the world are estimated to fall by an average of 3 percent, showing that non-BRI countries and regions will benefit as well. Trade is projected to grow from 2.8 and 9.7 percent for BRI corridor countries and between 1.7 and 6.2 percent for the world. Countries with a comparative advantage in timesensitive inputs such as electronics will be among the biggest winners. Opportunities of the BRI within Africa can be seen in the transport and other infrastructure connectivity built by the Chinese. Infrastructure projects connecting Kenya and Djibouti, Rwanda, Uganda and South Sudan, and Sudan and Ethiopia, among others, are illustrative of the support provided by China to connect the various African countries.

Increased Foreign Direct Investment Low-income countries are expected to realize a 7.6 percent increase in FDI due to new transport links. Aggregate FDI in BRI partner-countries is expected to increase by around 5%, with regions such as Sub-Saharan Africa and East Asia and Pacific seeing greater potential gains. The increase in FDI can in turn have positive effect on GDP, trade, and employment growth, especially for lower- income countries (Chen and Lin, 2018).

Enhanced Living Standards BRI transport could help lift 7.6 million people out of extreme poverty and 32 million people out of moderate poverty. Real income growth could increase by as much as 3.4 percent although the real income growth is expected to vary across countries as some countries are projected to suffer welfare losses stemming from the large costs of infrastructure (World Bank, 2019).

56.5 Africa’s Expectations from the BRI African countries expect that projects and programs funded under the BRI will support African continental priorities and strengthen productive capacities to support regional and global trade initiatives such as the AfCFTA. They also expect support in the development of critical technical skills to facilitate enterprise and significant

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job creation to take advantage of Africa’s youthful population through backward and forward linkages in the goods and services supply chain.

Supporting African Continental Priorities Boosting trade and investment in support of the African Continental Free Trade Agreement (AfCFTA). The successful launch of the AfCFTA in 2019 remains a historical achievement in an attempt to remove barriers to intra-continental trade and investment, thus accelerating industrialization, and facilitating economic diversification and inclusion. The BRI should add value to this unprecedented initiative across the continent by further creating trade and investment opportunities for African enterprises. Securing large-scale employment opportunities for the youth and for realizing the demographic dividend. Estimates show that if the current situation remains unchanged approximately 100 million of the 450 million Africans expected to reach working age over the next two decades can hope to find decent work (Brookings Institution, 2019). In addition, given the growing population of educated youth, the BRI implementation in Africa should be a source of significant creation of jobs for the youth.

56.6 Addressing the Capacities Issues in Africa Strengthening Human and Institutional Capacities to Support Africa’s Development Priorities Capacity constraints remain a major challenge to implementing African continental priorities and will lead to sub-optimal outcome of China-Africa relations if not adequately addressed. The international competitiveness agenda requires African countries to develop manufacturing capacity in low- wage, labor-intensive industry and thus position themselves to gain from China’s current export market shares as wages in China inevitably rise. More specifically, expanding Africa’s supply response capacity requires structured partnerships between African and Chinese firms to facilitate technology transfer, add value to African exports, and integrate African producers into the Chinese production value-chain leading to increased local sourcing of parts, equipment, labor, and management by Chinese firms operating in Africa. Africa is also seriously short of the critical technical skills and professionals to help achieve the key initiatives of the First 10-Year Implementation Plan of Agenda 2063. It is therefore expected that the implementation of the BRI will be underpinned by a

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capacity development component to build a cadre of technical skills to ensure the sustainability of the various projects and programs.

Enhancing Industrial Production Capacity to Facilitate Integration in China’s International Value Chains As part of the BRI, the formation of the China-Africa Industrial Capacity Cooperation Fund was announced at the 2015 FOCAC meeting in South Africa. This is funded with a start-up capital of US$ 10 billion with a primary focus on financing manufacturing industry. Prior to this, China had financed a series of industrial parks in several African countries, including Ethiopia, Mauritius, Nigeria, and Zambia. This notwithstanding, Pigato and Tang (2015, p. 8) found that “African firms do not appear to be positioning themselves within Chinese value chains. Consequently, there is very little evidence that China is using Africa as a platform for its global exports or integrating African firms into its international value chains”. These are the key issues, which the African countries and their Chinese partners need to address if they are to optimize benefits from the BRI.

Strengthening Ecological and Environmental Protection Africa faces significant challenges such as deforestation, soil erosion, desertification, wetland degradation, and insect infestation. Other problems include biodiversity loss, natural resource depletion, and ecological challenges (Mabogunje, 1995) which are likely to be exacerbated by climate change. Against the background of these pre-existing challenges there are growing concerns about the social, ecological, and environmental impacts of large infrastructure projects financed by China in Africa (Chen, 2018). Serious attention should therefore be given to project-induced ecological and environmental challenges to mitigate the potential negative consequences including the use of high-quality materials and equipment that is carbon and environmentally friendly.

56.7 Conclusion The BRI provides a strategic fit within global and regional frameworks, including Agenda 2063 and its AfCFTA, the UN 2030 Agenda for Sustainable Development, and many national development frameworks. BRI encourages the involvement of governments, international and regional organizations, the private sector, civil society, and citizens in promoting international cooperation in connectivity to

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facilitate development. However, while the BRI offers significant potential benefits to African countries in terms of improved trade, investment, infrastructure financing and development assistance, it is important to consider the long-term impacts by ensuring that capacities are built during the implementation of the BRI projects and programs. It is the expectation of African countries that special attention should therefore be given to Africa’s continental priorities such as AfCFTA and youth employment and the role of capacity development in the achievement of development priorities. Building or strengthening human and institutional capacities including the development of critical technical skills to enhance Africa’s industrial production capacity will facilitate the integration of African firms in China’s international value chains. BRI should address these expectations to achieve sustainable development and to translate potential benefits into real gains for the African countries.

Suggested Reading ACBF. 2019. How Africa Can Benefit from the Belt and Road Initiative (Forthcoming). The African Capacity Building Foundation: Harare. Brookings Institution. 2019. Foresight Africa: Top Priorities for the Continent in 2019. Africa Growth Initiative, Brookings Institution. Chen, Y. 2018. “Crossing Rivers, Feeling Stones: The Rise of Chinese Infrastructure Finance in Africa”. Bridges Africa, Vol. 7, issue 5. Chen, M. X. and Lin, C. 2018. Foreign Investment across the Belt and Road: Patterns, Determinants, and Effects. Policy Research Working Paper No. 8607. World Bank, Washington, DC. Foreign Languages Press. 2017. Building the Belt and Road: Concept, Practice and China’s Contribution. Office of the Leading Group for the Belt and Road Initiative. Mabogunje A. 1995. The Environmental Challenges in Sub-Saharan Africa. McKinsey & Company. 2017. Dance of the Lions and Dragon: How Africa and China Engaging, and How will the Partnership Evolve? OECD. 2018. China’s Belt and Road Initiative in the global trade, investment and finance landscape. OECD Business and Finance Outlook. Pigato, M. and Tang, W. 2015. “China and Africa: Expanding Economic Ties in an Evolving Global Context”. Investment in Africa Forum, Addis Ababa. Sun, I. Y. 2017. “The World’s Next Great Manufacturing Center”, Harvard Business Review, MayJune Issue, 2017, pp.122–129. UNCTAD (United Nations Conference on Trade and Development). 2013. “The State of Industrial Development in Africa”. Policy Brief No 27, UNCTAD, Geneva. World Bank. 2019. “Belt and Road Economics: Opportunities and Risks of Transport Corridors”. Advance Edition. World Bank, Washington, DC. License: Creative Commons Attribution CC BY 3.0 IGO.

Chapter 57

Belt and Road Initiative, International Cooperation, and Implications for Less Developed Regions Carola Beatriz Ramon

57.1 The New Role of China in the World: From Backward Economy to Global Player Over the last 70 years, China has transformed itself at a speed and magnitude that no other country in history has achieved. In 1949, China was a closed, underdeveloped and mostly agrarian economy, with an agricultural sector employing almost 80% of the population. In the space of seven decades China became the second largest economy in the world, not only in terms of its total GDP but also due to its share of world trade. Although there are still regional economic disparities, China has lifted over 800 million people out of poverty and increased its urban population from less than 20% to almost 60%.

C. B. Ramon (B) Counsellor Member & Deputy Coordinator, China Working Group, Argentine Council of Foreign Relations, Buenos Aires, Argentina e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_57

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This accelerated economic development has significantly impacted the rest of the world as the growing Chinese demand has been the great driver of global trade. This, in turn, has resulted in greater interdependence between China and the rest of the world. Further, the Chinese economy will continue its process of development and sophistication in the coming decades.1 Since Deng Xiaoping, Chinese international politics have followed the 24character concept of “Observe calmly, secure our position, cope with affairs calmly, hide our capacities and bide our time, be good at maintaining a low profile, and never claim leadership”. However, it seems as if keeping a low profile is no longer possible for China. China’s accelerated growth has shaped a new role in the world. In addition, the current withdrawal of countries such as the United States from multilateral forums, has propelled China into being more involved and assertive in world affairs. Over the last decade, there has been a turning point in China’s participation in international affairs. The Olympic Games of 2008 showed China as a world centrestage country. The Hangzhou G20 summit in 2016 embodied this new China, more assertive and involved in the international community. China has adopted a dual approach. On the one hand it has not broken with traditional Western institutions. In fact, China actively and proactively participates in them, such as the WTO, the United Nations, and the Paris Agreement, becoming the main advocate of globalization and sustainable development. On the other hand, China is, with its developing country credentials, proposing an alternative and complementary world order, with new institutions and strategies, under the framework of the Belt and Road Initiative (BRI), which characterize a type of globalization led from the south: a globalisation with Chinese characteristics.2

57.2 Belt and Road Initiative: From Domestic Development to International Cooperation The BRI is undoubtedly the most ambitious global project of modern times and has the potential to reformulate the traditional multilateral mechanisms of international cooperation. As Minister of Foreign Affairs of the People’s Republic of China Wang 1

The “Chinese dream” often mentioned by Xi Jinping translates into three dates which have become China’s main domestic policy objectives—the two centenaries and the “Made in China 2025”. These are the anniversaries of the creation of the Chinese Communist Party in 2021 and the centenary of the creation of the People’s Republic of China in 2049. For the first, China aims to build a moderately prosperous society and to achieve the eradication of extreme poverty. For 2049, the goal is to become a modern socialist country—developed, strong and harmonious. In addition, the Chinese State Council in 2015 approved the “Made in China 2025” program. This program is aimed at transforming China’s economy into a high-tech centre by significantly increasing domestic production in ten key sectors, from robotics to biopharmaceuticals, which are expected to accelerate industrial intensification. 2 Ramon-Berjano, Carola (2018), “G20: Multilateralism After China”, Australian Institute of International Affairs, http://www.internationalaffairs.org.au/australianoutlook/g20-multilateralism-acafter-china/.

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Yi mentioned, its importance is that it is based on the spirit of the ancient Silk Road with a history of more than two thousand years but reformulated in this century and for this new century. The principles guiding the initiative are therefore based on what represented the ancient Silk Road (peace, cooperation, openness, inclusion, mutual knowledge, and mutual benefit), but aimed at tackling the current problems of international economic development and cooperation. The first time President Xi Jinping mentioned the BRI was at Nazarbayeb University in Astana, Kazakhstan in September 2013 during his speech “Promoting Friendship among Peoples to create a better future”. On that occasion he referred to the creation of a new Silk Road, or economic belt, with the primary objective of strengthening ties between China and the countries of Central Asia by linking China with Europe via Eurasia. In October that same year, during a speech before the Indonesian Parliament, President Xi proposed the creation of a twenty-first century maritime corridor to promote cooperation and strengthen ties between the ASEAN community and China. Also, on that occasion, he proposed the creation of the Asian Infrastructure and Investment Bank (AIIB) to finance infrastructure and interconnectivity projects in the region. The importance of this initiative, particularly the need for investment in regional infrastructure, was mentioned again by President Xi a month later during the third plenary session of the 18th Central Committee of the Chinese Communist Party. Two years later, the document “Vision and Actions on Jointly Building Silk Road Economic Belt and 21st-Century Maritime Silk Road”, published in March 2015 by the National Reform and Development Commission,3 detailed the conceptual framework, the key areas for cooperation and mechanisms of cooperation within the BRI. Although the speeches of September and October 2013 referred to only one land corridor and a maritime one, the 2015 already details a total of six land corridors and a maritime road. Several aspects can be analysed regarding the BRI. On the one hand, it contributes to the domestic economic development, particularly the western regions in China. In the eighties, Chinese reform and opening prioritised the eastern areas, with the creation of SEZs in the coastal areas. The three major economic centres of China – the Pearl River Delta in Guangdong Province, the Yangtze River Delta around Shanghai, and the Bohai Basin in the Beijing and Tianjin area – belong to this region. The “laddered-step” development later moved to the west, to cities such as Chongqing and Chengdu within the “Go West” strategy.4 The BRI prioritises connectivity and development with the western regions; for instance, three out of the six corridors of the BRI cross Xinjiang, China’s westernmost and largest region.5 3

“Vision and Actions on Jointly Building Silk Road Economic Belt and 21st-Century Maritime Silk Road”, March 2015, National Commission for Reform and Development, Ministry of Foreign Affairs and Ministry of Commerce, http://en.ndrc.gov.cn/newsrelease/201503/t20150330_669367. html. 4 Ramon-Berjano, (2016), “La iniciativa “Un cinturón, un camino” y el desarrollo del oeste de China: Impactos domésticos e internacionales, CARI, Documento de Trabajo Nº 98, P:43–66 http://www. cari.org.ar/pdf/dt98.pdf. 5 Ramon-Berjano, C. (2017), “La Iniciativa de la ruta de la seda: infraestructura, inversiones y oportunidades para nuestra región", Temas, November 2016, Año IX No 9.

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On the other hand, the BRI is the further opening of the Chinese economy, not through the coastal SEZs as in the eighties, but through the west of the country. A “going out” as in the eighties, but through routes and railways in the Eurasian continent, reminiscent of the theory of the pivotal area or world island postulated by the English geographer Halford MacKinder back in 1904.6 Finally, there is another aspect of the BRI, since it contributes to propelling China as a leading global actor. More than a specific project, it is a framework that facilitates inclusive cooperation based on connectivity and infrastructure which, in turn, has the potential to reformulate international economic relations, particularly for the developing world and emerging countries. Development cooperation is taking a new form under the framework of the BRI, since it is present in several agendas, not only at the national level of emerging countries, but also at the regional and international levels. The truly global dimension of the BRI became evident in the First Forum that took place in Beijing in May 2017 which was attended by more than 55 countries. Days before that Forum, Foreign Minister Wang Yi referred to the initiative as “the most important public good that China has given to the world: proposed by China, but for all countries to benefit”.7 Since then, the BRI has taken a leading role and various initiatives and forums have been aligned with it as a framework under which development cooperation can take place. These include the United Nations Sustainable Development Goals, SouthSouth cooperation, the G20, as well as multilateral and regional funding. During the 2017 Summit, Antonio Guterres, Secretary General of the United Nations, referred to China as a “pillar of multilateralism” and compared the BRI with the objectives of sustainable development, highlighting their shared vision of global development. “While the BRI and the 2030 Agenda are different in nature and scope, both have as their primary objective sustainable development. Both strive to create opportunities, global public goods, and win–win cooperation. Both also want to deepen the ‘connectivity’ between countries and regions: connectivity in infrastructure, trade, finance, politics and perhaps more importantly, between people. For the countries participating in the Initiative to benefit from the full potential of this connectivity, it is crucial to strengthen the links between the initiative and the objectives of sustainable development. These 17 objectives can guide the policies and actions under the Initiative towards true sustainable development”.8 A good example of these shared objectives between SDGs and Belt and Road is the project “Jointly Building Belt and Road towards SDGs”, which aims to strengthen policy makers’ capabilities in BRI

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Mackinder, J. H. (1904), “The Geographical Pivot of History”, Geographical Journal, Vol. 23, No. 4 (April 1904). 7 “China to gather friends for biggest summit of year on New Silk Road”, April 18, 2017, Reuters, https://ca.reuters.com/article/topNews/idCAKBN17K0FL-OCATP. 8 Guterres, A. (2017), “Remarks at the Opening of the Belt and Road Forum”, May 14 2017, https://www.un.org/sg/en/content/sg/speeches/2017-05-14/secretary-general%E2%80%99sbelt-and-road-forum-remarks.

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member countries to assess the potential and formulate policies for BRI to achieve the SDGs.9 In 2016, China held the presidency of the G20 under the theme “Towards an innovative, invigorated, interconnected and inclusive global economy”. The final declaration, known as the “Hangzhou Agreement”, called for the G20 to move from being a crisis response forum to being an instrument for providing a new path towards economic development for the rest of the world, based on scientific and technological innovation and a more open, less protectionist world economy, by reinforcing the multilateral trading system.10 Regarding financing, new institutions have been incorporated, two of which are intimately linked to the BRI: the AIIB and the Silk Road Fund. The AIIB. created in 2015, currently has over 70 members and several prospective ones (there were initially 57 founding members) with an initial capital of US$100 billion, of which 40% is Chinese. The Silk Road Fund, founded in 2014, financed entirely by the Chinese government, with an initial capital of US$40 billion. The AIIB has several MoU with other banks, such as the African Development Bank and Inter-American Development Bank. In fact, according to the Financial Times, 18 of the 25 projects funded by the AIIB have been co- financed with the World Bank, the Asian Development Bank, the European Bank for Reconstruction and Development, the European Investment Bank, and the Islamic Development Bank. The rest have been entirely financed by the AIIB. This shows a “metamorphosis” of the AIIB from being merely an Asian bank to being a global entity.11

57.3 The Role of China in International Development Aid Alongside a new economic role of China and deeper involvement in world issues, we are witnessing a changing global development cooperation architecture. China has made more commitments in South-South cooperation at the UN Sustainable Development Summit in 2015, pledged billions to African countries at the Forum on China-Africa Cooperation, published two White Papers on Development Aid,

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This project has been launched for several BRI countries (Azerbaijan, Bangladesh, Cambodia, Czech Republic, Georgia, Kazakhstan, Kyrgyzstan, Lao, Mongolia, Myanmar, Romania, Serbia, Sri Lanka and Thailand), https://www.brisdgs.org/about-bri-sdgs. 10 Carin, B. (2016), “Implementing the 2030 Sustainable Development Agenda: A G20 Development Consensus with Chinese Characteristics”, Center for International Governance Innovation, April 13 2016, https://www.cigionline.org/articles/implementing-2030-sustainable-developmentagenda-g20-development-consensus-chinese. 11 The Economist (2008), “Beyond Doha, Freer trade is under threat—but not for the usual reasons”, October 9 2008, https://www.economist.com/special-report/2008/10/09/beyond-doha.

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in 2011 and 201412 ; and created the China International Development Cooperation Agency (CIDCA) in 2018. China has become an attractive alternative to traditional Western aid. The emergence of the New Development Bank (NDB)13 and the AIIB are examples of this new financial architecture, raising questions about the future of existing institutions, including the World Bank and Asian Development Bank. While multilateral aid cooperation offers China opportunities in capacity building and enhances China’s voice in the global development agenda, its involvement with traditional donor countries and organizations is still taking shape, as China is also trying to maintain its identity as a developing country. Therefore, and most likely, trilateral and multilateral development cooperation will become increasingly popular for China’s foreign aid, with the AIIB probably engaging with established institutions such as the World Bank and the Asian Development Bank on joint development projects. China’s definition of Official Development Assistance (ODA) goes beyond the US definition of aid and includes grants, free interest-loans, concessional loans, preferential loans, loans based on market interest rates, export buyer’s credit, credit certificates and a series of financial activities. However, concessional loans on largescale infrastructure projects have been the largest component of China’s foreign aid (it is estimated at over 50% of China’s total). The White Paper released in 2014 indicates a gradual shift towards capacity-building and international cooperation in development assistance, which also is in line with many analysts’ suggestions. A major hurdle for China’s foreign aid over the last couple of years was the criticism linked to reputational risks associated with China’s foreign aid and its commercial and natural resources interests. Moreover, since aid was primarily managed by the Ministry of Commerce (MOFCOM), foreign aid was perceived by many as being influenced by commercial considerations rather than “aid”. Therefore, reversing these suspicions became a priority. In addition, an investigation from the Central Discipline Inspection Commission (CDIC) in 2014 concluded that impact assessment, monitoring and evaluation of aid projects was crucial as inadequate oversight might lead to negative environmental and social outcomes that, in turn, damaged China’s reputation. As a result, the China International Development Cooperation Agency (CIDCA) was established in March 2018, replacing the Ministry of Commerce as the lead coordinating body of Chinese foreign aid and absorbing the personnel of its Department of Foreign Aid (DFA), taking over its aid coordination functions and assuming the Ministry of Foreign Affairs’ responsibility for aligning foreign aid objectives with broader foreign policy goals. The CIDCA is also expected to increase the coordination and information sharing, accountability and efficiency in project implementation, as 12

China’s Foreign Aid (2011), http://english.www.gov.cn/archive/white_paper/2014/09/09/con tent_281474986284620.htm and China’s Foreign Aid (2014), http://english.www.gov.cn/archive/ white_paper/2014/08/23/content_281474982986592.htm. 13 At the sixth BRICS summit in Fortaleza in 2014, the leaders signed an agreement establishing the New Development Bank (NDB) in order to mobilize resource for infrastructure and development projects in emerging and developing economies ad strengthen cooperation among BRICS that will complement the efforts of existing multilateral and regional financial institutions.

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well as prioritizing quality, and zero corruption on aid projects. CIDCA will try to address the same challenges as traditional western aid donor agencies face, such as the facilitation of more exchanges and cooperation with other donors, ensuring the alignment between country-specific strategies at national and regional development levels, promoting effective monitoring and evaluation; and gathering, formulating, and publishing accurate data in order make China’s aid system more transparent and efficient and engaging more stakeholders. CIDCA is also expected to provide strategic recommendations on major foreign aid issues to China’s top leadership, such as how to coordinate aid with the BRI. The creation of CIDCA is therefore a major development in China’s development aid as it highlights not only China’s increasing role in international affairs but also and increasing willingness to raise its reputation worldwide by delivering more accountability and efficiency.

57.4 Openness, Cooperation, and Dialogue Among Civilizations Openness, cooperation, and dialogue will be crucial in the coming decades in order to successfully achieve development cooperation and promote inclusive development in less developed areas. Strategic rivalry between countries not only affects trade and economics, but also development cooperation if geopolitical objectives are intertwined. Cooperation will be more likely on issues, regions or countries that are non-sensitive; whilst competition will be more likely in overlapping or sensitive issues such as technology-related ones, or in countries and regions near major trading routes, with access to strategic commodities, countries considered to be traditional “backyards”. In this sense the BRI is considered by the US as Beijing’s platform for expanding its geopolitical grasp, and therefore the BRI will be more likely to face more competition than openness or cooperation. While many critics claim the BRI is a purely Chinese- led project, it is the lack of cooperation that will result precisely in this. More openness and cooperation, in addition, will work in favor of more stakeholders, a better selection criterion for projects, more transparency and efficiency, which in turn will benefit developing countries. Without openness or cooperation, developing countries could find themselves caught up in a geopolitical confrontation that will not lead to any real advances in development. At the last BRI Forum in Beijing in April 2019, President Xi emphasized the commitment to zero corruption, the environment, and quality infrastructure projects (which is reminiscent of Japan’s wording when referring to Free and Open Indo Pacific Strategy (FOIPS) investments in infrastructure).14 In this way, President Xi

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called for more cooperation rather than competition between the BRI and the FOIPS. According to Beijing, this is not only possible but desirable. Finally, and in order to achieve a true win–win outcome and build a community of shared future for all countries, more dialogue will be essential with the recipient less developed countries. In order to fully benefit from China’s potential and new role in international affairs, with the BRI as a framework for enhancing connectivity, cooperation, and development, developing countries must take on an active role and an interactive collaboration should be sought. Openness, cooperation, and dialogue will be needed to reach consensus and develop predictable, transparent and flexible strategies for development projects.

Part V

Civilization Exchange and Mutual Learning

Chapter 58

Mutual Exchanges of Asian Civilizations and a Community of Shared Future for Mankind: The View from Armenia Raffi K. Hovannisian

The relations and affinities among Armenian and Chinese and other Asian- civilizations date back to ancient times. They carry strategic importance in the modern period as well. Common cultural, philosophical, spiritual, and geopolitical underpinnings combine to project tectonic quality to the process, substance, sustainability, and structures of humanity into the future. As a once powerful, flourishing country on the European and Asian crossroads, Armenia has served as a vital link between the two continents for millennia through which eastern and western values were merged. The proof of that link was the Great Silk Road, an integral part of which was Armenia. These were times when Armenian products were widely known in Chinese markets and ships of Armenian merchants reached the eastern ports of Asia to Hong Kong (China). According to historical sources, Armenians are mentioned in China for the first time in the second century. They exported silk, carpets, herbs, and other products, and the small Armenian colonies were founded after the first Mongol invasions at the beginning of the thirteenth century when thousands of Armenians captured from Armenia were resettled in northern China. Later they penetrated deep into the country and settled in the coastal cities, in particular in Canton. The position of Armenian merchants in the Chinese trade was already noticeable in the 17th eighteenth centuries. They had the same rights as Englishmen and their own ships and factories. The social composition of Chinese Armenians was varied. The inhabitants of the South were mainly tradesmen and intellectuals (doctors, engineers, advocates) and mostly craftsmen in the East. Armenian doctors enjoyed great popularity. Stepan Mughdesyan headed the healthcare ministry for a while in Harbin. One

R. K. Hovannisian (B) Armenias First Minister of Foreign Affairs Founder and President, Armenian Center for National and International Studies, 0033 Yerevan, Armenia e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_58

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more remarkable fact has been noted in historical testimonies. The Bible was translated from English to Chinese by an Armenian teacher from Canton—Hovhannes Ghazaryan—and that book is considered to be the first and best Chinese translation. Armenia, as the first state to accept Christianity as a national religion in 301, has constituted even in the historical intervals of its statelessness an existential source of both European and Asian civilizations. As such, and especially after gaining state sovereignty in 1991, the country continues to bear the key potential with its native sons and daughters spread out worldwide, which is able to unite the dividing lines that appear from time to time between civilizations. Some people think of us as a unique nation, contributing a quality that is special to the world: the Armenian is capable of adapting very quickly to any situation and accepting the right decision. It is said that it is a characteristic feature of this genocide-surviving nation or its descendants which comes from the massacres and great national dispossession of the Armenians in the Ottoman Empire at the beginning of the twentieth century. It is hard to say how relevant this idea is, but the fact that the Armenian has managed to overcome the trials and tribulations of history and reach up to our days means some unusual feature, the viability of some hereditary gene, perhaps. China also had many difficulties in the past: in ancient times, the forays of the nomadic tribes, internal clashes between the dynasties and long rifts were always present in the country. One of the character traits of this nation is the emphasis on tolerance towards foreigners. The Chinese are hardworking, peaceful, and creative people. It is not in vain that China is considered a cradle of eastern civilization, of philosophic thought, and a homeland of oriental medicine. These qualities—in Armenians the rapid re-adaptability and the ability of finding the right grip, and among Chinese their diligence and pride—are extremely important qualities in the rapidly evolving world of today, where the transformations of technology, science, political structure, and world-view systems have become unprecedented. Inter-state relations are not free from these changes, which is understandable, since there are no countries on this planet left untouched by geopolitical, economical, and cultural processes. Everything lies in connectivity and interdependency. Internal changes in the United States and the European Union affect the financial assistance to developing countries, thereby changing the situation in these countries. Besides, there are problems that cannot be solved by any country alone: environmental disasters, conflicts, inflow of refugees, terrorism, among many others. Natural and man-made disasters, which existed in the past, are present and probably will continue to remain both the most serious national and civilizational world-class challenge. The effectiveness of the fight against them depends on the depth and breadth of the jointly designed and implemented policy aimed at strengthening peace, stability, and cooperation. At the interstate level, Armenian-Chinese relations should be considered in this context. Naturally, these relations are strong because they are anchored in centuriesold friendship and are distinguished by mutual trust and respect. 27 years ago, with the establishment of diplomatic relations between our states, we announced the launch of a new stage of cooperation, creating favorable prerequisites for expanding and

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deepening inter-state ties. This is the case when relationships are actually bilateral, but they touch a wider range of interests. That is the reason we have a great deal of responsibility and satisfaction with the political dialogue between our countries, close cooperation, the mutual understanding on issues that are important in international structures and in regional and supranational instances. Sustainable and lasting inter-state relations are based on both substantive and spiritual rapprochement of the two peoples and the friendly feelings towards each other, which are achieved through the consistent reinforcement and development of economic and especially educational and cultural ties. Culture is the nation’s spirit, the language that is accessible to all peoples of the world without an interpreter. The Confucius Institute and the Chinese School of Advanced Studies in Yerevan, as well as the Armenian Studies Center opened at the Foreign Language University in Dalian, are dedicated to the promotion of Chinese and Armenian cultural values, establishing free contacts between future generations, and mastering each other’s cultures. The factor of educational institutions in Armenian-Chinese relations is symbolic. Confucius, a prominent thinker and philosopher, has told the generations: “If your plan is for one year, plant rice. If your plan is for ten years, plant trees. If your plan is for one hundred years, educate children”. For us, the option of educating people is the most preferred, because classical institutions and organizations will gradually withdraw from the twenty-first century by giving way to the individual citizen—with his wide range of thinking and readaptability in the twenty-first century, and to her innovative mind and ideas. No matter how much the technologies, artificial intelligence systems and other accelerators of scientific and technical progress will advance, the key value of the era of rebuilding the world and creating a new reality will be a human being, an educated specialist. Armenia and China also see collaboration within the framework of the Forum of Ancient Civilizations, where they are members with seven other countries— Bolivia, Greece, Egypt, Italy, Iran, Iraq, and Peru. These are the countries that have undertaken commitments to promote tolerance, cultural diversity, and dialogue among civilizations. The Forum is designed to protect and preserve cultural and humanitarian heritage, creative transformation, innovative development of traditional culture, and a harmonious and multifaceted exchange of civilizations. China is a macro-civilization that can enrich Armenia with its culture and at the same time enjoy the Armenian culture by communicating with the world treasury of Narekatsi’s poetry, Momik’s miniature painting, Tamanyan’s architectural talent, Komitas’ enchanting melodies, and the Armenian Khachkar (cross-stone) miracle. The rapid progress of the country is, of course, anchored in a knowledge- based economy that needs a solid foundation for the development of science and education. The International College of Dilijan (UWC), the American, French and Slavonic Universities of Yerevan, the Tumo Creative Technologies Center where they teach 12- to 18-year-old children subjects related to information technology, are serving to this purpose now. The Confucius Institute has also become a unique platform for

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Armenian-Chinese cooperation. And as a result, Armenia has taken unprecedented strides in IT and precision engineering and continues to multiply its achievements. Another important area of Armenian-Chinese joint interests, where unfortunately along with visible success there are still some unused opportunities, is economic cooperation. China is Armenia’s second largest trade and economic partner after the Russian Federation. The trade turnover between the two countries has been steadily deteriorating over the past few years, fluctuating within the range of $350– 550 million. By way of comparison, in case of neighboring Georgia this figure is 2.5–3 times higher. According to some expert estimates, in 2018–2030 China will have an annual average of 8 percent growth in imports. Clothing, footwear, machinery and chemical products, equipment, construction materials, foodstuffs, etc. are imported from China to Armenia. The range of products exported from Armenia to China is more modest: minerals, including copper and gold concentrate, agricultural products, cognac, wine. Every year, the Chinese government provides a substantial amount of assistance to Armenia— Chinese buses, ambulances, and more. Armenia is one of the few countries that did not experience major domestic political tensions as a result of a non-violent, bloodless “velvet” revolution in April and May 2018, and now stands far ahead of many countries in the region according to the indicators of democracy, rule of law, human rights, and other progress, which is an important precondition for investment attractiveness. Effective measures to seriously reform the investment climate in the post- revolutionary Armenia are envisaged starting with the changes in tax legislation. Today Armenia has free trade agreements with CIS countries with a population of about 250 million. By joining the EAEU, the country gained free access to a 170 million common market, the right to import raw materials for EAEU and privileged import conditions for 750 products from third countries. The Armenian side has expressed readiness to become a center of interests for Asian businessmen, suggesting that they explore the possibilities of establishing regional headquarters of other Chinese and other Asian companies in Armenia. The energy sector can be particularly attractive for businesses, involvement in the North–South highway, or Armenia-Iran railroad construction—all in line with the Silk Road initiative. The Great Silk Road brand, as well as its new “One Belt, One Road” initiative, can provide effective cooperation in tourism, which is important not only from the economic point of view but also from intercultural dialogue. Tourism in Armenia is one of the most dynamically developing branches. This, in its turn, will boost the development of aviation, including ultimately a Yerevan-Beijing direct flight, which is the “weak link” of the Armenian-Chinese relationship. Because of Armenia’s rich cultural heritage, geographical location and other factors, the tourism destination promises good prospects for potential investors. China is a culture-based country. It has an enormous historic experience, a powerful economy, advanced technology, rich national traditions, and leading positions in international politics. All this will give it the courage to take on the role of an axis of peacekeeping, stability, values of humanism in the region for the sake of Asian civilizations and universal common future of mankind and for the

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sake of a united, safe, peaceful Middle Eastern and Eurasian region. Civilizational, geographical, historical-cultural realities speak of this prospect. Soon the Chinese embassy will have a new building in Yerevan, the first floor of which was laid in August 2017. It covers an area of about 40 thousand square meters and is the second largest in the Eurasia region. This beautiful structure reflects the nature of the friendly relations between Armenia and China, the growing scale of cooperation and the vision of a secure future. The geographical distance that exists between our countries, in large part, is not an obstacle to Armenian-Chinese relations. There were no barriers two thousand years ago, and there cannot be in the twenty-first century. I remember the ingenious description of one of the Chinese Embassy’s employees in this regard: “Distance cannot separate true friends”. One could not have said it any better.

Chapter 59

Openness, Cooperation, and Dialogue of Civilizations Hisham Mohamed Elzimaity

59.1 A Miracle Achieved in 40 Years Succeeding in taking 800 million people out of poverty was a huge task. The miracle achieved in the last 40 years by the Chinese people in the field of development and eradication of poverty is without equal and beyond comparison. In this context, China defined the characteristics of its international development model or what some call the “Beijing Consensus” which includes investment- led rather than foreign-aid based development; resource for infrastructure swaps instead of aid, and a vital focus on technology transfer, investments in human resource development, and capacity building projects in order to ensure the sustainability of development projects. Creating sustainable affordable quality infrastructure for all is essential for the success of the Belt and Road Initiative. Empowering the private sector, including SMEs, to maximize finance for development was geared to effectively contribute towards achieving inclusive growth, making BRI a catalyst for reducing poverty and inequality and advancing shared prosperity. The world watched in admiration as the Chinese economy experienced unprecedentedly rapid growth over the past decades. China’s GDP skyrocketed to $13.6 trillion in 2018, with an amazing average annual growth rate of 9 percent. The past 30 years also saw remarkable improvement in Chinese people’s living standards, with per capita disposable income soaring. Such an economic miracle had never been seen before in world history. Moreover, China’s economic achievement is incomparable I offer my sincere congratulations to the People’s Republic of China and its courageous people for their 70th anniversary, and for their unparalleled and unmatched achievements, with appreciation to our hosts for the warm hospitality in the Great City of Shanghai. H. M. Elzimaity (B) Former Ambassador Secretary-General, Egyptian Council for Foreign Affairs, Cairo Governorate, Egypt e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_59

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with the developed economies, whether England during the Industrial Revolution, America after the Civil War, or Germany and Japan after World War II. By seizing the historical opportunity of accelerated globalization, China promoted its reform and development through furthering openness. With its comparative advantages in terms of geographical position, labor quality, cost, and industrial chain, China indeed enjoyed the huge benefits of the global division of labor by unswervingly pursuing reform and opening up. The reason why the Chinese economy created miracles is precisely because it has taken a path that suits its own national conditions, rather than blindly following western theories.

59.2 Africa and the Middle East Learning from China There are many practical lessons that can be drawn from China’s experiences over the past decades. Every developing country, especially in Africa and the Middle East, has the opportunity to accelerate its growth once it develops its industries according to its comparative advantage at each level through technological innovation and structural transformation. In other words, developing countries must grow fast, accumulate capital rapidly, and upgrade their endowment structure quickly. China’s experience also provides useful lessons since in the reform process, it is advantageous for a developing country to remove various distortions of incentives to improve productivity and, at the same time, adopt a dual-track approach, providing some transitory protections to unviable firms to maintain stability, but liberalizing entry into sectors in which the country has comparative advantages. Such an approach can improve the resource allocation process. By adopting such an approach, developing countries can also achieve stability and dynamic growth in their economic liberalization process. It is unfortunate that today, we live in a world of contradictions. On one hand, with growing material wealth and advances in science and technology, human civilization has developed as never before. On the other hand, numerous regional conflicts, global challenges such as combating terrorism and the refugee crisis, as well as poverty, famine, unemployment, and the rising level of inequality within and across countries have all added to the uncertainties of the world. Some experts concluded that many of the world problems were not necessarily caused by economic globalization. The lack of robust driving forces for global growth made it difficult to sustain the steady growth of the global economy, and inadequate global economic governance made it hard to adapt to new developments in the global economy. Uneven global development made it challenging to meet people’s expectations for better lives. Therefore, a dynamic, innovation-driven growth model should be developed, a well-coordinated and inter-connected approach to build a model of open and win– win cooperation should be pursued, and an example of fair and equitable governance in keeping with the trend of the times should be put in place, so that people’s interests are put first by pursuing reform and innovation, common development through opening up.

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China boosts the performance of economic growth, increase market vitality to add new impetus to growth, foster an enabling and orderly environment for investment, and vigorously foster an external environment of opening-up for common development. Hence the far-reaching “Belt and Road” initiative shall deliver benefits far beyond China’s borders and will help achieve the win–win concept.

59.3 China-Egypt Long and Historic Friendship Friendship between China and Egypt has stood the test of time. In May 1956, Egypt was the first African and Middle Eastern country to establish diplomatic relations with the People’s Republic of China. Later that year, Egypt was subjected to a tripartite military aggression by Britain, France, and Israel, for having nationalized the Suez Canal. Beijing leaders didn’t hesitate to consider this aggression a direct threat to China, demonstrated solidarity with the Egyptian people by expressing their readiness to send volunteers to defend Egypt, and even offered Cairo a symbolic gift of 20 million Swiss Francs. Egyptians remain appreciative to Chinese friends for their indisputably genuine position. Today, 63 years later, the China-Egypt comprehensive strategic partnership and their determination to achieve win–win cooperation through the Belt and Road initiative, is a remarkable example of solidarity and friendship to be followed by others. China, Egypt, Africa, and the Middle East must jointly create an environment that establishes a fair, equitable and transparent system of international trade and investment rules, and boost the orderly flow of production factors, efficient resources allocation and market integration, where we advance the building of free trade areas; promote balanced and development-oriented liberalization and facilitation of trade and investment; pursue innovation-driven development by intensifying cooperation in leading areas such as the digital economy, artificial intelligence, nanotechnology, and quantum computing, advance the development of big data, cloud computing, and smart cities so as to turn them into a Digital Silk Road of the twenty-first century through software connectivity, and pursue the new vision of green development and a way of life and work that is green and low-carbon. Together we must build the Educational Silk Road and the Health Silk Road, and carry out cooperation in science, culture, and people-to-people exchange. The Suez Canal Economic Zone is considered an integral part of the Belt and Road for hosting several mega industrial, technological, and logistic zones to enhance the free movement of trade, industry, transportation, and innovation on the regional, African, and international levels, and by such, opening viable opportunities for economic integration. The benefits of Egypt’s trade agreements with European, African, and Arab states allow the products of Chinese investments better preferential market access. The zone is a few hours from the Southern and Eastern Mediterranean Ports, Jeddah in Saudi Arabia, as well as the Ports of Djibouti and Mombasa.

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China and Egypt work together to make Egypt a pivot or hub for BRI involving Chinese cooperation on infrastructure projects, with additional investment in industrialization in the Suez Canal Economic Zone and building the new administrative capital outside of Cairo, since such projects are tied to the BRI, and seen as a win for the Chinese initiative. In this regard, it is pleasing to note that both China and Egypt are among the nations that resolutely fight terrorism with firmness because of its negative impacts on their global strategic interests of ensuring secure and sustainable international trade of goods, as well as promoting energy security. President Xi encouraged Chinese companies to participate in Egypt’s major projects, including developing the Suez Canal Corridor and building the new administrative capital outside of Cairo. China and Egypt have already taken steps to cooperate on those projects which are expected to create more than 20,000 jobs for Egyptian youth. The benefit for China is that projects undertaken in Egypt are directly tied to the Belt and Road and seen as a solid support for the Chinese initiative.

59.4 China, a Major Strategic Global Player China, as a major strategic global player and an active permanent member of the UN Security Council committed to peace, stability, progress, and development should continue to act as a builder of world peace and contribute to global development, while upholding international law and order during the next 70 years and beyond. Back in 2015, the international community collectively committed to the comprehensive realization of global inclusive growth through the adoption of Agenda 2030 for Sustainable Development, which is integrated, indivisible, and balances the three dimensions of sustainable development: economic, social, and environmental. This Agenda is considered a milestone towards global sustainable development, and a plan of action for overall prosperity. As outlined in Agenda 2030 document, the goals and targets are setting out an ambitious and transformational vision which envisages a world free of poverty, hunger, and disease; free of fear and violence, a world with universal literacy, equitable and universal access to quality education, to health care, safe drinking water and sanitation, improved hygiene; and where food is sufficient, safe, affordable, and nutritious. A world where human habitats are safe, resilient, and sustainable and where there is universal access to affordable, reliable, and sustainable energy.

59.5 Belt and Road: A Game Changing Initiative While addressing the Belt and Road Forum for International Cooperation, President Xi accurately underlined that the pursuit of this vital initiative requires a peaceful and stable environment, and a new spirit of international relations where nations forge partnerships of dialogue, not confrontation, respect each other’s sovereignty

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and territorial integrity, each other’s development path and social system, and each other’s core interests and major concerns. He added that development needs to be more inclusive and balanced, the gap between the rich and the poor needs to be narrowed, and that an open and resilient financial system was crucial to supporting sustainable growth. Developing countries agree to this vision. Instability in some regions is causing insecurity as terrorism is raging. Therefore, all nations should intensify counter-terrorism efforts, address both its symptoms and root causes, strive to eradicate poverty, and achieve social justice. Our nations must jointly create an environment that establishes a fair, equitable and transparent system of international trade and investment rules, and boost the orderly flow of production factors, efficient resources allocation and market integration, where we advance the building of free trade areas; promote balanced and development-oriented liberalization and facilitation of trade and investment; pursue innovation-driven development by intensifying cooperation in leading areas such as digital economy, artificial intelligence, nanotechnology and quantum computing, advance the development of big data, cloud computing and smart cities so as to turn them into a Digital Silk Road of the twenty-first century through software connectivity, and pursue the new vision of green development and a way of life and work that is green and low-carbon. Together we must build the Educational Silk Road and the Health Silk Road, and carry out cooperation in science, culture, and people-to-people exchange. It is pleasing to note that within six years, the far-reaching Belt and Road Initiative was supported by over 150 nations and international organizations. Most of them signed cooperation agreements with China, and Chinese companies offering over $160 billion of investment by launching major projects in countries along the routes, creating many local jobs and considerable potential for growth and development. It is worth noting that the Silk Road Fund was established with a capital of $100 billion, and the Asia Infrastructure Investment Bank, with Egypt as a founding member, was set at $100 billion to serve as engines to achieve the win–win concept. Many believe that the success of the Belt and Road Initiative depends on stability, security, and poverty eradication from regions along the BRI. The success of this great initiative depends on restoring stability to countries like Afghanistan, Palestine, Syria, and Iraq which fall on the historic Silk Road Economic Belt, while Yemen, Somalia, Libya, and the Sahel Region of Africa are all adjacent to the Maritime Belt for the 21st Century. China, as a major strategic global player and a permanent member of the UN Security Council committed to peace, stability, progress, and development should continue to act as a builder of world peace and contribute to global development, while upholding the international order. China has always put the people first during its development phases, increasing their benefits, ensuring the people are their own masters. China effectively safeguarded the people’s right to development and carved out a human rights development path with Chinese characteristics. China actively participated in global governance and promoted inclusive development, striving to create conditions and opportunities for all nations, especially

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developing countries, so that they share the fruits of development. This position by China is highly appreciated by African nations in particular.

59.6 China and Africa: Natural Partners for Development The African Union’s Agenda 2063, launched in 2013 is an ambitious 50-year vision, developed by African strategists, aspiring to achieve an integrated and prosperous Africa, guided by five 10 year plans, where the international cooperation agenda will focus on inclusive growth and sustainable development, political and economic integration, good governance, peace and security, and building global partnerships. African nations appreciate China’s continued support to their efforts dealing with issues of peace and security, and the development of Africa, as Beijing is actively involved in more than 3,000 infrastructure projects with more around 250,000 Chinese workers building roads, industrial parks, railways and port networks across Africa, connecting them to major global sea routes, and areas such as the Gulf of Eden, the Red Sea and the Suez Canal, which are vital routes connecting Africa to Asia and Europe. Today, almost one million Chinese citizens live in Africa, while more than 200,000 Africans reside and work in China. It was noted with appreciation that international cooperation on the implementation of the SDGs were among China’s priorities and were adequately reflected in the substantive outcomes of the G20 Hangzhou Summit in September 2016 where a major milestone was announced, namely the Initiative Supporting Industrialization in Africa and LDCs. This initiative added significance due to its explicit sectorial focus on supporting agroindustry, broadening production bases; investing in secure energy; developing resilient infrastructure, leveraging domestic and international finance, and promoting science, technology, and innovation. There is an urgent need to further advance the China-Africa comprehensive strategic and cooperative partnership, featuring political equality and mutual trust, mutually reinforcing economic cooperation, mutually enriching cultural exchanges, assistance in security, and coordination in international affairs. Agenda 2063 was recognized as a crucial plan for Africa to achieve stability, development, and integration. Ministers agreed that the improvement of Africa’s agricultural value chain and agricultural processing were essential in the promotion of agricultural modernization in Africa. They also reviewed progress made in the implementation of the China-Africa ten cooperation plans. Needless to say, genuine and effective international cooperation is essential in providing developing countries with appropriate facilities to foster their development. No developing or least developed country would be able to attain them, partially or fully, without effective public and private partnerships from the developed world and international financial institutions. These partnerships should focus on unleashing the enormous potentials of peoples, resources, and comparative advantages, through substantial investments and finance for development which promote entrepreneurship, human and technological capacity, and sustainable growth.

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China is commended for defining the characteristics of its international development model or what some have coined as the Beijing Consensus which are: investment-led rather than foreign-aid based development; resource for infrastructure swaps instead of aid; Investments in improving people-to-people bonds; and a vital focus on technology transfer, investments in human resource development, and capacity building projects in order to ensure the sustainability of development projects. Availing sustainable affordable quality infrastructure for all is an African priority that secures the success of the Belt and Road Initiative. All trading partners, especially developing nations from the Middle East and Africa are hopeful that the multilateral trading system and the WTO will be preserved, and that trade disputes shall be solved within the rules of the World Trade Organization. They all believe that no trade disputes among their two biggest trading partners are needed at this difficult juncture for global economy.

59.7 BRI’s Rightful Place on the Global Agenda To conclude, it is not an exaggeration to say that the Belt and Road Initiative deserves its rightful place on the global developmental agenda, as it promotes inclusive development, poverty eradication and shared prosperity. It is a concrete example of the realization of Agenda 2030 locally, regionally, and globally. We should, therefore, ensure that all instruments and mechanisms of global governance are made available for the full realization of this crucial endeavor which, as long as it is based on mutual benefits, gives much needed hope to the peoples of all participating countries for a genuinely prosperous future.

Chapter 60

The Globalization of Virtue: Reflections on Confucius and Aristotle Christopher George Vasillopulos

60.1 Coincidence? In the last three decades, there has been a resurgence in Confucian and Aristotelian scholarship, both East and West, including a burgeoning of comparative studies. This academic outpouring has coincided with the emergence of China on the world stage. From an impoverished Third World nation-state, China has become the world’s second largest economy, a major military power, a significant investor in every continent, and a diplomatic powerhouse. This is no coincidence, for it reveals much more than academic curiosity regarding the striking similarities between the great Chinese thinker and the Greek. This scholarship indicates the growing perception that a possibility exists, unique in world history, for implementing a global ethic of virtue. Now, before you consign me to the ash heap of academic utopians, my conception of a global ethic is anything but utopian. It is based on a realistic analysis of ordinary business practice. The globalization of virtue will not eliminate the conflict between husbands and wives, parents and children, or nation-states. Its advent will simply codify the billions of business transactions that take place every day, transactions that span continents, oceans, and cultures. These transactions depend on virtues explicitly advocated by Confucius and Aristotle over 2000 years ago. They do not depend on utopian ideas any more than they require the dominance of a single culture. They do depend on an assumption that common human nature underlies the remarkable variety of cultural and historical experience. Human nature allows for the capacity to reason, to make informed, fact-based choices, take personal responsibility, to strive for excellence, to plan, to compete, to cooperate, and to express one’s uniqueness. Of course, each of these capabilities C. G. Vasillopulos (B) Eastern Connecticut State University, Willimantic, CT, US e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_60

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would need qualified cation when applied to different historical periods and varying cultural settings. Nevertheless, properly understood these universal attributes provide a reasonable basis for the globalization of virtue. The basis of my contention finds support in the genius of Confucius and Aristotle. Allow me to qualify a concept that seems to many scholars misapplied to Confucius and Aristotle: individual or individualism. If by “individual” is denoted an autonomous being, free of biological or societal influences, then neither philosopher was an individualist. But then neither would have believed that such a creature was human in any meaningful sense. If, however, an individual should be conceived as a biological, psychological, and social product of his parents, who in turn have profound relations with the larger society, then Confucius and Aristotle might be considered individualists. Or, at the very least, philosophers who believe in the primal significance of the concept of the “porous individual”. One simply must answer where the locus of responsibility lies in their thought. Clearly, it resides in the “porous individual”. Both philosophers emphasize the individual’s obligation to pursue self-mastery or self-perfection. Both emphasize respect for family and the need for respectful relations with members of the larger society. Both value friendship, as one of the most important keys to perfected self-mastery. Each of these pursuits implies individual responsibility, even when societal or political impediments obstruct the individual. Virtue begins and ends with the individual. Only a virtuous individual can have proper and fruitful relations with the larger society and only virtuous officials can rule properly. Neither philosopher believed the individual could succeed on his own, any more than he could have produced himself. Apart from providing the materials for survival, the social order must educate the individual for virtue, must educate for character. Only then could the “porous individual” fulfill himself and participate properly in the pursuit of the common good. It would be difficult to provide more differing societies than ancient China and Greece. And yet, despite profound differences in geography, agriculture, size, rivals, religion, and history and culture, China and Greece produced Confucius and Aristotle, great thinkers with remarkably similar outlooks regarding how to live the good life. They shared a moderate, calm temperament, which manifested itself in a respect for the facts, tradition, and ordinary people. They were suspicious of radical change, tyrants, and imperialism. They based their thought on the primacy of the family, under firm and benevolent paternal control, upon which they built their conceptions of a good society. Despite its temptations and its tendency toward excess, they recognized the need for prosperity, which inevitably required transcending a subsistence agricultural economy. Although suspicious of trade and of money-making in general and fearful of the power of commerce to transform society in a reckless and uncontrolled manner, they knew social stability, even social survival, depended on the wealth only commerce could produce. To the degree that commerce and trade was necessary for prosperity and therefore the survival of the social order, the temptation to greedy accumulation had to be curtailed. Money-making had to be limited both in the individual and in the society. Only then could it serve the common good, not just those who made the money. This would require wise policies of taxation, as well as inducements to contribute

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to social goods, like defense, festivals, religious observances, and cultural events. If it was necessary to tame the potentially savage beast of commerce, it was equally necessary to tame the potentially savage beast of officialdom. For both Confucius and Aristotle, the best government would be a monarchy run by a virtuous king. Confucius believed there was no real alternative to a beneficent monarch who would employ a virtuous bureaucracy. Aristotle had more choices. He identified bureaucracy with Asian despots and valued the Greek polis the more for needing officials the less. His best practical government, because depending on virtuous monarchs seemed too risky, was mixed. Neither the rule of the Many, democracy, nor the Few, one form of oligarchy or another, mixed government allowed the Many to feel their voices were heard and the Few to make policy. Aristotle believed that the efficiency of one man rule was well subordinated to shared power. Confucius believed there was no alternative to a beneficent monarch. Given the differences in their political settings, they both may well have been right.

60.2 Ancient Athens: The Temptation of Empire I need not rehearse the differences between ancient Athens and China. Their similarities are for our purposes more significant. Seventh-century Athens was largely agricultural, barely able to feed itself, even with its access to the sea. It had to trade its surplus olives to survive, as its population recovered from the devastation of its nearly three hundred years of Dark Ages. Its familiarity with the sea enabled Athenians to take advantage of long standing trade, which extended across Asia for thousands of miles. Soon Athens was manufacturing products for export. A merchant class developed, initially stemming from wealthy farmers, but soon becoming an independent commercial class. In the middle of this development, at the beginning of the sixth century, these changes in agriculture imperiled small landholders, who found it increasingly difficult to compete with large landholders. Using their bodies as collateral, they borrowed money, often losing their freedom as well as their land. Civil war loomed, the classic struggle of the Few and the Many. Realizing that war was an existential threat to them all, they established a process of conflict resolution, under the leadership of Solon. He laid the foundation of civil law and dispute adjudication, that we now call, Due Process. Predictably, both sides were unhappy with Solon, not getting what they believed he had promised them. Fortunately, his reforms were institutionalized by a “tyrant”, that is, a ruler who seized power. It is important to realize that Due Process did not arise from an exalted instinct for Justice or a set of Divine Laws. Its source and its objectives were down to earth. A mutually acceptable process for resolving inevitable property disputes was needed. Solon provided it; Pisistratus, the tyrant, solidified it. Athens, now stabilized, prospered as never before.

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By the early fifth century, Athens was prosperous enough to man an army and navy that defeated the Persian Empire. In the wake of this astonishing victory, Athens became the leading Greek state and a major player in a burgeoning international trade. The slow development of commerce between the Seventh and the fifth centuries accelerated. Athens became rich and imperial. At the same time, it became democratic, the most participatory democracy the world has seen before or after. As the Many increased their political control, the opted to oppress their neighbors, preferring theft to work. The Greek states, under the leadership of landlocked Sparta, united against them. Athens never recovered from their defeat in the Peloponnesian War. A great deal of Aristotle’s skepticism regarding democracy resulted from the link between democracy and imperialism. The Many are too easily overcome by greed. Demagogues, interested only in power, pander to them with a series of shortsighted policies. Even the remarkable Pericles did not know how to dismount the imperial tiger. To avoid the temptations of oppressing others for gain requires virtue. The rule of the Many may make the application of virtue more problematic but does not cause the problem. The citizens must be schooled in virtue. Only then can they and their leaders formulate policies that will serve their long term interests.

60.3 Nineteenth Century America: The Triumph of Greed After the catastrophe of the Civil War, the American economy, no longer retarded by the interests of Plantation slavery, took off. The widespread entrepreneurial activities of ante-bellum America, including its farmers, industrialized. Benefitting from major infrastructural developments in transportation, communication, and manufacturing, small town America became urban. Its population exploded, as immigrants from around the world descended on the land of opportunity. As only a few noticed, by the beginning of World War One, America was the world’s leading industrial power and growing fast. Rapid change always dislocates the social order, as its benefits spread unevenly through the economy. For the first time, European style class struggle appeared, calling into question the unparalleled power of the titans of the economy, who held monopoly power over steel, coal, oil, sugar, beef, and rail industries. On the basis of new-found wealth, America was partly pulled and partly pushed onto the world stage. While these developments cascaded down the last decades of the nineteenth Century and the early decades of the twentieth, they changed the fabric of American society. The cohesion of a largely agricultural society began to loosen. Although never really a peasant class, farmers began to see their influence dissipate in favor of a fabulously rich urban class. Jeffersonian virtue was giving way to capitalist greed. Although the middle class continued to grow and its standard of living increase, an impoverished lower class developed both in rural and urban areas. In hindsight, it seems reasonable to apply an Aristotelian analysis to these developments. With the development of democracy, a consequence of the Jefferson/Jackson

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presidencies, deference to authority diminished. Democracy increasingly became rule of the ordinary over the ordinary. Educated elites were in retreat. Office holders wore their lack of education as a badge of honor. A major consequence of fundamentally ignorant office holders was that when government regulation of the economy became mandatory after the Civil War, no one knew what to do. The corruption and the ignorance of office holders, justified as suspicion of central authority, had decapitated the government in the eyes of the people. Laissez-faire ruled the day. The triumph of greed over virtue had a deeper Aristotelian cause. The Gospel of Success was premised on the idea of an autonomous individual. His success and failure were his own, subject only to fortune. His values were his own, if religious, having a divine source, if not, his own product. The society had no part of this equation. The interplay between the individual and society, manifested in friendship, tradition, mutual defense, and education for virtue, ceased to be relevant. In these circumstances, the most dramatic entry of America into global affairs, World War One, on the side of Britain and France, followed all too predictable lines. Initially, President Wilson wanted America to be an honest broker between the belligerents. Once it became clear that the Allies would buy all America could produce, the idea of brokerage receded. When American troops provided the decisive difference in the struggle, Wilson’s objective of a ‘peace without victors’ went a glimmering. Power politics took over, creating an impoverished, humiliated Germany that would count the days for revenge. The American opportunity to play a virtuous role in world affairs was lost. It is too easy to blame President Wilson. Leaders, regardless of the form of their governments, must adhere to forces beyond their control. Wilson’s virtuous instincts were easy victims of political realism laced with greed. Modern Aristotle scholars, especially Victorian British, believe that the triumph of greed was inevitable, given a market economy. After all, Aristotle hated commerce and trade, favoring a self-sufficient, autarkic, agricultural economy. Aristotle did favor self-sufficient economies because they would not be tempted to steal from their neighbors. He did not, however, believe that Athens could ever have been selfsufficient without trade. Non-agricultural money-making was essential. Aristotle’s concern regarding commerce was two-fold: first, it created rapid change, dislocations that would require exceptionally wise political leadership to neutralize; second, it created the illusion that money-making was a proper end in itself, rather than an essential condition for proper ends. The goal of the polis was the happiness of its citizens, defined as the activity of virtuous living. Money created the possibility for the leisure necessary for happiness. It financed schools, festivals, religious activities, and defense. Far from being antithetical to virtue, prosperity was essential to it.

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60.4 The Chinese Miracle Scholar/Officials, That is Bureaucrats Whose Virtue Would Erase the Temptation to Be Self-Serving I trust that my analysis has struck some resonance with those familiar with Chinese economic development over the past four decades. Despite profound differences with Ancient Greece, some of the same issues arose and some of the same remedies applied. These responses did not require an understanding of Aristotle, because they had already been advocated by Confucius. Let us consider three of the greatest differences in the two economies. First, China was overwhelmingly an agrarian society, notwithstanding trade by coastal merchants. Second, although China faced many internal struggles for power, it did not have to contend with an existential threat posed by a powerful neighbor. Third, China had a well-trained and established bureaucracy. Of course, as was well understood by Confucius, the very expertise and pervasive significance of officials presented a danger. Their power had to be constrained. To limit official abuse of power, Confucius proposed compulsory education, whose aim was to produce virtuous officials. By serving the people, by properly applying their expertise, officials would serve the most important objective of the society: stability. So long as the people believed that officials had their interests in mind, the people would accept the government’s policies and honest mistakes would be forgiven. Difficulties arose in the modern era in the form of aggressive, wealthy, and technologically advanced European nation-states. The essentially static Chinese state and its cardinal economic objective of agrarian self-sufficiency had no way to resist the intrusions of the West. Perceiving little need to change, China became prey to those states that were profoundly dynamic and who wished to prosper at China’s expense. From the perspective of the West, Chinese stability was considered backward and weak, and ripe for exploitation. The most pernicious exploitation took the form of flooding China with opium. The most sophisticated and refined civilization in Asia, if not the world, became a hot bed of White Man’s greed and arrogance. Worse was to come. As Europeans were engaged in mutual destruction, an upstart Asian nation took their place oppressing China. Not content with stripping China of its wealth, an all-conquering Japan wanted to destroy its sovereignty. With the defeat of Japan in World War Two, China was free to reorganize itself. Profound revolutionary change resulted. I do not need to rehearse the Chinese miracle to this audience. It might be useful to note, however, how much of its successes can be attributed to Confucian values. This proposition implies much more than how similar Confucian values are to basic middle class values and fair-dealing business practice. It undercuts the false notion that market economies are essentially Western and that their global spread is imperialism with a new name. It is simply false to assert that fairness, property rights, honesty, rule of law, prudence, individual responsibility, fact-based analysis, and competition are peculiarly Western values. All of these are as much Confucian as they are Aristotelian

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values. As they are based in human nature, this should hardly surprise. They long predate the modern nation-state. Moreover, these values contradict imperialism. The corollary is that the more they globalize, the more they undermine imperialism. The imperialist assumption has always been that in order to prosper, an advanced people should control the less advanced. To be advanced, imperialists believe, implies that an advanced nation has moral superiority over the less advanced. Therefore, to rule these inferior people benefits them, by introducing them to superior values. In this light, the power of the values that underline market economies reveal themselves. They are essentially cross cultural, for they presume a universal human nature to want others to deal with you as they would want you to deal with them. Without this fundamental assumption, the trillions of dollars of trade per day would be inconceivable. I realize that “market values” of property rights, good faith contracts, honest negotiations, fair dealing, and the rest seem to idealists as tawdry virtues at best. What are they to the higher virtues of Justice or Equality? Don’t market virtues undermine efforts to advance the higher virtues by distracting the masses with trivial material benefits? I would take this criticism seriously, if its advocates would show me the same level of consensus that the globalization of market values implies. To the extent that the concepts of Justice and Equality are culturally dependent, they will remain sources of strife. Of course, these values must be sorted out within each society. Efforts to impose them on others have resulted in the hundreds of millions of deaths and oppression of billions of people. Tawdry as they might seem, market values, as espoused by Confucius and Aristotle, have brought the world closer together and lifted billions out of poverty with the promise of transforming the lives of billions more. Of course, neither Confucius nor Aristotle believed that market values were sufficient, important as they are. They are essentially means to prosperity which itself is a means toward perfected self-mastery and a society that aims to raise the standard of living for as many of its citizens as possible, which would allow them to pursue happiness in the form of virtuous activity.

Chapter 61

Silk Road Civilization Askhat Kessikbayev

61.1 Summary Although the Silk Road derives its name from the lucrative trade in Chinese and mainly indicates the connection of trade routes into an extensive transcontinental network, it is also a modern conception of the dialogues and interactions among Civilizations. It is well understood that these dialogues and interactions were the results of long-rang communications. As well, the Silk Road has always played the role of the integration of humanities. Regardless of the length and width and depending on the distance, all roads have their value and utility. In common world heritage, no other road except the Silk Road contributed to such large-scale mutual understanding, dialogue of cultures, and interpenetration of spaces. The ancient Silk Road can without exaggeration be called one of the most striking and significant achievements of humanity in world history. The main feature of the Silk Road was a mix of ancient, powerful civilizations of East and West. More than two thousand years ago, that old multifunctional path had global significance. It served as an important link in the exchange of goods and the diffusion of advances of civilization from the Mediterranean Sea to the Great Wall of China. The interaction of the East and the West in the most general sense was due to the Silk Road. Over the millennia of its existence, the ancient Silk Road witnessed the initiation and advancement of religion, migration of peoples, and evolution of history, and over the millennia has been the main thoroughfare, as the ring road enriched the whole Old World of Eurasia and Africa. It should be noted that the giant artery connecting the Pacific and Atlantic oceans closely linked the historical destiny of many nations and peoples, was a regular A. Kessikbayev (B) International Turkic Academy, Ankara, Turkey e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_61

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conductor of not only goods and technologies, but also the ideas of religious and philosophical systems. The Silk Road had the highest importance as value conductor. This relationship almost has not changed, whereas along the Silk Road every century regimes, monarchies and Khanates changed. Cities developed, new culture created, the religion spread. The Silk Road continued to exist and perform its functions in the period of decline of the old empires, as well as the silk thread existed during the time of formation and strengthening brand of new giant and mighty powers. Wars, civil strife and other internal political conflicts continually occurred between these empires. However, communication via the Silk Road was never interrupted until the fifteenth century (up to the great geographical discoveries). A careful study of the history of peoples, nations, and tribes living along this giant highway gives reason to believe that the Silk Road itself was a certain civilization. A civilization that despite different kind of dramatic events in Eurasia continued to prosper and provide for exchange. Nevertheless, unlike other civilizations, that have a clear starting point, the Silk Road civilization can be described as a multidimensional multisource civilization. It closely combines cultural characteristics of Chinese civilization and reflects cultural values of the peoples of Central Asia and Turan.1 In addition, the most important civilization of the Silk Road is based on tolerance. Ideas of more patient, tolerant relationship between nations living in the same spare transmitted via the Silk Road. The “Silk Road Economic Belt” initiated by the Chinese side breathes new impetus to the old initiative. As a result, in autumn of 2013, since the Chinese side announced the new initiative of the grandiose project “Silk Road Economic Belt,” traffic around reanimation of the Silk Road sharply intensified. Certainly, one of the motivating factors of these processes is the willingness of China to use its financial capacity. Central Asian states themselves, primarily Kazakhstan, have also repeatedly stated the feasibility of reanimation of the ancient transport route. The President of the Republic of Kazakhstan back in the mid-1990s offered to revive the New Silk Road, believing that land transport routes between China and Europe can ensure prosperity and development of all the countries located along the Silk Road. In recent years, with the deepening of the process of globalization of international economic relations on the Eurasian continent and the growth of cargo traffic between Asia and Europe, the urgency of creating an integrated Eurasian transcontinental bridge has even more increased. Construction of multiple routes between Europe and Asia meets the interests of all countries of the Eurasian continent and meets the main priorities of Kazakhstan, as the main transport corridors linking Europe and Asia pass through the territory of our country. According to the Kazakhstan–2050 Strategy our country shall become the largest business transit hubs in Central Asia; the volume of transit traffic in 2020 should increase by two times. Herewith, in the recently adopted plan of the Head of State on the implementation of five institutional reforms, special place is given to development of the transport corridor through Kazakhstan from Khorgos to the port of Aktau, 1

All the Turkic speaking space.

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further through the Caspian Sea to Azerbaijan and then through Georgia and Turkey to EU markets. Already today, active measures for the development of the Trans-Kazakhstan route have developed. On east of the country in the framework of SEZ “Khorgos – Eastern Gate” work on creation of a transport and logistics hub, which includes a dry port and mainline networks of logistics are performed. A new Zhezkazgan-Beineu railway shortened transit distance to 1200 km from the station Dostyk and Altynkol to the seaport of Aktau. Currently performed active work on the port infrastructure development. Alongside, construction of three dry cargo terminals as part of the project to expand the port of Aktau in the northern direction is under completion. With commissioning of these terminals, it is expected to increase the design capacity of the port to 3 million tons and create additional opportunities for the treatment of promising growing traffic. To date, the port of Aktau is a major hub that provides cargo transportation in the direction of the Caspian ports of Russia, Azerbaijan, and Iran. The railway line Uzen-Bereket-Gorgan opened a direct route North–South Corridor, connecting Russia, Kazakhstan, Turkmenistan, and Iran with access to the Gulf countries, which reduces the distance of 500 km and significantly reduces transportation costs. Implementation of the project “Western Europe-Western China” will provide transportation in three main areas of China- Kazakhstan, China-Central Asia, China-Kazakhstan-Russia-Western Europe. Completion of the project is expected in 2016. The corridor is the shortest road route from China to Europe, with the term of cargo transportation for 10–12 days. This land route is 3.5 times shorter than the traditional sea route through the Suez Canal. Work on the formation of the external terminal network performed in order to promote the agent network of transport and logistics services sales, as well as promotion of Kazakhstani goods in foreign markets. So, now the joint logistics terminal in the Chinese port of Lianyungang works as a point of consolidation of cargo flows to and from Kazakhstan, and key transit port for transshipment to and from the countries of Southeast Asia. In general, the implementation of these projects will bring the capacity of seaports to 25 million tons. With perspective view of the increasing cargo traffic, active work is carried out to build its own merchant fleet, planned to acquire additional dry cargo vessels and ferries. Last year, the national shipping company first began operations with two dry cargo ships. By 2020 it is planned to increase the number of merchant ships to 20 units and 4 ferries. The volume of investments amount to 80.6 billion tons. Increase of the route effectiveness is possible in the technological link to other international projects such as the construction of the new port of Alyat, the completion of the railway line Baku-Tbilisi-Kars. The successful implementation of these projects will attract potential freight traffic, as well as open a direct transit route for Kazakhstan export goods and cargos. Besides infrastructure projects, a series of institutional measures aimed at improving the quality of transport services, security of transport processes and the creation of a unified legal framework for international shipments performed. In particular, as is well known, automation of production processes, which will reduce the time

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for processing cargo and ships by one third completed in the port of Aktau. In this context, it would be appropriate to note that in order to expand and strengthen contacts between the transport authorities of the countries of the Caspian region, the Kazakhstan side holds a number of major events. In particular, on May 21, 2015, for the first time under the auspices of the International Turkic Academy (ITA), one section of the annual Astana forum was devoted to discussion of topical issues of the Caspian transit corridor. In particular, ITA held the section “Caspian transit corridor: infrastructure development and economic co-operation” in the 8th Astana Economic Forum. Representatives of international organizations, state bodies members of the CCTS, railway companies, etc., actively participated in discussion if the section’s topic. Thus, as you can see the many transport strands between the regions of Asia and Europe gradually expanded and modified. It should be specially noted that in the diversification of routes connecting the countries, cities and regions, a greater role played by such important initiatives as the “Silk Road Economic Belt”, “NurlyZhol”, “TRACECA”, “Western Europe-Western China” and many others. And the activities of a number of organizations contribute to the rapid establishment of contacts between interested agencies of different countries to expand and deepen cooperation. One of these organizations is the International Turkic Academy. ITA activities are not only aimed at deepening cooperation within the Turkic-speaking countries, but also aims to establish and strengthen multilateral friendly and partner relations with key neighboring countries, primarily with Russia, China, Mongolia, and others. Thus, Kazakhstan and other Central Asian countries, historically occupies a strategic place in the distribution of all routes of the ancient Silk Road, today as it was then, ready to connect the two most important parts of the Eurasian continent, Europe and Asia. We must recognize that in the modern world the role of the West (Western countries, the states of the Eurozone) remains the most important in shaping the agenda of the Eurasian space. It so happened that the key and the major consumers of raw materials were on the west, and the sources of these resources in the east. With the development of scientific and technological progress, the role of Western countries has much improved, and today, as you know, most of the latest technology made there. It is fair to note that the east or oriental civilization has a huge yet not fully used potential for its development. In this sense, the main task of the Silk Road should be to ensure an intense exchange between civilizations. After all, no one can argue with the fact that the sun, in spite of everything, rises in the east and then only covers the western hemisphere. Based on this, today we see that not only economic, but also cultural rise of Asian powers opens up new opportunities for prosperity and stability in the whole of the Eurasian continent. And in this process, significant place is given to such an ambitious project as revival of the Silk Road civilization.

Chapter 62

Professional Journalistic Education in the Transition to Digitalization: The Experience of Uzbekistan Alisher Metyakubov

Until recently, those who appreciated the possibilities of technology for journalists, were hardly criticized, believing that they underestimate the human factor and are so-called “technicists.” For confirmation it is enough to tell that emergence of each next media is, first of all, the technical invention and the new method of information distribution based on it. In this regard, the digitalization of the processes of collection, processing and dissemination of mass information radically transforms journalism. What is digitalization? “Digitalization”: translation of information into digital form. Digital transmission of informational data encoded in discrete signal pulses, method, which is widely used in many of the latest electronic communication systems (Zemlyanova, 2004:104). Uzbekistan began to master digital technologies almost simultaneously with Russia and China. While these two major countries switched to the Internet in 1994, Uzbekistan did so in May 1996. It was at this time that the Information center of the President’s office connected the country’s media to the Internet with the help of the national provider UzPAK, created with the assistance of the Russian telecommunications campaign “Sovam-teleport.” The advantages of new technologies were initially quite obvious. First, there is a very high speed of spreading of signals carrying information: 300,000 km per second. For comparison, we can note that the Internet signal could turn around the globe for only one second. Secondly, it was possible to transmit, receive and store huge amounts of information, because we are talking about electrons that do not occupy a physical place and do not “weigh” anything at all. Thirdly, there is the ease of use of new recording and transmitting digital technology, when it can be successfully used by anyone. We can recall that until recently, each mobile television station (MTS) was served by about ten people, in addition, it was also necessary to transmit a TV station in the form of a specially adapted car, etc. A. Metyakubov (B) University of Journalism and Mass Communication of Uzbekistan, Tashkent, Uzbekistan e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_62

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However, the main thing, in our opinion, is that the new technology partially helps to solve the age-old problem in Uzbekistan: the issue of censorship. It is known that censorship in the Republic was officially closed in 2002, when the decree of the first President of the country Islam Karimov abolished the administrative structure for the protection of state secrets in the press. Instead, the Committee of Press and Information established the Department of monitoring media appearances, where staff controlled the line published by the national media adopted in Uzbekistan law. Editors were often sent letters about violations, which forced them to develop selfcensorship. Therefore, the topic of censorship and self-censorship for many years has been and still remains one of the most acute in the country. And to solve it to some extent it helps digitalization, which contributes to the resolution of three important issues in this area. First, digital technologies are dramatically expanding the range of sources of information, which objectively makes it difficult to control them. We are not talking about the trend that has been observed in Uzbekistan since the first years of independence, i.e., since the early 90s of the last century. Its essence lies in the fact that to the former “classic” publications such as “Pravda Vostoka”, “NarodnoeSlovo”, “XalqSo’zi”, “Uzbekistan Ovozi” and others added a lot of mass, recreational publications, programs, and sites. More specifically, we are referring to a large number of official and unofficial sites that flood the virtual information space of the national domain. A lot of recognized and little-known bloggers appeared; it is not possible to control their performances. As a result, today Uzbekistan has a chance to get all sorts of information from everywhere, which forces the official media to change their tone and content if they do not want to lose their audience completely. That is, modern media create such conditions that old, traditional newspapers and magazines, radio and television are forced to move to the new century, and not live in the comfort of the old. Second, and equally important, professional standards for the dissemination of information require that the news reach the consumer within minutes of the event. This excludes the very possibility of previewing the information and agreeing on whether or not to post a message, i.e., what constitutes the essence of censorship (preliminary inspection of information by officials before its publication). Thus, the new technology and the need for rapid transmission of information has created completely different parameters for journalists and amateurs in the field of information dissemination. These conditions have nothing to do with any individuals; it all depends on modern journalism. Third, the sharply increased number of authors, providing materials in the virtual and traditional media. The question of whether bloggers and other amateurs who do not have a professional journalistic education are journalists today raises serious disputes among specialists. It is known that on a planetary scale the world is divided in this issue into two camps, which can be called countries with Western and Eastern approaches. A. A Kalmykov writes about the first approach: “the debate about Internet journalists began, probably, with the creation of the first site. But, as you know, it is not completed until now. Although the other day we learned that America has finally

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solved this issue. Here’s the thing. The Supreme Court of the State of New York adopted a case law: it recognized all Internet sites, regardless of their content and professional level of the media. From now on, in the eyes of American justice, any author published on the Internet is considered a journalist and has the right to receive and disseminate information in the same way as employees of professional media do. Many experts consider this decision revolutionary—it radically changes the view of journalism in the context of globalization” (2: 113–114). It would be logical to assume that the leading European countries will follow their overseas leader in this matter. There is also the opposite approach, which is followed by some Eastern countries. In China, for example, in order to obtain the status of a journalist of traditional or virtual media, it is necessary to work in the state in the media or to be registered in a state body. Therefore, although Chinese bloggers working in the network are a dime a dozen, at the official level, they are not considered journalists. We can say without risking making a mistake that this ambivalent attitude towards bloggers is one of the most difficult issues of today’s information age. Uzbekistan adheres to the Chinese position on this issue, for the official recognition as a blogger, it is also necessary to register here. Let’s move on to journalism education. Since 1949, when the Department of journalism was opened at the Central Asian State University (now the National University of Uzbekistan named after Mirzo Ulugbek), our Republic, together with the faculty of journalism of the Kazakh National University set the tone in the training of professional journalists in the region. From the Central Asian State University spun off all higher education institutions of today’s Central Asia without exception. In the years of the Soviet Union, training was conducted under the programs of Moscow University, the journalists themselves were referred to as party, and their main task was the ideological support of the construction of communism in the Soviet Union. The collapse of the USSR coincided with several fundamentally important events. First, all the republics of the former country fell into economic and political collapse when numerous economic ties were severed at once and everyone began to survive as they could. Second, the national currency was sharply devalued, which led to a marked impoverishment of the masses. Thirdly, by this time the developed part of the planet has mostly entered the information age, so the countries of the former power also had to join the Internet and explore a new, hitherto unknown technological world. The following can be said about the digitalization of media in Uzbekistan from the point of view of journalistic education. Several stages could be distinguished. In our view, it includes one preliminary and four main stages. Preliminary stage. This includes the last years of the Soviet period and the first years of independence. This is before the Internet period, when journalists already knew about the Internet and its reserves but did not have the opportunity to use them. Stage 1, 1996–1997. There was a mass media connection in Uzbekistan. At this time, or rather in 1996–1997, in the curriculum of the faculty of journalism of the Tashkent University (since 1999 and the new faculty of international journalism of the

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Uzbek State University of World Languages) for the first time introduced disciplines related to the Internet. Stage 2, 1997–2002. A legislative framework for the functioning of the media in Uzbekistan has been created, and several laws related to the media have been adopted. But despite the existence of laws, in fact, freedom of speech in these years in Uzbekistan was significantly limited. Stage 3. 2002–2016 years of Journalistic technology is developing at a rapid pace. There is a massive mastery of the national media methods of digitalization, digitalization is actively introduced into the activities of editors and becomes an important method of further technical development of print, radio, and television journalism, as well as online publications. Stage 4, from 2016 to the present. Rapid further development of digitalization. The opening of the University of Journalism and Mass Communications of Uzbekistan in Tashkent in 2018, when digitalization became one of the main directions of the functioning of the new University, played an important role. Suffice it to say that the very first faculty of the new University is called the Internet and social networks, and the curriculum includes a number of subjects that directly implement digitalization. Below we will talk about them. Journalistic education in Uzbekistan in 1991–1995 tried to combine the previous criteria of training with new ones, taken from the practice of universities abroad. Thus, one of the main innovations was the introduction of the principles of news and commenting journalism, investigative journalism, media management, and media marketing into journalistic education. As for digitalization, it began to develop rapidly with the introduction of the Internet not only in the practice of the media of the Republic, but also in the educational process, as well as in the theory of media. It is necessary to pay tribute to the leadership of the Republic of time. It did not prevent the development of the Internet in the country, although a number of other areas for the development of freedom technologies remained banned. A more practical and fruitful approach was to lead the process. An international Department was created in the Information center of the presidential Administration, which fulfilled this task. The assimilation of the principles of work of national media with the world of the Internet occurred in May 1996, when the editors and journalists of Uzbekistan with the filing and with the help of seminars of the international Department of the Information center quickly mastered the basics of digitalization. Therefore, the newspapers of Uzbekistan for April 1996 are strikingly different from the same newspapers for June of the same year, when the editorial offices began to massively apply in their practice the methods of the Internet and use its materials. What does journalism education consist of? From the traditional educational disciplines, including the humanities and professional disciplines. The first and second groups of subjects are being digitized today; without it further steps forward are impossible. Let us consider the example of a new university established more than a year ago in Uzbekistan. We believe that the process of digitalization of journalistic education should be divided into two levels: general and sectoral. Overall, there will be digitalization in general: mastering the skills of the Internet, equipping editors with modern

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digital equipment, effective use of modern audio and video equipment in journalistic practice, etc. Industry digitalization can be called the provision of digital technology and appropriate methods of work of certain areas and areas of journalistic activity. Here are the main benefits of digitalization in the education of the future journalist: . creation of new technical and creative environment in the editorial offices . development of new high-speed thinking skills, which is very important for a journalist, if not the most necessary . the practice of rapid work with the media . ability to quickly find and collect the necessary and relevant information . to process and differentiate the necessary thematic information . group mass information on the necessary topics, problems, blocks . work with your audience specifically and purposefully. Digitalization is also changing the fundamental humanitarian and creative attitudes of journalists. The main transformations are: . a sharp increase in the place, role and importance of information technologies in daily journalistic activities . development of new values of the profession, due to the modern technical and creative environment . point rapprochement with the audience, the definition of their groups with which the journalist intends to work in the future . transition from simple information transfer to service type information . development of a new language of communication, due to the new semantic and thematic groups of words . development of a new network and digital ethics of the journalistic profession . the need to quickly address the ever-evolving digital divide . the need to be able to work equally effectively: (a) (b) (c) (d) (e)

in different speed modes with different kinds of media at the same time to know English, the importance of which is constantly growing be able to work with information retrieval systems be able to work with advertising, etc.

We believe that the journalism of our country was able to make a decisive step forward in comparison with the media of other neighboring countries, due to the fact that by the Decree of the President of the Republic of Uzbekistan dated May 24, 2018, the University of Journalism and Mass Communications was opened in the Republic, the first specialized higher education institution in the CIS. In the starting, 2018–2019 academic year, the University operated undergraduate areas such as Internet journalism, print media, media marketing and advertising, media design, television and radio journalism, international journalism, sports journalism, information services and public relations.

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There were nine specialties of the magistracy: print media, political and legal journalism, Internet journalism, publishing and editing, information technology services, television and radio broadcasting, media management, higher courses of journalism. The latter accepted bachelors who graduated from universities in other than journalism, specialties. So, the Republic is trying to solve the issue of training industry journalists in various areas of the economy. Almost all areas of undergraduate and graduate specialties have quite modern subjects directly related to digitalization. Thus, future specialists in the field of print media are studying the basics of creation, as well as the design of Internet versions of printed publications. TV and radio journalists get acquainted with the basics of video graphics. Internet users learn network technologies of virtual space, the same video graphics, and blogosphere with social networks. Bachelors in Media Design pay special attention to work with digital photos, audio, and video materials. Future masters of all specialties study the mechanisms of work with open and closed sources, visualization in journalism, data journalism, etc. This year the University opened the direction of military journalism. It is impossible to call digitalization a lot of only Internet journalism or modern publishing systems. It would be better to consider it as a universal method of preparation of experts in all professional fields and professions. When journalists turned to the Internet en masse in the early 1990s, they were not divided into print, television and radio, or public relations, but everyone was interested in the new network and its limitless possibilities. Specialists were interested in the great prospects of the global network, the activities of which were based on digital technologies. The University of journalism and mass communications provides for the study and development of skills with digital technology future specialists in many areas. From this point of view, we describe a number of subjects of the new University in terms of digitalization of the acquired profession. The curriculum of bachelor’s and master’s programs provides for the study of digital technology in the following areas: . . . . . . . . . . . . . . .

Web design basics Multimedia journalism Basics of digital photography Robot journalism Mobile journalism Practice telescience and digital installation Basics of video graphics The latest technology of training talk show Infographics and visualization of publications Media design software Theory and practice of new media Digital technologies in media management Modern media formats Traditional and digital PR technologies Multimedia on the Internet.

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The question may arise: the ideas are very serious, but will the staff of the new university cope with the tasks? Of course, it will not be easy. But the staff of our university is young, seriously working on the education of students and self-education. However, it was erroneous to believe that the successful development of the digitalization of current and future journalists of Uzbekistan will help some new, special items. Universal lock picks are not here. There is a strong rule that all journalists in Uzbekistan must strictly adhere to: the continuously growing level of requirements for the accelerated development of new technology for the transfer of processing and dissemination of information. Who had time, he would be on horseback. You lost who have left in the day. There is no other solution to the problem. even non-professionals can use mobile phones, SMS, and telegrams. We can say that the opening of the new University will contribute to the development of future journalists’ genetic predisposition to modern digital technology in many areas of journalism at the same time. It is possible that other CIS countries will follow the path of creating specialized universities to work with mass information. There is no alternative to the information age, and the new century requires training not journalists in general, but specialists who are able to work professionally in the above areas. The ways of digitalization are multiple and inscrutable. A well-known theorist of the network society Manuel Castells writes about one of them: “New technologies also favor the development of the social space of virtual reality, which combines openness and experimentation with role-playing games. The most successful of them is SecondLife, which in February 2008 had 12.3 million registered participants and about 50 thousand visitors at any time of the average day... And this virtual space has such communication capabilities that some universities have even created their campuses in SecondLife, where experiments are conducted to use it as an educational platform...” (3:116).

Suggested Reading 1. Zemlyanova L. M., Communication Studies and Information Media: English-Russian Dictionary of Concepts and Terms, – M.: Izd-voMosk. UN-TA, 2004. 2. Kalmykov A. A., Internet Journalism, Uch. POS. – M.: UNITY-DANA, 2005. 3. Castels M., The Power of Communication, Uch. POS. 2nd ed., DOP. – M.: Ed. house of Higher school of Economics, 2017.

Chapter 63

Mankind Sharing the Future in Community: The Case for Open and Practical Civilizational Dialogue Oh Ei Sun

On May 15, 2019, Chinese President Xi Jinping declared that “we should have greater confidence in our civilizations” in his keynote speech at the opening ceremony of the Conference on Dialogue of Asian Civilizations. This sentence impressed me, who was present at the conference when President Xi made these remarks. With historical context in mind, our civilizations should have our respective confidence. Every civilization is an inseparable piece of human civilization, so Asia’s various cultures should have their own confidence, which should be conveyed through their people. We should improve friendship and exchange between peoples of different countries, and on that basis build a community of common interests and shared future. The pursuit of a better life remains a common aspiration for all mankind. What then is civilization? Civilization is the accumulated achievements in the process of people moving from the wilderness to settlement and progress and development, all of which can be exchanged and drawn from along the way. Dialogues between civilizations are crucial because they could reduce unnecessary, often artificial, tensions that tend to tear mankind apart. But abstract dialogues would typically be limited to a small group of selected elites from the civilizations concerned and may thus be of little influence. Such dialogues should instead be open and practical in nature, with maximum participations from all stakeholders, such that they could indeed be instrumental in furthering a shared community of mankind. I have several suggestions in this regard. The first is about tourism, which was also mentioned by President Xi. I think too many Asians travel to countries outside Asia while numerous great destinations on their own continent are neglected—I do the same thing myself. There are a lot of things that we can do to improve this situation. For example, we can build convenient railway and highway networks between different countries in Asia. At the same time, we can launch direct flights between O. E. Sun (B) Singapore Institute of International Affairs, Singapore, Singapore e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_63

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Asia’s major cities. My homeland is Sabah, Malaysia, which is now connected to a dozen major cities in China through direct flights. So now tourists visiting Sabah are mostly Chinese. Tourists from coastal cities can reach Sabah by cruise ships departing Xiamen in China’s Fujian Province. When people have the chance to travel outside of the narrow confines of their daily lives, they would per force have to learn and become accustomed to the cultures of their travel destinations. They would also have to interact with the local populations. Even the local cuisine that they partake of would often be eye openers. In doing so, hopefully people would learn to appreciate the vibrance and variety of cultures that are thriving around the world. It also lays out a basis for the understanding that is crucial for dialogues between civilizations. In addition, civilizations and their dialogues should be sustainable. China saw the second Belt and Road summit concluded earlier this year in Beijing, perhaps with results out of the expectations of many observers. The Belt and Road Initiative, or BRI, was first proposed by President Xi Jinping of China six years ago in Kazakhstan with the conceptualization of a Silk Road Economic Belt aiming to spark development along the ancient continental Silk Road. The next year, when visiting Indonesia, President Xi introduced the “seafaring” version of the initiative, the 21st Century New Maritime Silk Road, tracing the ancient sea routes that have witnessed trading and exchanges between the East and the West. Well, over the past half a decade, as the BRI gradually came into full force, the regions along the Belt and Road have experienced tremendous, sometimes fundamental developmental transformation. Among the five BRI principles is the principle of policy coordination, which saw China signing up memorandum of cooperation or strategic partnerships not only among its immediate neighbors, stretching as far as Italy and Switzerland in Europe. In line with the principle of facility connectivity, many infrastructural projects with Chinese involvement have been sprouting all along the Belt and Road, linking China by sea, air, land and also online with its neighbors near and far, and connecting them with one another as well in a vast network of modern infrastructures. From the Chinese perspective, linking up vast, previously unconnected regions with state-of-the-art infrastructure was perhaps a well-intentioned move, based on China’s own hugely successful developmental experience. In China itself, there is this saying of first building roads then prosperity will come along. Indeed, the many highspeed rail lines and highways linking cities big and small in China, for example, have spurred hitherto unseen growth almost wherever they reach. The more entrepreneurial Chinese citizens, and there are many of them, would make use of the reach of these advanced infrastructures to develop previously remote regions in order to better their own livelihoods and the community in the process. Seeing the somewhat dated infrastructures of its many developing neighbors, China was perhaps quite anxious in trying to assist them to improve their physical linkages, not the least with China, so that some other BRI principles, such as trade facilitation, capital fluidity and ultimately people-to-people bonds could be laid out more efficiently. And that was perhaps the main theme of the first BRI summit two years ago, summing up some of the mainly infrastructural projects that have been carried out and announcing new ones, with financial packages in the forms of funds

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and loans to back up. Many of the regions along the BRI do need such infrastructural upgrades in order to unleash their developmental potentials which have thus far been Limited by a lack of basic amenities, such as access to electricity and yes, roads. But merely two years later, both the global socioeconomic and geopolitical scenes have shifted somewhat. On the one hand, although socioeconomically new wealth has been created not least along the BRI even in the continuing worldwide economic downturn, it has often not been fairly and effectively spread across all socioeconomic strata in many regions. And the sustainability of such wealth creation is then called into questions. On the other hand, geopolitically the United States which remains the world’s largest economy has increasingly and unabashedly practiced isolationism, ditching the concept and practice of free trade which it first advocated for the longest period after the Second World War, in favor of rabid protectionism disguised as “America First,” setting up frankly quite negative example for the rise of openly protectionist measures around the world. It is one thing to put up non-tariff barriers to deter entry into a national market by foreign business participants; it is quite another thing to bluntly raise tariffs. The former moves send shivers down the spine of multinational corporations; the latter moves would create systemic ripple effects on the world economy. And the second BRI summit was unveiled against these somewhat convoluted backdrop. There was a distinct shift in the summit’s thematic emphasis from “hardware” construction in the past to perhaps what can be called “software” promotion at present. President Xi in his speech stressed the importance of high-quality development that is open, clean, and green for BRI programs. This renewed emphasis on refining the BRI projects is anticipated to be more welcome across the BRI regions, as openness would mean increased participation by all stakeholders, both local and foreign, and hopefully from all strata in the affected community, in the implementation of the BRI projects. The “cleanliness” here refers to joint efforts in combating corruption and abuses which have plagued many developing countries, not the least some along the BRI. But most importantly, the BRI projects should be “green,” namely they should be environmentally invasive only minimally, with optimal usage of renewable energy and sustainable resources. Many countries are starting essentially from scratch in their developmental stage, and they must start correctly, in tune with the aspirations of their people and the preservation of their precious environment. There is no doubt that the BRI regions need capital injection, but it must be done in a clean and sustainable manner, with the bulk of the investment going toward uplifting the livelihood of the local people and conserving their natural environment. Key points in President Xi’s BRI Summit speech echoed both the yearnings among many BRI countries for “two-way traffic” in BRI dealings as well as continued practice of free trade. These include the announcement of further measure in deepening and broadening China’s reform and opening-up process, with China’s huge domestic markets pledging to procure even more foreign goods. This is of course in stark contrast to some other countries’ frequent threats of tariff hikes to deter foreign goods from entering their markets.

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There was also a subtle, renewed emphasis on further building up of people- topeople bonds in the BRI summit. And that, ultimately, would perhaps the ultimate achievement of the BRI, so that a community of shared destiny and thus peace and prosperity would come to fruition, and a sustainable one at that. The third suggestion is about education. For example, people in many Englishspeaking countries learn German or French, and the resources to do so have been plentiful for centuries. But in Malaysia, it is still very difficult for us to learn the Thai language. There is almost a complete lack of Thai language majors in Malaysian universities. I think people from different Asian countries should learn more about each other’s languages. Universities in Asian countries can organize winter camps or summer camps to facilitate exchange between schools on foreign languages. I think it is very important to learn each other’s languages. Many Chinese students come to Malaysia, and Malaysian students in Beijing are always on my mind. I think they can become envoys for cultural exchange to improve this relationship in the years to come. Xiamen University is quite famous in Malaysia and has even established a branch school in the country. I hope more well-known universities in Asian countries come to Malaysia to conduct exchange, which will facilitate reciprocal learning. And my fourth suggestion is a radical one. I think UNESCO’s World Heritage Committee should prioritize heritage protection requests jointly submitted by multiple countries. For example, hawker food was jointly proposed by Malaysia and Singapore. We hope the proposal makes the cut. By essentially encouraging countries to focus on their shared heritage, it is hoped that civilizational dialogue could germinate in the process of cultural cooperation. Solid, open, and practical proposals for dialogues between civilizations should be favored as nations go about with their developmental paths. Tourism, the environment, and education are three areas where commonalities and cooperation could be found and promoted. When countries see the inevitable common features in their respective cultures and civilizations, they will make baby steps toward a community of shared future for mankind.

Chapter 64

Cultural Pluralism in Asian Buddhism for Peace and Harmony Wimal Hewamanage

64.1 Introduction Buddhism is a religion that arose in India and spread throughout Asia first and later the entire planet. It is a golden chain that tied Asia with its pluralistic nature of cultural aspects. Culture consists of four major pillars: symbols, languages, values, and norms. To enrich Asian culture Buddhism provided a noticeable contribution from history to date while connecting indigenous beliefs and practices. Buddhism represents both religion and philosophy. Though its philosophical teachings on no-soul (anatta), dependent co-origination (paticca-samuppada), three signata (tilakkhana) etc. are most probably grave, its religious aspects are more flexible. Religious diversity can be identified in both inter-religious and intra-religious activities. This paper reveals pluralistic aspects of Buddhism by focusing on four major pillars of culture using qualitative data associated with three Buddhist traditions: Theravada in South and South-East Asia, Mahayana in East Asia, and Vajrayana in Central Asia. Asian Buddhism is very rich with its diversity of symbols, languages, values, and norms, and it plays a role of beauty through variety. Awareness of the above matter would be more helpful for the development of peace and harmony in Asia within and beyond its borders.

W. Hewamanage (B) Pali & Buddhist Studies, Department of Buddhist Studies, University of Colombo, Colombo, Sri Lanka e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_64

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64.2 Pluralism and Buddhist Teachings In brief, pluralism is the notion of religious diversity and it is the view opposite to fundamentalism. Race (1983) states three positions related to this discussion, namely exclusivist, inclusivist, and pluralist. Exclusivist positions maintain only one set of belief claims or practices, which ultimately is considered true or correct. Pluralism proposes more than one set of beliefs or practices that can be partially or perhaps wholly and simultaneously true. Inclusivism indicates a middle position between exclusivism and pluralism. It recognizes more than one tradition that can be true and at the same time, one tradition expresses ultimate religious truth most completely. Further, Clyde V. Kiser states, “In a broad or literal sense, ‘cultural pluralism’ might mean any type of cultural diversity within a given area, and might be applied to classification by race, ethnic group, religion, rural–urban status, occupation, income, or general level of living” (1949, 117). The Buddhist concept of cultural pluralism is more associated with the idea that people can partially or fully express true beliefs and practices at the same time. As a principle, Buddhism refutes the notion, “this alone is true, all else is false” (idamevasaccam . moghamaññam . , Chalmers 1977a, 170), which can appear with the involvement of one’s own view or ideology (sanditthikar¯aga) and tenaciously grasping views (dit..thipar¯am¯asa). One who tenaciously clings to their respective religio-philosophical theories argues that this alone is true (ye kecime dit..thiparibbas¯an¯a—idameva saccanti viv¯adayanti. Anderson and Smith 1997, 174). Where there is pluralism, there cannot be fundamentalism. Where there is fundamentalism, there is no room for pluralism (Karunadasa 2013, 161). The Buddhist notion concerning separate truths (paccekasacca) explores the significance of limited knowledge without mere refutation. There were ascetics who had wrong views; the world is eternal, the world is not eternal, the world is finite etc., and they believed that this alone is true all else is false. Because of these wrong views, ascetics lived contending, quarreling, disputing, and attacking each other with sharp tongues (bhan.d.anaj¯at¯a kalahaj¯at¯a viv¯ad¯apann¯a aññamaññam . mukhasatt¯ıhi vitudant¯a viharanti). Consequently, the Buddha neither refuted nor completely accepted their interpretations. The Buddha pointed out the reason for their debate is that they do not know Dhamma and good (Steinhal, 1982, 67, 68), by using the parable about blind men exploring and trying to describe an elephant only to touch and feel the partial truth. While addressing Kalamas living in Kesaputta city, the Buddha expressed what they do not accept while highlighting eleven points; do not go upon what has been acquired by repeated hearing; nor upon tradition; nor upon rumor; nor upon what is in a scripture; nor upon surmise; nor upon an axiom; nor upon specious reasoning; nor upon a bias toward a notion that has been pondered over; nor upon another’s seeming ability; nor upon the consideration, ‘the monk is our teacher’. This discourse explores the necessity of a pluralistic approach to deciding what is good and bad (Bodhi 2012, 280). Hence, it states that Buddhism does not essentially stand with fundamentalism, which damages peace and harmony, opposing pluralism. Since,

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theoretically, Buddhism admires religious diversity to bring its practical background to awareness, the discussion flows under four major sub-themes: symbols, languages, values, and norms, focusing on Asian Buddhism.

64.3 Pluralism of Symbols in Asian Buddhism As mentioned at the beginning, Buddhism represents three foremost traditions: Theravada in South Asia and Southeast Asia, Mahayana in East Asia and Vajrayana in Central Asia. All of them utilize a variety of symbols to propagate the mission of the Buddha, but those are not a hindrance for leaders and followers to work together. Some symbols are shared by all three traditions, with some particular minor differences. Some of them completely differ from others. The wheel of Dhamma (dharmacakra) and Buddha image are examples of the former, and bell and vajra are of the latter. Dharmacakra commonly embodies the teachings of the Buddha, and precisely eight spokes represent the Noble Eightfold Path and Four Noble Truths. Emperor Asoka’s wheel, depicted in a number of edicts with twenty-four spokes, is also known as dharmacakra, which is present in the Indian national flag. The Buddha’s first sermon is also Dhammacakkappavattana, and Buddhists’ notion of an ideal king is also known as the universal monarch or wheel turner, cakkavatti. Simultaneously, it represents the process of birth and death, sams¯ ˙ ara in Pali. The concept of a prayer wheel in the Vajrayana tradition is a manifestation of “turning the wheel of the Dhamma.” Outside of this cylindrical wheel, made from metal, wood, etc., can also be found with the well-known mantra om manipadme hum written on it. Hence, Dharmacakra is one of the most widespread symbols of Buddhism, which is used throughout the entire Buddhist traditions. The Buddha image stands as a well-known symbol of Buddhism used in all traditions to date, and it was produced after five hundred years of the Buddha’s parinirv¯ana, the first century BCE. The history of the Buddha image proves that there are two major traditions, viz., Gandhara and Mathura, with the influence of Greek and indigenous art. Though these images considerably differed from one another, both traditions were popular in the Buddhist world, particularly in the Indian subcontinent. For Buddhism in Sri Lanka, it was not very difficult to maintain Buddha images similar to the Indian tradition. Later on, Buddhism spread beyond the Indian subcontinent and Buddha images were created according to their culture. As historically accepted, the Buddha is an Indian man who was born in the area known as Nepal at the time. Buddhism spread in East Asian countries, first in China, where Buddhism was a foreign religion. For the time being, they created Chinese Buddha images with the features of a Chinese man. The image of Avalokite´svara Bodhisattva, 观 音(Gu¯any¯ın) in Chinese, was also created with Chinese characteristics and eventually was depicted with feminine features in China. Gu¯any¯ın images with female features are very popular among Chinese Buddhists at present. The association of Buddhist images with Chinese features was a supportive factor in conveying Buddhism as a

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part of Chinese culture. Most Buddha images available in Sri Lanka probably represent Indian features, but Southeast Asian Buddha images have also merged with their own features. Hence, Buddha images open the gate for cultural pluralism through Buddhist art. Pagoda, st¯upa, and tˇa are three terms which are used in English, Sanskrit and Chinese, respectively, for commemorative monuments. It is associated with Buddhist temple compounds and is usually erected over the remains or relics of a holy man. Sanci and Amaravati-st¯upas are well-known examples of Indian architecture and later they spread to other countries as well. Sanci-st¯upa utilized simple hemispherical brick structure built over the relics of Buddha by emperor Ashoka in the second century BCE. Chinese pagodas called X¯umítˇa or Sumeru Pagoda in the Kaiyuan Monastery, Hebei province, China and the One Pillar Pagoda, formally known as Diên Hu.,utu., -long lasting happiness and good luck in Hanoi, Vietnam are good examples of East Asian structures. X¯umítˇa is a square-base stone and brick structure, built in the seventh century CE with a height of forty-eight meters (157 feet) and it has tiers of eaves and a crowning dome. The interior of the pagoda is hollow but has no staircase to reach the higher floors.

64.4 Languages in Asian Buddhism Basically, language is a convention or agreement (sammuti) that is utilized as a tool of communication. Even though the ultimate nibb¯ana is not a result of a mere understanding of language, it is a supportive factor. The essence of the Discourse on the Analysis of Non-conflict (Aran.avibhamga-sutta) ˙ states that one should not grasp on to the way of the etymology of the country and not overstretch commonality. It states seven dialectical variations in Indian languages of his day to refer to “bowl,” namely, p¯ati, patta, vittha, sar¯ava, dh¯aropa, pona, pisila (Chalmers 1977b, 230– 237; Kalupahana 1999, 48–50). The concept of “own dialect” (sak¯ayanirutti) also highlights language freedom in Buddhism. Though two young monks asked Buddha to convert the teachings of the Buddha into Sanskrit (chandaso a¯ ropema), the Blessed One refuted their request and advised them to allow their own dialect (Oldenberg 1995, 139; Takakusu & Nagai 1966, 1214). Explanation sak¯ayaniruttiy¯a as Magadha language in the Vinaya commentary does not outfit with its context and it indicates the later interpreted version of the concept. Hence, the Buddhist notion of language clearly represents language pluralism. The history of Buddhism proves that the very first Theravadins preferred to use the Pali language while Mahayanists used Sanskrit in India and outside its borders. Canon, Commentaries, sub-commentaries, and rest of the treatises were written in both Pali and Sanskrit. After spreading within its primary borders, Buddhism mingled with the cultures of the host countries. Since language is a primary component of culture, Buddhism is allied with indigenous languages. Consequently, there occurred four canonical traditions, namely, Pali, Chinese, Tibetan, and Mongolian. Thereafter, they utilized their languages for the daily practice of Buddhism. Therefore, languages

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such as Chinese, Japanese, Korean, Mongolian, Vietnam, Tibetan, Sinhalese, Nepali, Thai, Burmese were part of Buddhism where Buddhism spread. As a practice, Theravada Buddhists still prefer to use Pali during religious activities, though followers sometimes do not understand the meaning of the verses and prose passages. In a Theravada context, for example, a monk requests in his own language to recite namask¯ara to take the Three Refuges and observe the five precepts, but just after that followers recite them in Pali language as “namo tassa bhagavato arahato samm¯a sambuddhassa”—I pay homage to him to the exalted one, to the worthy one, and to the fully enlightened one. Then, the monk recites the three refuges and finally the five precepts one by one in the Pali language, while devotees recite after him. Homage to the Triple Gem is also used from Pali prose passages which are quoted from the Canon. The rest of the occasions are also highly utilized in the Pali language and it makes events powerful. Homage to the Triple Gem goes as follows: Itipi so bhagav¯a araham ˙ samm¯asambuddho vijj¯acaran.asampanno sugato lokavid¯u anuttaro purisadammas¯arathi satth¯a devamanuss¯anam ˙ buddho bhagav¯a’ti. Sv¯akkh¯ato bhagavat¯a dhammo sandit.t.hiko ak¯aliko ehipassiko opanayiko paccattam ˙ veditabbo viññ¯uh¯ı’ti. suppat.ipanno bhagavato s¯avakasa˙ngho, ujuppat.ipanno bhagavato s¯avakasa˙ngho, ñ¯ayappat.ipanno bhagavato s¯avakasa˙ngho, s¯am¯ıcippat.ipanno bhagavato s¯avakasa˙ngho yadidam . catt¯aripurisayug¯ani at.t.hapurisapuggal¯a, esabhagavato s¯avakasa˙ngho a¯ huneyyo p¯ahuneyyo dakkhin.eyyo añjalikaran.¯ıyo anuttaram . puññakkhettam . lokass¯a’ti.

Chinese Buddhists generally utilize the traditional Chinese language for religious activities. This can be observed even in some modern books. Language is in rituals, and ancient books are directly translated by following the phonology of Sanskrit; mah¯apragñ¯ap¯aramit¯a as móh¯eb¯orˇeb¯oluomì and s¯akyamunibuddha as Shìji¯a mó ní fó are two examples. At the end of the morning and evening chants take the Three Refuges 三皈依(s¯angu¯ıy¯ı) as follows. Zìgu¯ıy¯ıfú, d¯angyuànzhòngsh¯eng (自皈依佛, 当愿众生) I take refuge in Buddha, wishing all sentient beings Tˇıjiˇedàdào, f¯awúshàngx¯ın (体解大道, 发无上心) to understand the Great Doctrine and make the superlative resolve. Zìgu¯ıy¯ıfˇa, d¯angyuànzhòngsh¯eng (自皈依法, 当 愿众生), I take refuge in Dharma, wishing all sentient beings Sh¯enrùj¯ıngcáng, zhìhuìrúhˇai (深入经藏, 智慧如海) to penetrate the Sutra Pitaka with wisdom as unfathomable as the ocean Zìgu¯ıy¯ıs¯eng, d¯angyuànzhòngsh¯eng (自皈依僧, 当愿众生), I take refuge in Sangha, wishing all sentient beings Tˇonglˇıdàzhòng, y¯ıqiè wú ài (统理大众, 一切无碍) to harmonize multitudes in general without any obstruction.

The mantra language called zhòuy˘u (咒语) is still most probably recited in Sanskrit in both the traditions of Mahayana and Vajrayana, but occasionally the pronunciation style is a bit different from the Indian style. Om . man.i padme h¯um . (hail to the jewel in the lotus) is the well-known Avalokitesvara mantra, which is used in Chinese and Tibetan Buddhism. Here, om is a sacred syllable, mani means jewel, and padma means lotus flower. H¯um . represents the spirit. An ancient mantra as used in Om t¯ a re tutt¯ a re ture sv¯ a h¯ a is related to Tara, (Dolma . in Tibetan) the “Mother of all Buddhas” is also very popular.

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64.5 Values and Norms Values are abstract thoughts, while norms are external actions. In other words, values represent the collective conception of what a social group thinks is morally right or good. Norms represent standards of behavior maintained by a society. Buddhism identifies ten types of unwholesome actions: killing, stealing and sexual misconduct as physical; lying, gossips, harmful words, and slander as verbal; and covetousness, ill-will and wrong view as mental. Buddhism, fundamentally, agrees with those values and norms in Buddhist society. To understand what is good and bad, there are three ways: psychological investigation, result evaluation, and fact and value components, which are recommended in early Buddhist discourses. The Buddha explored the necessity of psychological awareness with Kalamas, who lived in a city called Kesaputta. Actions full of greed, hatred and delusion are called unwholesome, while actions associated with non-greed, non-hatred, and nondelusion are called wholesome. Refraining from bad and observing good is part of the noble eightfold path, depicted as the way of practicing Buddhism. Volitional acts made by the body, speech, or mind are called kamma. If there is no volition, they will be mere actions (Hardy 1994, 415). Reflecting on (paccavekkhitv¯a) the result of the actions taken bodily, verbally, and mentally is also a recommended way to decide what is good or bad. At this point, the consequences of one’s action are reflected on the side of self, others, and both. One’s bodily actions lead to self-affliction, to the affliction of others, or to both it would be an unskilled bodily action, with painful consequences, painful results. Hence, bodily action should be given up. If action is not leading to self-affliction, to the affliction of others, or to both, it would be a skillful bodily action with pleasant consequences and pleasant results. Hence, that bodily action is fit for you to do. The concept of comparing others with oneself (att¯upan¯ayika-damma-pariy¯aya) is also a path to understanding good and bad. In ethics, it is considered as the “Golden Rule” and it is a maxim in many religions and cultures. The following two verses depicted in the Dhammapada are like a summary of this teaching. All tremble at the rod. All fear death. Comparing others with oneself, one should neither strike nor cause to strike. All tremble at the rod. Life is dear to all. Comparing others with oneself, one should neither strike nor cause to strike. (Narada1993, 123, 124)

Hence, the Buddhist standpoint on values and norms is, fundamentally, based on the abovementioned theoretical facts. There is no so-called universal “Buddhist Dress” for lay followers or even monks and nuns. Theravada monks wear their robes differently than Mahayana and Vajrayana monks. According to the Vinaya-Pitaka, the Buddha asked his chief attendant Ananda to design their robes in the pattern a rice field. This robe, known as the “Triple Robe,” consists of three parts: the uttar¯asa˙nga is the main robe, about a six-by-nine-foot rectangle piece of cloth that can be wrapped to cover both shoulders. But most often, it is wrapped to cover the left shoulder and leave the right shoulder and arm bare. The antar¯av¯asaka is worn under the uttar¯asa˙nga and it is wrapped around the waist like a sarong, covering the body

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from waist to ankle-bone. The sa˙ngh¯a.ti is an extra robe that can be wrapped around the upper body for warmth. Theravada style is the oldest version of this dress, and its wearing style is similar to that of leaders of the Mesopotamian civilization named Gudea, who were popular among Indian priests. The same style was continued by Sri Lankan monks, and the rest of the Theravada Buddhist countries followed the Sri Lankan style with minor changers. Since the weather in Sri Lanka is most likely akin to India it was not difficult to continue the tradition. After the arrival of Buddhism to Far East Asia, the climate and culture in China did not allow them to continue the use of the traditional triple robe. Thus, to provide sufficient warmth, an applicable dress code was prepared, which was similar to the elite dress code of the country. For the Indian continent, furthermore, exposing one shoulder was a sign of respect, but Chinese culture respected covering the whole body, including shoulders and arms. Since self-farming was more appreciated than begging for alms food in Chinese Buddhism, a newly selected robe was more suitable to Chinese culture. Then, it spread to Japan and Korea as well. The outer sleeved robe is often black, brown, or gray. An interesting point here is that though the style was changed, they still utilize upper clothes that are similar to the Indian style while participating in ceremonial activities even today. A Tibetan robe consists of five parts. The dhonka, a wraparound shirt with cap sleeves, is maroon or maroon and yellow with blue piping. The shemdap is a maroon long skirt made with patched cloth and a varying number of pleats. The chogyu resembles an extra robe that covers the upper body and it is something like a sam . gh¯a.ti, a wrap made of patches and worn on the upper body. It is yellow and is worn for certain ceremonies and teachings. The zhen is similar to the chogyu but it is maroon and is for ordinary day-to-day wear. The namjar is a larger silk cloth used for ceremonies, either in gold or bright yellow. It is for formal ceremonial occasions and worn in the uttar¯asa˙nga style, leaving the right arm bare. In this respect, all the traditions agree with the fundamental requirements of using a robe. They did not harm the basic understanding of wearing robes as depicted in utilizing the four requisites in Buddhism. Reflecting on using robes states simply to ward off cold, to ward off heat, to ward off the touch of flies and mosquitoes, simply for the purpose of covering the parts of the body that cause shame. Hence, all styles related to wearing robes have followed its basic requirements, and the diversity of the subject is accepted. There are twenty-nine Vinaya rules out of seventy-five sekhiy¯a depicted in the P¯acittiyap¯ali of the Vinaya Pitaka which are straightforwardly interrelated with food ethics. Some of the rules; not licking one’s hands, not accepting a water vessel with a hand soiled by food are not applicable in the Chinese and many East and South East Asian context. That is because utilizing chopsticks is common for many of them. Using common chopsticks, 公筷(G¯ongkuài) to take a consumer’s portion from main bowls is admired in the monastery tradition in China, but it is not much popular in the lay society. Generally speaking, monks treat food with more respect than laymen, regardless of their zone and tradition, while adhering Buddhist values. The important problem in this discussion is why Buddhism accepts cultural pluralism. Theoretical discussions described in early discourses directly promote

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respecting other cultures and views while refuting the notion, “this alone is true, all else is false.” Buddhist language policy encourages the use of own dialect and views it as a kind of convention or agreement (sammuti) that must be be used for communication. It emphasizes that one should not grasp on to the ways of the etymology of the country and should not overstretch commonality while expressing its necessity for non-conflict. Ethical reading on abstract thoughts called “values” and external actions named “norms” is theoretically expressed. The psychological investigation points out how Buddhism reads human thoughts to decide what is good and bad. Result evaluation basically states the necessity of paying attention to actions. Considering facts and value, the “Golden Rule” in modern interpretation, is also very useful in deciding between good and bad. Buddhism proposes a theoretical basis to accept verities among cultures, intra-religious and inter-religious diversities until they are not harmful to society. Hence, acceptance of cultural diversity in Buddhist practice has formed its theoretical discussions as depicted in early discourses.

64.6 Conclusion As a world religion in the modern world, there is no other accepted culture as the “Buddhist culture” because it is integrated with their own culture. Buddhism was associated with the indigenous culture where it was spread. It was influenced by Taoism, Confucianism, and the rest of the folk religions in China, and the same role was played by Shinto in Japan. After its arrival in Tibet, Buddhism was incorporated into Bon, the indigenous religion of that land. Buddhism in Sri Lanka was modified based on early indigenous culture. Though Buddha was a South Asian by birth, Buddha images can be seen as Chinese and Japanese in East Asia. The Buddha and his disciples utilized their hands for food, but using chopsticks as an eating utensil is very common in East Asia. As mentioned above, there is no common dress code for Buddhist priests in the modern world. Other forms of Buddhist culture, such as paintings, dancing, rituals, and ceremonies, also differ from one another. Since fundamental teachings on culture depicted in early discourses are strongly theoretical and flexible, the practical way of world Buddhism turns towards pluralism rather than fundamentalism. Awareness of intra-religious diversity facilitates understanding and respect for inter-religious diversity in a peaceful way. Hence, Buddhism provides a sufficient contribution to developing peace and harmony through cultural pluralism, both in theory and practice.

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Suggested Reading Andersen, Dines & Smith Helmer (1997) Suttanip¯ata, Oxford: The Pali Text Society. Bodhi 2000 Bodhi Bhikkhu Tr. (2000) The Connected Discourses of the Buddha a new Translation of the Samyuttanik¯ ˙ aya, Vol. 1 & 2 Boston: Wisdom Publications. Bodhi Bhikkhu (2012) The Numerical Discourses of the Buddha a new Translation of the Amguttaranik¯ ˙ aya, Boston: Wisdom Publications Carpenter, J.E. Ed. (1976) The D¯ıghanik¯aya, Vol.III, London: The Pali Text Society. Chalmers, R. Ed. (1977a) TheMajjhimanik¯aya, Vol.II, London: The Pali Text Society. Chalmers, R. Ed. (1977b) TheMajjhimanik¯aya, Vol.III, London: The Pali Text Society. Davids, C.A.F. Rhys Tr. (1990), The Book of the Kindred Sayings [Samyuttanik¯ ˙ aya], Vol. II, London: P¯ali Text Society. Davids, C.A.F. Rhys Tr. (1995) Dialogues of the Buddha [D¯ıghanik¯aya], Vol. I, London: P¯ali Text Society. Davids, C.A.F. Rhys Tr. (1995) Dialogues of the Buddha, [D¯ıghanik¯aya], Vol. II & III, London: P¯ali Text Society. Dharmasiri, Gunapala (1986) Fundamentals of Buddhist Ethics, Singapore: Buddhist Research Society. Feer, L. M. (1975/1991) Samyuttanik¯ ˙ aya, Part I (1991) Part III (1975), Part V (1976) Part II (1989) London:Pali Text Society Hardy, E. (1994) Amguttaranik¯ ˙ aya Part iii, London: The P¯ali Text Society. Jayatilleke, K. N. (1975) The Buddhist Attitude to other Religion, Kandy, Sri Lanka: The Wheel Publication Society. Jayawickrama, N. A. (2001) Suttanip¯ata, Sri Lanka: Post-graduate Institute of Pali& Buddhist Studies, University of Kelaniya. Kalupahana David J. (1999) The Buddha’s Philosophy of Language, Sri Lanka: SarvodayVishwaLekha Karunadasa Y. (2013) Early Buddhist Teachings the Middle Position in Theory and Practice, The University of Hong Kong: Center For Buddhist Studies Kiser Clyde V. (1949) Cultural Pluralism: The Annals of the American Academy of Political and Social Science, Mar., 1949, Vol. 262, Reappraising Our Immigration Policy (Mar., 1949), pp. 117– 130 ѯanamoli, Bhikkhu & Bodhi, Bhikkhu Tr. (2009) The Middle Length Discourses of the Buddha A new Translation of the Majjhimanik¯aya, Sri Lanka, Kandy: Buddhist Publication Society. Narada (1993) The Dhammapada, Taiwan (China): The Corporate Body of the Buddha Educational Foundation Normen H. C. (1970) Dhammapada Commentary, London: The Pali Text Society. Oldenberg, Hermann (1997) TheVinayapit.aka,Vol. I, TheMah¯avagga, Oxford: The P¯ali Text Society. Oldenberg, Hermann (1995) TheVinayapit.aka, Vol. II, The Cullavagga, London: The P¯ali Text Society. Race, Alan (1983) Christians and Religious Pluralism. London: SCM. Steinhal, P. (1982) Udana, London: The P¯ali Text Society. Takakusu, J. M. Nagai (1966) Samantap¯as¯adik¯aVinayapit.aka Commentary, Vol. V, London: P¯ali Text Society. The Holy Bible New International Version (1984) United Kingdom: International Bible Society Udanapali p Wader, A. K. (1961) A˙nguttaranik¯aya Part I, Second edition by London: The Pali Text Society. Walleser, M. & Kopp, H. Ed. (1967) Manorathap¯uraniA˙nguttaranik¯aya Commentary Vol. II, London: P¯ali Text Society. Walshe Maurice, Tr. (2012) The Long Discourse of the Buddha, A translation of the D¯ıghanik¯aya, Boston: wisdom publications. Warder, A.K. Ed. (1961) Amguttaranik¯ ˙ aya Part I, London: The Pali Text Society.

Part VI

Chinese Model

Chapter 65

70th Anniversary of People’s Republic of China: The View from Belarus Anatoli Tozik

Dear colleagues and dear friends! For so many years of my life I have been connected with China—as a Co-chair of the Belarus-China Intergovernmental Committee for Cooperation, as an Ambassador Extraordinary and Plenipotentiary to this country, and as a scholar. In 2009 I worked in China and I saw with my own eyes the enormous emotional, patriotic, and labor inspiration, generated within Chinese society by preparations to mark the 60th anniversary of New China, the People’s Republic of China. What a faith in homeland’s great future shone in the eyes of all the Chinese, I happened to meet at that time! Precisely 10 years have passed. Already living in Belarus, I watched at the largesize monitor, broadcasting the celebrations at Tiananmen Square, and I saw again the same happy faces of thousands of Chinese I did 10 years before. So, what are the origins of their happiness? I believe the Chinese are so happy because they were not deceived in their expectations, and because today their homeland is the country they dreamed it would become. And I’m sure this 70th PRC anniversary is going to become another important milestone in realizing the greatest dream of the Chinese people about the magnificent revival of the Chinese nation. The New China construction was launched and then was carried out in difficult conditions. But the country’s social and economic development results, achieved during four decades of reforms and opening up policy, are really unique in the world’s history. For these forty years (just forty!) China has transformed from a country with vast territory and huge population into a great world power. The analogy to the phenomenon like this does not exist in the world’s history! While studying Chinese society various spheres of the social and economic development, I’m more and more convinced that the experience accumulated by China is A. Tozik (B) Minsk, Belarus e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_65

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of great practical importance not only for the further development of PRC itself and for the other Asian countries, and in many respects for the rest of the planet. And it’s very possible that through some certain time we shall come to conclusion that the model of the social and economic system that is being formed in China is the most optimal for the twenty-first century. There is no way to comprehend the nature of the “Chinese phenomenon” apart from understanding the Communist Party of China participation in its creation. The Communist Party of China, to my deepest belief, is the genuine leader of the Chinese. It enjoys people’s entire confidence and full support. And China today is the result of CPC and people unity. And to my mind only unity of this kind provides the future of China. It’s obvious that China’s influence and contribution into modern world development is becoming more and more significant and much more in demand. Why? I do remember quite clearly the time when humanity was coming out of the state of Cold War epoch full of joy and expectation. But when the coming out was through, these high feelings gradually started to fade. It so happened that the world didn’t turn out to get improved. It became even more problematic with its future less predictable. It’s all because along with the end of Cold War epoch the post-World War II system of checks and balances was destroyed, that very system that previously provided world events with comparative stability and predictability. Nowadays the world so sharply requires some new system of checks and balances to match the realities of twenty-first century. And the war component of this new system will no longer play that vital role it did last century. The political, economic, and moral factors are to play and will definitely play the decisive role. There is no alternative to this way. And China’s role in shaping this new system of checks and balances can’t be overestimated. And the stronger it is, the more influentially it could impact the forming of this new world order system. That’s why the development and the rise of China is not a threat to the world, but a chance. So why do I support such a point of view? Why am I so convinced in that assessment? Because I’m quite positive about the fact that there in China they realize well enough that in a sick and dysfunctional world it’s impossible to build up a happy society in any one country. Therefore, to become more prosperous itself, China must help other countries and peoples (at least those who are eager to) to become more prosperous too. But at the same time, one of the substantial features of our epoch is the fact that the world can never become prosperous if China is dysfunctional. In other words, in the twenty-first century the weight and the role of China in the world economy and world politics is so important, that may be for the first time in the history of the world the strategic interests and purposes of a great power coincide with the strategic interests and goals of mankind. Exactly that kind of understanding what twenty-first century earthly civilization state and development principal regularities are like derives China’s initiative to create the “Community of the Shared Future for Mankind” and to construct “Belt and Road,” the initiatives which are so urgent for all of mankind. It’s a great country’s sincere appeal addressed to all the states and all the peoples to realize the danger

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hanging over the planet and build up together some better life, assisting each other and supporting the weaker. China not only declares its readiness to do so, but it operates this way. The Republic of Belarus is one of the first states to recognize and support Belt and Road Initiative. Belarus possesses the status of located along the Silk Road state, so geographically is situated within the borders of its economic belt. And this circumstance allows the country to be engaged into project implementation by the whole of resources, including trade, economic, scientific, technical, humanitarian and transport potential, as well as law enforcement. One of the most high-profile joint projects within Belt and Road Initiative is the construction of the largest in Europe Chinese–Belarusian industrial park named “Great Stone”. Concluding my report to this high-level international forum I would like to sincerely congratulate the Chinese people with the People’s Republic of China founding 70th anniversary and wish them successful realization of the Chinese dream. After all, the Chinese dream as well as the dream of the mankind are hand in hand going into the future. And I really want and really believe that our descendants will have it.

Chapter 66

70 Years of China’s Development Sundar Nath Bhattarai

China’s 70 years of development is regarded as the most miraculous achievement in the history of economic development of a country in this century. We all have witnessed the progress that China has made transforming itself from poverty to prosperity in a very short span of time. Credit naturally goes to the acumen of five generations of Chinese leadership all along from Chairman Mao, through paramount leader Deng Xiaoping, to the present leadership of President Xi Jinping, their farsighted vision and perseverance, as well as the disciplined and hardworking Chinese people, which stood firm for 70 long years since the founding of the People’s Republic. October 1, which marked the 70th anniversary of the founding of the People’s Republic of China and China’s history of the successful completion of 70 years of its spectacular rise, the joyous and elaborate celebration of which was observed by our Chinese brethren, earns our wholehearted appreciation and support. For the Chinese people, it has been a happy and enjoyable time of victory over poverty and a march towards national rejuvenation. As the next door neighbor, Nepal has witnessed China’s meticulous rise and the important role that it has been playing assiduously in pursuing good neighborly relations with its immediate neighbors, fostering cooperative relations with countries of South and Southeast Asia, and other developing countries, devising constructive and coordinated relationships with major countries, pursuing a policy of peaceful development and moving forward towards the maintenance of international peace and stability by actively participating in the UN and other international organizations, including UN peacekeeping operations, and contributing towards the establishment of open and inclusive global governance. China has consistently pursued these as basic tenets of its foreign policy, more emphatically since the advent of the new generation of leadership under President Xi. S. N. Bhattarai (B) China Study Center, Kathmandu, Nepal e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_66

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Various other visionary initiatives that President Xi has taken and offered to the world during his ongoing tenure, like his unparalleled Belt and Road Initiative, aimed at widest possible connectivity among nations, subcontinents, as well as the world at large for the common good of all involved, in win–win reciprocity, are undoubtedly a unique and unparalleled contribution which has proved to be a potent engine for promoting connectivity and growth as well as a solid platform for Building a Community of Shared Future for Mankind. The community which is expected to be open and inclusive as against the growing narrow, nationalistic, and inward looking bent of mind like that of America First policy of President Trump and some western countries which jeopardizes and weakens the existing trend of globalization, multilateralism, and rule-based international trading system. It is, however, satisfying to note that Xi’s vision of a Community of Shared Future for Mankind has been recognized by the United Nations and other international and regional organizations, which envisages concerted actions among nations. The present prolonged tariff and technological warfare between the US and China, as it will not benefit either party, might hopefully take, sooner than later, a conciliatory and mutually acceptable way out for greater benefit. In recognition of President Xi’s visionary contributions and his charismatic and able stewardship, the 19th National Congress of CPC has endorsed and adopted “Xi Jinping Thought on Socialism with Chinese Characteristics in a New Era” as a guiding principle of national governance of China, with President Xi Jinping’s leadership at the core. Xi Jinping Thought, precisely speaking, is the product of his experience and lessons learned by China in different periods of its history, including adversities and contradictions, and a march towards refined form of Socialism with Chinese Characteristics in a New Era, assimilating past thought, theory, and other lofty principles befitting the new emerging phenomena. The Congress has outlined 14 basic fundamental principles of Xi’s Thought, ranging from ensuring party leadership to building a Community with a Shared Future for Mankind. It has also endorsed a time frame of two centennial goals for achieving rejuvenation of Chinese dream to develop China as a Prosperous, Strong, Democratic, Culturally Advanced, Harmonious, and Beautiful country by the middle of this century. An important provision made for the continuation of the present governance by amending the constitutional provision of the term limit of the Presidency has opened up the opportunity for the leadership under President Xi to lay out and guide the future course of action on a long-term basis, in achieving the objectives of China’s rejuvenation and in playing an effective role in forging China forward as an influential global power. President Xi, during his address on October 1 in celebration of China’s 70th anniversary of the Republic, pledged that China would stay on the path of peaceful development and pursue a mutually beneficial strategy of reform and opening up, a strategy which, as a matter of fact, was a turning point of China’s growth with an average annual rate of 9.2 percent for almost four decades which boosted China’s global status to the present level as the world’s second economic power. President Xi also emphasized that “no force can undermine China’s status or stop the Chinese people and nation from marching forward.” It is highly notable that, along with this

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high rate of growth, Chinese governance has put greater emphasis on its inclusiveness aiming at fair and equitable sharing of economic growth by placing people at the centrality of the growth. The basic thrust is on the integration of the concept of inclusiveness into the economic and social development policy and practice. These measures call for integration of economic growth in GDP with human capital development, accelerating the equal delivery of basic services, promotion of integrated urbanrural development, deepening reform of income distribution system and constant pursuit of social justice. It is gratifying to note that when global free trade has been hit hard by surging trade protectionism, China is organizing the second China International Import Expo (CIIE), which is kicking off in Shanghai at present, being inaugurated on this very day, where more than 3000 exhibitors from more than 150 countries and regions are exploring access to China’s huge consumer market, rejuvenating global free trade with new and enhanced energy. Nepal is highly appreciative of the role that China has played in helping the least developed and land-locked countries like ours by all conceivable means. We are grateful for China’s help in our efforts to uplift our socio-economic status and to become a land-linked country by opening up its seaports and dry ports for our transit trade and by agreeing to link us with Trans-Himalayan cross-border Railway Connectivity and infrastructural and other developmental projects under the Belt and Road Initiative. The recent state visit by President Xi to Nepal (October 12–13), which was followed by Second Wuhan Informal Summit with Prime Minister Modi of India in Mahabalipuram, was of paramount importance in strengthening bilateral relations of respective countries as well as intensification of Trans-Himalayan Connectivity between China and South Asia. As for Nepal, Xi’s visit was marked by the signing of 20 agreements, MoU, other Understandings and a 14-point joint communiqué, which has opened up new vistas for fruitful collaboration in areas like cross- border roads, railways, tunnels, economic zones and transmission lines, energy, tourism, education, health, and preservation of the environment. Experts believe that the visit was a historical success in taking Nepal-China relations to a new height and has ushered China-Nepal relation into a new era, much brighter and more fruitful. All this is indicative of ever-growing cooperation and strategic relationship which is expected to bind Nepal and China together in perpetuity.

Chapter 67

Changing the World, and Its Challenges: Does the Chinese Model Offer an Opportunity? Khalid Rahman

67.1 The Contemporary Phenomenon, Its Nature, Scope, and Dynamics Change has always been a necessary aspect of human life. While an important feature of contemporary times is that the process of change has become faster than ever, the scope, spread and sustainability of change continues to be dependent on the factors rousing the change, most important factors among these are the changes of voluntary nature and expected positive outcome. Change when imposed, whether directly or indirectly, causes stress, uncertainty, and general unease. Similarly, changes causing gain for some at the cost of others always have the potential to ignite a conflict and clash leading to further, mostly disastrous, changes. Undoubtedly the problems our world are facing are great, and it will take the greatness of all concerned working together towards a common goal and bring desired change to overcome them. In this backdrop, the world of today appears to be blessed with numerous positive changes including hallmark achievements of the century such as technological progress, economic growth, fast, easy and cheap access to information, miraculous inventions and discoveries in the medical and health sciences, new and effective means of production, transportation and communications. As we approach the closing year of the second decade of twenty-first century, these changes appear to have completely metamorphosed the human life where the people of the world, societies and economies are integrating; distances are shrinking; and fast means of communications are making the movement of people, goods, capital, information, and knowledge much easier and faster. The geographical boundaries are no more an obstacle and even space is new frontier to be conquered by the world powers. The fourth industrial revolution has led the world to enhanced levels of technological K. Rahman (B) Institute of Policy Studies of Pakistan, Islamabad, Pakistan e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_67

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advancement which has focused on the concept of abundance rather than scarcity. The practical initiatives in artificial intelligence are revolutionizing every aspect of life. While the change seems to have taken over all spheres of individual and collective life such as human and social relations, knowledge and education, culture and society, politics, and economics, and so is the capacity and capability to influence human mind and life, which is also a manifestation of change, the economy now occupies the most significant position in human life. It has an overriding effect on all spheres of life as well as a driving force behind the whole process of change. While this emphasis on economy has resulted in phenomenal growth, this has brought a paradigm shift in the contemporary world with a number of negative consequences in all areas of human life as capital has assumed the greatest importance giving major role to it as well as creating stakes for those having the large amounts of capital. The capitalists are also the main beneficiaries in the process. It is the economically powerful individuals and groups in the economically powerful countries who play the pivotal role in influencing the decision making both within their own countries and at the global level, be it politics, conflicts and wars or development in social sectors like education and health and other services. Even in global institutions like the United Nations, World Bank and International Monetary Fund (IMF), the role of a particular country and power in influencing decisions depends upon the financial contribution which that country makes.1 And within societies and nations, it is not possible for an individual or a party without plenty of capital to assume a position of leadership and to sustain it. As a result, despite an apparent emphasis on peace, progress, democracy, human rights, poverty alleviation, education and health for all, and rule of law the realities of the changing world are alluding to a different story.

67.2 Consequences of Change Gross inequalities are prevailing both between the developed and developing countries as well as within the societies. Only a few nations, and in certain cases institutions or individuals are dominating over the rest of the teeming billions. At the end of the second decade of the twenty-first century, 80%2 of the world’s Gross Domestic 1

These organizations cannot be called democratic. The UN has five permanent members in the Security Council with veto power. And among the veto powers US enjoys the greatest influence mainly due to its larger contribution to the organization. The voting power in IMF is determined by the capital subscription to the fund; as such the decision making is not based on one member-onevote, but one-dollar-one vote. The WTO mechanism is different as compared to many other world bodies with each country having equal voting right but the extra ordinary human, intellectual and financial resources along with political influence give the rich countries a much greater influence in decision making. Similarly, G 7 countries play a key role in guiding contemporary world decision making in almost all important aspects of global governance particularly in the economic arena. 2 International Monetary Fund World Outlook 2019.

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Product (GDP) is being produced in the 20 richest countries and the rest of the world consisting of some 170 countries, are struggling to survive on only 20% of the world’s GDP. Interestingly, this gap has increased phenomenally over last 200 years. Even in the richest country of the world today, around 12% of the population lives below the poverty line.3 The eight richest individuals of the world own same wealth as the poorest half of the world’s population (3.7 billion people)4 whereas half of the world’s populace, nearly three billion lives on less than two dollars a day, merely surviving and yet to benefit from the advancement the world has recorded. Half of the world lacks essential health care services5 ; over two billion people lack access to safe drinking water,6 around 800 million people in the world suffer from hunger and malnutrition i.e., one in nine people on the globe,7 and 3.1 million children die of malnutrition every year.8 The rich are getting richer, and the poor are getting poorer. According to the United Nations, it is no one else but the United States which has the highest level of income inequality of all of the highly industrialized nations (2017).9 Augmented focus on wealth, material gains and economy has also given birth to non-traditional human, social, and security related challenges ranging from weakening of family institution, individualism, increase in drug and human trafficking to the emerging ecological challenges. The imbalances are not confined to economic wealth and social sectors. These are further compounded by asymmetry in military strength and political fields. World military expenditure in 2018 is estimated to have risen to 1.780 trillion US dollars, this represents a 12% increase in real terms since 2008 and a 62% increase since 2000.10 The top ten countries with highest defense spending account for $1.347 trillion (73%) of the total world defense spending. The USA, with its massive spending budget, is the principal determinant of the current world trends, and its military expenditure now accounts for 35% of the world total; it is significant to note that the former President of the USA, Obama who won the elections in the name of “Change” and also won the Nobel Peace Prize, could not change the direction as there was no let-up in US

3

Semega, et. al. 2019, “Income and Poverty in the United States: 2018” Report no. P60-266, United States Census Bureau. 4 Elliot, L. 2017, World’s Eight Richest People have Same Wealth as Poorest 50%, The Guardian, 16th of January, 2017, https://www.theguardian.com/global-development/2017/jan/16/ worlds-eight-richest-people-have-same- wealth-as-poorest-50. 5 News Release 2017, World Health Organization, https://www.who.int/news-room/detail/13-122017. 6 WHO Report 2019, Drinking Water, https://www.who.int/news-room/fact-sheets/detail/drinkingwater. 7 https://www.wfp.org/hunger/stats. 8 UNICEF 2018. 9 https://inequality.org/facts/income-inequality. 10 SIPRI 2019, Trends in World Military Expenditure, 2018, SIPRI Fact Sheet April 2019.

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military spending.11 All the P5 countries, namely China, France, Russia, the United Kingdom (UK), and the USA, which are supposed to play a key role in maintaining global peace and security are included in the top six largest arms exporters in 2018 along with Germany. The share of the USA in global arms exports is 40% and the UK ranks second with 19% share in global arms exports.12 Total military spending corresponds to 2.1% of world GDP, or approximately $231 for each person in the world13 ; only a fraction of the huge spending on militaries can lift the whole world out of the wretched conditions it finds itself in, presently. The gravity of the situation can be appreciated by comparing this huge amount with the total budget of the world body which is expected to ensure peace and security. The United Nations and all its agencies and funds spend about $48 billion (2016) each year, or about $6 for each of the world’s inhabitants (as far as 2016 expenditures are concerned). This is a very small sum compared to most government budgets and it is less than three percent of the world’s military spending. It is not then surprising that for nearly two decades, the UN has faced financial difficulties and it has been forced to cut back on important programs in all areas, even as new mandates have arisen. Many member states have not paid their full dues and have cut their donations to the UN’s voluntary funds. As of January 2019, members’ arrears to the peacekeeping missions reached $2 billion, of which the US owed $776 million.14 The emergence of Multinational Corporations (MNCs) has influenced the behavior of the whole world. Currently, top ten largest MNCs belong to technology related business. The top ten list of MNCs financial volume is so big that they outearned countries if compared in the context of GDP. For example, Apple earned $229 billion in 2017 which would rank the company at a higher number if it were a country. Given their huge capital resources and production capacities, MNCs are able to dictate their own terms in economic dealings. For the sale of their enormous production, MNCs require access to large markets: yet tariffs’ issues, access restrictions and similar barriers to trade are hurdles in this access. What MNCs need is a global system for the free flow of their goods. They, therefore, use their sheer economic weight to influence international trade rules. With their huge resources, they employ lobbyists with the highest expertise and influence at international trade organizations.15 After analyzing the changes occurring in the first two decades of twenty-first century, we find, unilateralism and preventive strike doctrines are practically taking 11

US military expenditure rose by 63% in real terms between 2000, just before George W. SIPRI Yearbook 2010, “Media Background—Military expenditure,” 2–3, http://www.sipri.org/media/ media/pressreleases/pressreleasetranslations/storypackage_milex. 12 Sabbagh, D. 2019, “UK Reclaims Place as World’s Second Largest Arms Exporter,” The Guardian, 30th July 2019, https://www.theguardian.com/world/2019/jul/30/uk-reclaims-place-asworlds-second-largest-arms-exporter. 13 http://worldpopulationreview.com/countries/countries-by-gdp. 14 https://www.reuters.com/article/us-un-peacekeepers-usa/u-N-members-owe-2-billion-in-debtto-peacekeeping-U-S- owes-a-third. 15 Rahman, K. 2007, “MNCs and TNCs: Their Role and Socioeconomic Impact on Host Societies,” Policy Perspectives, Vol. 4, No. 2, pp. 115–126.

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away what the world had achieved in the fields of international law, human rights, equality, and freedom. Hegemonies and power politics are continuing in international relations in the name of “National Interest,” with local conflicts and hotspot issues keep emerging. Even the institution like the United Nations Security Council (UNSC) seems to have lost its relevance.16 While the UN membership is close to 200, the power to make decisions and enforce them at the global level lies with the selected few, rather on the lone ones, in many cases. The discussions about the expansion in UNSC have been underway for some time but these have been generally revolving around bringing in a few more, like-minded powers which will only further disturb the balance of power in the world. Moreover, it is not only the decision making process, the implementation of the decisions by the UN is also selective. It is easy to target the weak while the powerful can comfortably disregard the UN resolutions.17 Borders can be violated, and national sovereignty no longer seems sacrosanct while forced or manipulated regime changes are being sanctified. This approach poses the greatest threat to the global order, peace and security in the world and provides a perfect environment for the non-state actors to mobilize the people who are increasingly getting frustrated, owing to injustices meted out to them and in the wake of increasing loss of faith in the global order, and in its representative institutions. Various other challenges, ranging from traditional inter and intra-state conflicts, horizontal and vertical proliferation of lethal nuclear weapons, to transnational crimes which have remained unresolved, are also an expression of the same phenomenon. What is more important is the emergence and gravity of, nonconventional threats to human security. Food security is alarming, both for natural and manmade causes. Energy security is too big an issue to ignore. Mass scale environmental degradation, and dangers arising out of water crisis as well as implications of the “climate change” phenomenon all demand attention and actions at the global level. There is no doubt that profound changes are being witnessed in the world politics today. The longstanding geo-political realities are undergoing radical changes, transformations and ups and downs. New alignments, groupings, friendships, and adversities are taking shape. New centers of powers at regional levels, if not global, have emerged over the years and are making their presence felt. Regarding the global

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The doctrine of “pre-emptive strike”, followed by occupation of Iraq despite the objections raised from all over the world is a glaring example of this unilateralist approach by the world’s most powerful country. 17 Unilateral actions of India by revoking constitutional special status of Jammu & Kashmir on 5th August 2019 and establishment of US embassy in Jerusalem by Trump administration in May 2018 are two recent examples in this regard. During the debate in UNGA, the US representative Nikki Haley said: “We will remember it when we are called upon to once again make the world’s largest contribution to the United Nations, and so many countries come calling on us, as they so often do, to pay even more and to use our influence for their benefit.” She added that: “America will put our embassy in Jerusalem. That is what the American people want us to do, and it is the right thing to do. No vote in the United Nations will make any difference on that.

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security and regional security, the role of non-state actors has become increasingly evident. The global economy, although still controlled mainly by the developed North, is witnessing a transformation. China due to it extraordinary march towards development is leading this transformation in the global economy. Besides the momentous growth of China, the role and share of countries such as Russia, India, and Brazil have not only been enhanced but has been influential. At the start of the twenty-first century, the UN general body approved plan for 15 years (2000–2015) in the name of Millennium Development Goals (MDGs) but the achievements of these goals have not been very impressive. Since January 2016, new development goals have been approved by the UN general assembly and these are operational as Sustainable Development Goals (SDGs) for current 15 years (2016– 2030). The program contains 17 SDGs and 169 targets to be achieved till 2030. These efforts are appreciable in the context of identification of the problems but targeted goals until now have not been achieved which means that issue is not in identification of problems, but the real difficulty is somewhere else which needs to be explored and corrected.

67.3 Needed Change: Looking Beyond the Prevailing Paradigm The scenario, discussed above, presents both a challenge and an opportunity for change. While each and every problem, mentioned above, needs a special and focused response, a sustainable and comprehensive solution requires attention towards the root causes of the problems. These lie in the contemporary paradigm of life and development. Essentially the issues will have to be dealt with at both conceptual and operational levels and China without doubt has an important role to play in this landscape. No doubt, owing to diversity, related to human life, the issues of identity and the struggle to compete with each other is a natural and integral part of human psyche. However, for peace and progress it needs to be directed and regulated towards a healthy competition and win–win situation. Unfortunately, the currently dominant paradigm, based on the “survival of the fittest” and in turn “might is right” phenomenon can never provide a healthy environment as it makes the use of power, both at individual and collective levels, such a priority where moral principles lose their significance. Conflict, not only armed or physical but in many other forms becomes inevitable in such a situation. This is what we find in today’s world. The current paradigm, based on the Capitalistic model and led by the economically powerful countries and promoted by the aid agencies and international financial institutions, particularly the World Bank and the IMF, and large scale enterprises such as MNCs and Transnational Corporations (TNCs, IMF with capital formation, market-economy, liberalization, privatization

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and foreign aid, totally delinks economics from ethics, moral values, and social and egalitarian ideals; the consequence of which is that the notions of right and wrong, fair and unfair, equality and inequality, and just and unjust are becoming foreign to the struggle for economic gains. Instead of “identifying, considering and making ethical and principled choices about societal development,” obsession with the quantum and rates of growth, capital formation, foreign aid and resource allocation, and maximization of profits and individual gains is on the rise at the cost of exclusion of all other concerns including human welfare and social well-being. Instead of justice and human well-being, efficiency is the key word in this paradigm with real emphasis on growth. Reduction of poverty and welfare of the people are left to its trickle down effects. So, the paradigm will have to be adjusted to “Progress and Development with a human focus.”18 The manifestation of the current paradigm in the arena of international relations is the concept of “National Interest.” In the conduct of international relations between the countries of the world, a moral and ethical dimension will have to be promoted further and really put into practice. If the world order continues to be based entirely on the notion of “National Interest”: the interests of the weaker nations will continue to be subjugated by the strong and the powerful. As such it is not only the interdependence of the countries that has increased the importance of interaction, consultation and dialogue as well as cooperation but the increasing need for a holistic and sustainable development also calls for a new approach, new vision, and a paradigm shift in the international political and economic relations i.e. from pursuing national interest at the cost of others to a relationship focused on overall and holistic human and social welfare and based on mutual cooperation, respect, interest and benefit.

67.4 Responding to the Need: Does the Chinese Model Offer an Opportunity? While many would like to see this shift, China is perhaps in the best position to take up the challenge and lead towards this paradigm shift. It represents one fifth of world population, and one of the oldest civilizations in the world; it is a unique example of sustaining an established political and economic system, while remaining open to inevitable transformation and modernization; and being the second largest economy in the world as well as one of the largest trading nations, it has a key role in driving the present day world economy. It has made enormous progress during recent years in energy resources, ecological and environmental conservation, and technological development; and also has one of the world’s most organized, welltrained and disciplined armies. Its capacity and credentials are also established as an active member of the world apex body and a permanent member of Security Council who enjoys very good bilateral and multilateral relations, with the world community. 18

For more discussion, see: Khurshid Ahmad, Pakistan’s Economic Journey Need For A New Paradigm, Foreword, Fasih Uddin, Islamabad: Institute of Policy Studies, 2018, xxvii–xxviii.

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The question in the given scenario is this: can the world move to a cooperation paradigm to benefit from the opportunities of connectivity for the common good of mankind; by joining hands for prosperity not for one at the cost of others but under a win–win approach. We all know that the paradigm is not new; yet in the absence of any commitment from the powerful global players, in putting this paradigm into practice, genuinely, it has remained a challenge. The emergence of China, in the leading position in global affairs, indeed promises prospects of its implementation. The situation has provided two conflicting opportunities for China, i.e., either owing to its now greater stakes in the global systems it plays a protective role for the current arrangement to continue to benefit from it or to proactively challenge the paradigm on which the system is based. Therefore, the challenge before the Chinese leadership is to balance its perspective and practice. Chinese perspective in this regard has been made quite clear by successive Chinese leadership. Deng Xiaoping, one of the most prominent Chinese leaders had clearly stated: China is not a superpower, nor will she ever seek to be one. If one day China should change her color and turn into a superpower, if she too should play the tyrant in the world, and everywhere subject others to her bullying, aggression and exploitation, the people of the world should identify her as social-imperialism, expose it, oppose it and work together with the Chinese people to overthrow it.19

Former President Hu Jintao also echoed the same tone during his address to the Communist Party of China’s (CPC) 17th People’s Congress.20 Throughout the period the same approach is frequently reflected in Chinese interactions with the world leaders. It may be useful to quote former Chinese Foreign Minister Yang Jiechi from his address at the Munich Security Conference on 5th of February 2010: A more developed China will continue to treat others as equals and will never impose its own will on others. Gone are the days when one or two countries made decisions for the whole world. China has always maintained that all countries, big or small, strong or weak, rich or poor, are equal members of the international community and must respect one another and treat one another with equality. China’s diplomacy is guided by this principle. The equality we call for is not just equality in form, but more importantly equality in substance. All of 19

http://thinkexist.com/quotation/china-is-not-A-superpower-nor-will-she-ever-seek/550788. html. 20 Some of the excerpts of this speech are: “We are committed to combining the interests of the Chinese people with the common interests of the people of other countries, and always stand for fairness and justice. We maintain that all countries, big and small, strong and weak, rich and poor, are equal. We respect the right of the people of all countries to independently choose their own development path. We will never interfere in the internal affairs of other countries or impose our own will on them…”. “China cannot develop in isolation – nor can the world enjoy prosperity and stability without China. The Chinese people will continue to work tireless with the people of other countries to bring about a better future for humanity.” “China will never seek benefits for itself at the expense of other countries and also will not shift its own troubles on to other.”. “We support international efforts to help developing countries enhance their capacity for independent development and improve the lives of their people so as to narrow the North-South gap.”.

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us should embrace a diverse world with an open mind. We must respect the values and independent choice of the development path of other countries, respect other countries’ core concerns and refrain from interfering in their internal affairs. In the same vein, China, like any country in the world, will stick to principles on issues affecting its core interests and major concerns and defend its hard-won equal rights and legitimate interests.21 A more developed China will undertake more international responsibilities and will never pursue self-interests at the expense of the interests of others. We know full well that in this interdependent world, China’s future is closely linked to that of the world. Our own interests and those of others are best served when we work together to expand common interests, share responsibilities, and seek win–win outcomes. That is why while focusing on its own development, China is undertaking more and more international responsibilities commensurate with its strength and status.

President of China Xi Jinping, who is considered to be one of the strongest presidents in the history of the country after Mao Zedong, also frequently emphasizes the same vision. On 3rd of September 2019 Xi, while opening a training program for officials at Central Party School stressed: The methodology of welfare, prosperity and mutual benefit of society are not contained inside the country but spread around the globe which shows the world that governance of China has qualities and advantages in comparison with western diplomacy of colonizing the developing countries.22

The mindset of President Xi Jinping can also be seen from the speech he delivered at the opening ceremony of BRICS business forum where he said: As a Chinese saying goes, ‘It is easy to break one arrow but hard to break ten arrows bundled together.’ We should leverage our respective strengths and influence, promote South–South cooperation and North–North dialogue, pool the collective strengths of all countries and jointly defuse risks and meet challenges.23

Let me also quote a few remarks from President Xi’s speech in the 19th CPC Congress: while discussing basic policy framework he makes clear, that major country diplomacy with Chinese characteristics aims to foster a new type of international relations and build a community with a shared future for mankind; he stresses that “The wellbeing of the people is the fundamental goal of development” and promises “Ensuring harmony between human and nature”. Stressing promoting the building of a community with a shared future for mankind, he elaborates: We will uphold justice while pursuing shared interests, and will foster new thinking on common, comprehensive, cooperative, and sustainable security. We will pursue open, innovative, and inclusive development that benefits everyone; boost cross cultural exchanges characterized by harmony within diversity, inclusiveness, and mutual learning; and cultivate ecosystems based on respect for nature and green development. China will continue its 21

http://www.china-un.org/eng/czthd/t656702.htm. Xin & Zheng 2019, “Xi Jinping Rallies China for Decades-Long ‘Struggle’ to Rise in Global Order, Amid Escalating US Trade, South China Morning Post,05th of September, 2019, https:// www.scmp.com/economy/china- economy/article/3025725/xi-jinping-rallies-china-decades-longstruggle-rise-global. 23 http://www.china.org.cn/business/2017-09/04/content_41525050.htm. 22

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efforts to safeguard world peace, contribute to global development, and uphold international order.

And while discussing the Vision of Development President Xi highlighted the spirit of the connectivity through the Belt and Road Initiative (BRI) when he said: …pursuing the Belt and Road Initiative as a priority, give equal emphasis to “bringing in” and “going global” follow the principle of achieving shared growth through consultation and collaboration, and increase openness and cooperation in building innovation capacity.

What Xi noted in the context of confidence in “culture” is also important: Culture is a country and nation’s soul. Our country will thrive only if our culture thrives, and our nation will be strong only if our culture is strong. Without full confidence in our culture, without a rich and prosperous culture, the Chinese nation will not be able to rejuvenate itself.

Finally, his remarks highlighting the relationship of man and nature are extremely important; he said: Man and nature form a community of life; we, as human beings, must respect nature, follow its ways, and protect it. Only by observing the laws of nature can mankind avoid costly blunders in its exploitation. Any harm we inflict on nature will eventually return to haunt us. This is a reality we have to face. The modernization that we pursue is one characterized by material and cultural wealth to meet people’s ever-increasing needs for a better life, we need also to provide more quality ecological goods to meet people’s ever growing demands for a beautiful environment.

To universalize and operationalize the vision, the approach Chinese leadership has come up with is an aggressive plan of connectivity in the form of BRI. The underlying objective of the initiative is building of large scale market and utilizing international and domestic markets through increased cultural interactions and mutual understanding which is largely in compliance with paramount intentions and thoughts of the China model. The concept is broad and has the potential of enhancement of infrastructural development in developing and underdeveloped countries which are continuously exploited by the currently dominated narrative of economic development. While presenting this new paradigm before the world an important challenge for China will be to focus within as well. As in spite of current emphasis on the harmonious development it is also facing problems such as inequality, corruption and dishonesty, weakening family institution, depleting moral and ethical standards and changing value framework. This is understandable as during last few decades’ priority was given to economic progress under the rationale of pragmatism. Pragmatism is a philosophy which emphasizes that the truth or meaning of an idea or a proposition lies in its observable practical consequences rather than something metaphysical. So “whatever works is likely true.” “It doesn’t matter if a cat is black or white; it is a good cat as long as it catches mice.” Consequently, the truth becomes changeable, and no one can claim to possess the final or ultimate truth which in turn makes moral principles irrelevant. And in the absence of moral principles, law alone does not have the power to prevent the crime, clash and the conflict in any society.

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Thus, the Chinese model offers an opportunity and is worth implementing but making it sustainable and genuinely adaptable, it still has a long way to go.

67.5 Conclusion The changing world is facing a number of challenges. For a sustainable solution it will have to move from a bitter and bad experience of Western model of economic development which is more of a vicious circle of debt traps for developing and underdeveloped countries, to a system which is just and fair. The concepts of shared community and mutual cooperation around the world in the fields of global governance and politics, economic development and social values offer the opportunity for sustainable transformation. China, with its proclaimed humane model, is perfectly placed to play a leading role in this regard. Meanwhile, to begin with, the world also expects China to play a proactive role in the following areas. Strive for upholding the objectives and principals of the UN Charter, observance of international laws and conventions, universally recognized norms of international laws leading to evolving a global system based on justice. Play an assertive role in the UNSC to make it genuinely representative of all the member countries and enable it to address the hotspot issues. Ensure an aggressive presence in the global media, which has become such an important tool in shaping the minds of the people, to make an alternative paradigm and perspective available. Providing an effective counter-balance in the global affairs, along with the emerging likeminded developing nations, while avoiding confrontation in order to ensure stability of the world. Continue to share, at the economic and technological levels, its development experience, knowledge, and skill with countries of the developing world. There is a need to foster this kind of cooperation and sustainable infrastructure development at a faster pace. The Stronger and prosperous the developing world, the lesser the chances of injustices inflicted upon its unfortunate people.

Chapter 68

The Secret of China’s Success Model “How China Should Be Looked At” Helga Zepp LaRouche

Rather than seeing the rise of China as a threat, we in the West should acknowledge the enormous benefits for mankind flowing from the unprecedented economic miracle that China has achieved in the past 40 years. Unfortunately, most people in the United States and Europe know very little about China and its 5000-year culture, which makes it relatively easy for the geopolitically motivated mainstream media and exponents of the anti-China lobby to paint a completely distorted picture of the country. In fact, China has opened a new, totally inspiring capital of universal history, by setting an irrefutable example for all other developing countries of how it is possible to overcome poverty in a relatively short period of time, and to achieve a good living standard for growing strata of the population. Over the past 40 years, China has implemented the most massive anti-poverty program in human history, lifting 850 million of its own citizens out of poverty, and contributing 70% of global poverty alleviation efforts. Its average economic growth from 1978 to 2018 was an impressive 9.5% per year, and even the decline this year to only 6% growth due to various factors, still represents a level that European nations and the United States can only dream of. According to World Bank statistics, China has been the second largest economy in the world since 2018 in terms of GDP, but number one in terms of per capita purchasing power. Since 2015, China has had the largest middle class in the world, and President Xi Jinping was personally committed to freeing the several million people still living in extreme poverty in China from that plight, a goal which China successfully accomplished by the end of 2020. Neither Europe, with some 90 million people living in poverty, nor the United States, where 40 million are considered poor, have a comparable program.

H. Z. LaRouche (B) Schiller Institute, Bonn, Germany e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_68

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Traveling today on one of China’s 40,000 km of high-speed railway lines (by the end of 2021, with a new Maglev train being tested running at 600 kph), serviced by trains running punctually and quietly over the countryside at 350–400kph, and which connect the modern well-organized stations with clean marble floors, or visiting the Shenzen-Guangzhou-Macao region, the economic engine of the Belt and Road Initiative, it is hard to imagine how poor and underdeveloped China once was before its tremendous transformation. But before Deng Xiaoping introduced the reform and opening up policy, people were very poor, often without enough to eat, and technologically backward. The streets were filled with hundreds of bicycles, even the roads linking many cities were essentially dirt tracks, automobiles were a scarcity, farming was not mechanized. The Chinese people had lived through more than a century of enormous hardships and privations, from the Opium Wars and territorial occupations to civil war, from the enormous initial economic difficulties of the PRC to the horrors of the domination of the Gang of Four during the Cultural Revolution. Deng Xiaoping launched an economic miracle with his reforms, which allowed the entire population, including the two generations born since then, to experience a continuous upswing and for growing sections of the society to be better-off. A comparable upward trend took place in Germany during the post-war reconstruction, at the time of the German economic miracle in the 1950s and 60s. But then it ended due to a series of factors, such as the emergence of the anti-technology Green movement, and the opposite direction was taken, toward the deindustrialization which threatens today. In China on the contrary, the improved living standards, the social progress and the growing respect for the country, in particular among the developing countries of Asia, Africa and Latin America, have generated a fundamental cultural optimism, such as that which was characteristic of the United States of America from the time of Roosevelt’s New Deal to the assassination of John F. Kennedy, and then during the Apollo program. During this time, China faced a whole series of problems. Deng Xiaoping describes how in the early stages of his reforms, the world was still dominated by the notion of colonial rulers who attempted to suppress the development of China and other developing countries. Thus, China initially accepted foreign investment in areas of cheap production in the coastal special economic zones, which brought at least some capital into the country. China was in a certain sense the main target of the increasing deregulation and monetization of the transatlantic economic system, which outsourced the productive capacities formerly located in the U.S. and Western Europe to China and other developing countries. This was motivated by the greed for profit of the City of London, Wall Street, and companies like Walmart, K-Mart, Target, etc. The price to pay for China was enormous environmental problems such as contaminated groundwater and polluted air, which the government has invested great effort in trying to reverse. At the same time, Deng sought to gain access to international capital and high technologies from abroad, by ensuring that scientists were invited in and students were sent to study in other countries. But given the attitude in the West, which consistently denied really advanced technologies with the “dual use” argument, as well as

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the increasingly hostile attitude of the Soviet Union since Khrushchev, he emphasized the necessity for China to rely primarily on its own forces. That is something that very few in the West understand: without the Chinese population’s tremendous will to develop, and without the virtues which used to characterize Germany, such as diligence, reliability, a sense of motivation, efficiency and creativity, China would never have been able to accomplish this economic miracle, which is unprecedented in history because of its scope and vision. Various think tanks, mainstream media, and politicians try to blacken China’s image, by claiming that its success is due to the theft of Western intellectual property alone. It cannot be ruled out, of course, that it in a population now reaching 1.4 billion people, there has been industrial espionage, just as was and is the case for every industrial nation in the world. The American government itself often encouraged such piracy. In his 1791 “Report on Manufactures”, Alexander Hamilton called on the country to reward those who brought “improvements and secrets of extraordinary value” from elsewhere. Since he knew that the export of machines in most nations was prohibited subject to severe penalties, he obviously considered state-sponsored smuggling of technologies to be a legitimate means to build the American economy. But how is it that China has become the world leader in certain areas, for example that it has built the best and biggest high-speed railway system in the world, reaching 30,000 km by now, or that it is the only country to have landed on the far side of the Moon? Who could it have copied that from? Another angle of attack against China is the accusation that the social credit system is proof that China has become a total surveillance state, as if Edward Snowden had never existed. Representatives of the intelligence apparatus and the media who level this accusation are obviously projecting onto China their knowledge of the surveillance apparatus in the West. While the use of artificial intelligence, including facial recognition and digitization of many areas of life, is more advanced there than in the U.S. and Europe, such claims overlook the fact that China has a very different social system, namely a meritocracy that developed over several millennia out of the imperial examination system since the Qin (221–206 BC) and Han (206–220 AD) dynasties and the Confucian tradition. One of the most essential differences between the culture of not only China but all of Asia and that of the West is the priority given for thousands of years to the common good of society over the rights of the individual. Behind this is the conviction that the individual and the family can only do well if the state as a whole is doing well. Besides, the outstanding importance of individuality, as it developed positively from the Renaissance and European humanism, and negatively from the ideology of extreme liberalism (“anything goes”) is much less important in China. This historical cultural difference, deeply rooted in the Asian tradition, is the primary reason why the idea that China would automatically adopt the system of Western democracy after joining the WTO was an illusion from the outset. By the same token, most Chinese people view the social credit system positively, because it is in line with their conviction that those who contribute to the common good should be rewarded, and those who create a drunken ruckus in the train should be refused a ticket the next time. This view is completely contrary to the liberal zeitgeist that reigns here, but

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whether we in the West are doing the right thing with the decriminalization of drugs and the removal of all taboos remains to be seen. Those who regard the Chinese system as the great challenge to the Western “system of values” should rest assured: thanks to the green ideology in some countries, and the decadent entertainment culture and declining life expectancy in others, the West has done that all on its own! The anti-Chinese propaganda is in no way something new, it comes from the resentment consciously stoked by the European colonial powers. The pejorative expression “the Yellow Peril” appeared at the turn of the twentieth century in all sorts of books, short stories, sketches, and caricatures, that insidiously stoked fears about Asian peoples, because the geopoliticians of the British empire feared that their power in the world could be broken by the development of Eastern Asia. The same type of thinking is displayed by Samuel Huntington in his Clash of Civilizations, a book soaked in ignorance, or more recently by the former Director of Policy Planning at the State Department, Kiron Skinner, who came out with the racist statement that the United States is confronted for the first time with a competing superpower which is not “Caucasian”. Over recent years, more and more people in the U.S. and Europe have developed a healthy mistrust of the mainstream media and the “fake news” they spread. It would be advisable to exercise the same wariness regarding the coverage of China and to form one’s own opinion. In that respect, it is recommended to read Xi Jinping’s speeches that have been translated into many languages, and which have been published in two volumes titled The Governance of China. They give the reader an impression of the philosophical depth and the breadth of the Chinese president’s political spectrum, his knowledge of Chinese history and of foreign cultures. It also becomes clear that he is interested in the regeneration of China, but not at the expense of other nations, but that he is seeking a truly new paradigm of coexistence, namely the “shared community of the common destiny of mankind.” If one considers the Chinese Presdient Xi Jinping from the standpoint of the moral of Benjamin Franklin, of the founding fathers of the United States, or of European humanism, one finds his policy orientation commendable; but considered from the standpoint of Locke, Hobbes, or the Rolling Stones, one only sees the suppression of individual ‘s right to do whatever one wants to. In the West, it is not usual for political leaders to care about the moral and cultural education of the population. But this is exactly what Xi Jinping does, when for example he promotes a renaissance of Confucianism at all levels of society. In a dialogue with professors of the Chinese Academy of Fine Arts, Xi stressed the extraordinary importance of aesthetic education for the youth of China, as it is the precondition for the development of a beautiful mind and the creation of new great works of art. He emphasizes the role of literature and the fine arts in sensitizing people to “the true, the beautiful, and the good” and enabling them to reject what is “false, evil, and ugly”. Without this moral and aesthetic education, he said, even those who are otherwise strong could end up on the side of bad habits or vice. That, of course, goes completely against the zeitgeist in the U.S. and Europe. But instead of presenting China as a great threat, which it is not, we should rather ask whether this Confucian orientation to the moral improvement of society has

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something to do with the extraordinary success of the Chinese model. No one should argue that everything is perfect in China, or that the West should adopt this model, but in order to judge the quality of a society, one needs to look at the direction development has taken. And for the past four decades, it has been upwards in China. As a result, the majority of the population is optimistic about the future. If one has been freed of prejudice and ignorance about China, and becomes curious to get to know China and to understand its culture, one is very likely to arrive at the same viewpoint as the great German philosopher Gottfried Wilhelm Leibniz, who recognized the enormous potential of cooperation with this culture, so that if the most developed cultures of the time, Europe and China, joined hands, they could raise all the nations in between to a higher level. The same applies emphatically today to the United States and China: if the two largest economies in the world work together to overcome poverty in the world, and to develop new advanced technologies such as nuclear fusion and cooperation in space, then all of mankind will benefit from it throughout the future.

Chapter 69

Development that Leaves No One Behind: Learning from China’s Transformative Experience Syed Munir Khasru

69.1 Introduction Over the past 30 years, China has undergone unprecedented economic growth rates considering the country’s scale and diligence. The current scenario of China is a stark contrast to China 40 years ago, where hundreds of millions of Chinese people were living in impoverished conditions, suffering from malnutrition, and were deprived of their basic rights. China has metamorphosed from an underdeveloped country to the world’s second largest economy (Chow, 2010). In the era of globalization, countries are much more connected than they were during the onset of the Industrial Revolution. Therefore, at present, the economic growth and overall development of one country has a spillover effect around the world. Thus, it is important for all nations to work together in pursuit of advancing towards a holistically developed world, leaving no one behind. As several developing nations are struggling with slow growth rates, poverty, and a myriad of other problems, they could benefit to learning from China’s journey as a rising nation (Yinuo, 2016). This paper uses a multifocal lens to examine the reform process which has led to China’s drastic economic transformation and development in 40 years. While the paper does not disregard the shortcomings of the Chinese growth model, it focuses on the three decades of success and how other developing countries can learn from it.

S. M. Khasru (B) The Institute for Policy, Advocacy and Governance (IPAG), Dhaka, Bangladesh e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_69

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69.2 Reasons for Reform in 1978 In 1978, China was at its peak for adopting economic changes for four reasons (Chow, 2010): Firstly, due to the unpopular reception of the Cultural Revolution, the government had to forsake the old regime to win the support of its population. Secondly, after acquiring years of experience in economic planning, government officials became aware of the shortcomings in the planned system and realized that there was a need for change. Thirdly, China observed the successful economic development of the “Four Tigers”1 and understood that a market economy functions better than a planned economy. Lastly, the reform would have been unattainable without the cooperation, determination, and readiness of the Chinese population.

69.3 Special Characteristics of the Chinese People As China’s education is centered in Confucian ethics, the population highly prioritizes development through education. In 1870, 21% of the adult population in China were literate compared to other parts of the world such as Latin America (15%), and South Asia (3%) (Morrisson & Murtin, 2005). Hence, according to Zhao, 2018, one of the major drivers for China’s success is the Chinese people. China’s exponential growth is a result of investments driven by high savings rate of Chinese households.

69.4 Features of Modern China The Chinese people call their economic reform program as “Gai Ge Kai Fang,” which means “change the system, open the door” (Dollar, 2008). There are four features of this reform which have helped China take the shape it has today which are: change in the system, trade liberalization, infrastructure development, and agricultural reform. Another feature that also helped the process heavily is the extensive focus on research and development.

69.5 Change the System Before the economic reform, China had a planned economy built on collectivized agriculture, state-owned enterprises (about 77% of industrial production), and a small number of local state enterprises. Change the system indicates the shift of the economy from near-total state ownership to one where the private sector is dominant. This reform allowed both the state and non-state sector to co-exist and compete. Since 1995, the private sector has prospered widely and by 2003, it consisted of 72%

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of industrial output. In this timeframe, many collectives and state firms were privatized, and new private firm’s entry was encouraged (Dollar, 2008). As per the findings of a World Bank survey, only 8% of the firms in China were state-owned, 27% were foreign-invested, and a majority were domestically owned private firms.

69.6 Liberalization of Trade Prior to 1978, China was among the strictest closed economies in the world (Dollar, 2008). The 11th Central Committee of the CPC adopted a reform called “open the door,” to liberalize trade and foreign direct investment (Chow, 2010). This initiative was complemented by the decentralization of trade. The provinces of China were provided with the power to engage in trade and to fulfill quotas which promoted competition and contributed to a percentage of the foreign exchange earned. These policies facilitated the proliferation of trade and led China to achieve technological advancement, management skills, and the global production of networks. This reform resulted in China’s exports and imports increasing at an annual rate of 16% in the period 1990–2006. Also, China emerged as the largest receiver of FDI, becoming a manufacturing and trading superpower (Dollar, 2008). For example, Shenzhen’s achievements are a microcosm of China’s progress over the past four decades. Shenzhen was a fishing village with a population of just 30,000 in 1979. The introduction of free-market policies into this special economic zone unleashed investment that triggered a boom. Over time, Shenzhen achieved an extraordinary 22% annual average growth rate from 1980–2016, according to The Economist. Today, Shenzhen is home to 12.5 million people, poverty has been nearly eliminated, and per-capita GDP was nearly $50,000 in 2016 which is on par with some US states.

69.7 Development of High-Quality Infrastructure China developed a vibrant private sector, attracting foreign investors for the following reasons: high quality in both hard and soft infrastructure, good investment climate in Chinese cities, and a lower burden of bureaucratic red tape compared to many developing countries (Hallward-Driemeier, Wallsten, & CollinXu, 2003).

69.8 Physical Capital The development of infrastructure has been a significant factor in bolstering China’s growth. The capacity of the power sector has grown at a rate of 10% per year to

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keep pace with the necessity of the economy. China has invested in physical capital heavily and some studies showed that investment in physical capital contributed to 50% of China’s growth in the post-reform years.

69.9 Skill Development for Workers China targeted the capacity building of its workers. The country adopted a few measures in this regard, for example: (i) Foreign investors in China were made to hire a maximum number of Chinese staff and provide training. (ii) China developed very sophisticated training institutes which specialized in technical skills development to prepare the Chinese population for the industry.

69.10 Agricultural Reform China is a densely inhabited, resource-scarce country that started reform with an 80% rural population. Grain output per hectare was very high, thus, raising income for the rural populace needed several corresponding measures. Growth in the agricultural sector has reduced rural poverty immensely. The number of rural people in extreme poverty plummeted to less than 15 million in 2007 from 250 million in 1978. This growth has been possible due to the combination of various institutional reforms such as the adoption of “Household responsibility system” from collective farming, a technological change adopted through R&D system, and a shift from a planned economy towards a market economy and agricultural investment (Huang & Rozelle, 2018).

69.11 Extensive Focus on Research and Development (R&D) The country’s leadership focused on R&D, which helped China immensely in the shift to a service-based economy. China placed innovation at the epicenter of its strategy for development. The Chinese R&D expenditure accounts for 15% of the world’s total and this is only likely to escalate in the coming years. As Cook remarks, the Chinese model denotes pragmatism, experimentation, and gradualism, looking for success, keeping what works, and discarding what does not. This approach is reflected in widely cited slogans of the Chinese communist party-state, such as “crossing the river by feeling the stones.”

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69.12 Effects of Reform on Poverty Reduction According to the Nobel Laureate economist Joseph Stiglitz, “no country in recorded history has grown as fast and moved as many people out of poverty as China over the last 30 years.” Poverty alleviation remains one of the top priorities on China’s domestic development agenda. In 1978, China was one of the poorest countries in the world. In about 25 years, China has set an unprecedented example in the world, lifting 439 million people out of extreme poverty since 1990. According to UNDP, China had contributed to 76% of all global poverty reduction to 2015. China witnessed an average GDP growth of almost 10% per year till 2014, raising per capita GDP almost 49 times, from 155 US dollars in 1978 to 7590 US dollars in 2014, lifting 800 million people out of poverty. Furthermore, poverty reduction is stimulated by growth in both agriculture and non-agricultural sectors.

69.13 Learning from the Chinese Experience: Lessons for South Thirty-six percent of the world’s poor population resides in South Asia, a region plagued by a dearth in socio-economic development. At the initial stages of the reform, China was struggling with three problems: inadequate finances, weak infrastructure, and outdated technology. It had to work on its economic growth, social development, and environmental protection simultaneously, which it was able to do, quite successfully. Besides, in terms of the size of the economy, population size and endowment of natural resources, as well as cultural aspect, South Asian countries, can be easily compared to their Asian neighbors instead of, say, European countries. Thus, South Asian countries can learn from the Chinese experience with the aim to achieve socioeconomic transformation through SDG Agenda 2030. Some key lessons that South Asian countries may focus on are: . From the experience of China, it is evident that countries must give attention to raising agricultural productivity and income in those areas that experience a cultural lag. At the same time, emphasis should be placed on creating job opportunities in the non-farm sector. . A higher amount of savings at both public and household level is required to sustain the required level of investment and sustainable economic growth over time. . One of the crucial obstacles to development in South Asia is the lack of good physical capital. From China’s experience, the importance of good infrastructure can hardly be overemphasized. Therefore, South Asian countries need to place further emphasis on the investment of infrastructure development.

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. Human capital is one of the many enabling factors in China’s extraordinary growth. South Asian countries need to invest in the capacity building through skill development of their labor force to produce high-quality human capital. . There is a gap in investment in research and technological development in agriculture in South Asia. Similar to China, more initiatives need to be taken towards fostering and advancing research. . The tax-to-GDP ratios in South Asian countries are as low as 10%, compared with China where it is closer to 20%. Hence, there is scope for increasing domestic resources by enhancing the tax base and strengthening tax administration and tax compliance. This could be done by plugging loopholes to prevent the leakage of tax revenues, through regional tax cooperation and innovative new taxes. In Bangladesh and Pakistan, less than 1% of the population pays income tax, and in India, the figure is less than 3%, with collection efficiency between 29 and 40%. UNESCAP has estimated that the potential tax gap (the gap between actual and potential revenue) varies between 17 and 72% across countries in the subregion.

69.14 Limitations Even if China holds important lessons for South Asia, it may not be feasible to apply all the lessons for a number of reasons: . The Maoist legacy of “self-reliance” resulted in a debt-free economy for prereform China. Thus, China had almost no foreign debt when the state initiated its economic reform. Besides, South Asian countries rely largely on foreign aid and have incurred huge debt for their development projects. . China’s sharp decline in fertility rate has resulted in fewer young dependents to support for a given size of the working cohort. The fraction of the prime-age population in the total population rose steadily for three decades, creating an unusually large demographic dividend, which in turn contributed to economic growth.

69.15 Criticism Income Disparities China’s real GDP has grown by an average of 15% each year. However, this economic growth has been accompanied by increasing income disparities. The income discrepancies among regions, and particularly between urban and rural residents have increased steadily since the mid-1980s. Researchers have reported the worsening of income inequality in China. The Gini coefficient for household income in China, for example, rose from 0.33 in 1980, to 0.40 in 1994, and to 0.46 in 2000. The last figure surpasses the degree of inequality in Thailand, India, and Indonesia.

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69.16 Environmental Degradation China is the world’s largest emitter of carbon dioxide with an emission of 8.29 billion tons in 2010, which is a side effect of its unbridled industrialization. The ecological damage has also taken a toll on people’s living standards. About 15 of the world’s dirtiest cities are in China which is quite alarming. Countries taking lessons from China’s development should keep in mind the side effects of unprecedented industrial growth over a short span of time.

69.17 Conclusion In conclusion, developing countries can take lessons from other successful countries and adapt the learnings for complementing their process of development. China’s success with growth and poverty reduction in the last 40 years provides thoughtprovoking and inspirational lessons. It is almost fascinating to witness a country undergo such drastic economic changes, which has triggered a leap in the standard of living (Yao, 2018). While countries should not attempt to blindly copy China’s development lessons, they may always draw inspiration and pave the way for their own growth, based on their own history, culture, and society.

Suggested Reading Chow, G. C. (2010). Important Lessons from Studying the Chinese Economy. Dollar, D. (2008, February). Lessons from China for Africa. (4531), 33. Eckart, J. (2016, June 23). “8 Things You Need to Know about China’s Economy.” Retrieved from World Economic Forum. https://www.weforum.org/ agenda/2016/06/8-facts-about-chinas-economy/. Hallward-Driemeier, M., Wallsten, S., & CollinXu, L. (2003). The Investment Climate and the Firm Firm- Level Evidence from China. Policy Research Working Paper. Huang, J., & Rozelle, S. (2018). “China’s 40 Years of Agricultural Development and Reform.” In R. Garnaut, L. Song, & C. Fang, China’s 40 Years of Reform and Development 1978–2018. ANU Press. Morrisson, C., & Murtin, F. (2005). The World Distribution of Human Capital, Life Expectancy, and Income: A Multidimensional Approach. Yao, Y. (2018). The Political Economy Causes of China’s Economic Success. China’s 40 Years of Reform and Development. Anu Press. Retrieved from https://www.jstor.org/stable/j.ctv5cg bnk.13. Yinuo, Y. L. (2016, March 16). World Economic Forum. Retrieved from https://www.weforum.org/ agenda/2016/03/what-lessons-can-we-learn-from-china-s-rapid-growth/. Zhao, Y. (2018). The Chinese Secrets for Success: Five Inspiring Confucian Values. Morgan James Publishing.

Chapter 70

China’s 70-Year Development Approaches to Shared Prosperity Zaidi Sattar

70.1 The China Backdrop By historical standards, China’s rapid economic progress since 1980 has been nothing short of a miracle. No economy in history has grown at double digit growth rates for nearly three consecutive decades. China’s meteoric rise in the past 70 years is a classic example of the impact of opening up an economy to global markets. This growth experience is unique and gave further credence to the paradigm of export-led growth. China is now the world’s leading exporter of goods ranging from textiles to smartphones, with $2.3 trillion in exports in 2018. Since joining the World Trade Organization in 2001, China has emerged as the workshop of the world. China’s factories now generate more real manufacturing value added—$3.7 trillion in 2017— than the US, Germany, South Korea, and the UK combined. In the process, it ran trade surplus with the leading economies of the world thus accumulating the largest amount of foreign exchange reserves by 2018 (over $3 trillion). The pivot of China’s economic success was its rapid integration with the global economy (Table 70.1). Massive job creation accompanied this trade-led growth experience which had the effect of lifting some 800 million people out of poverty. As is well known, China’s rapid growth phenomenon reached its peak prior to the financial crisis of 2008–2009. The global economy required a rebalancing of demand in which China had to boost domestic consumption. A fundamental restructuring of the Chinese economy is under way in which its economy has adopted an approach to shift reliance from exports to domestic consumption to drive growth. In consequence, China’s exposure to the rest of the world has been declining while

Z. Sattar (B) Policy Research Institute of Bangladesh, Dhaka, Bangladesh e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_70

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Table 70.1 China’s global integration GDP

In 2014, China became the largest economy in the world in purchasing power parity (PPP) terms. It is now the second largest economy, after the USA, with a $14 trillion GDP, accounting for 17.5% of world GDP

Trade

In 2013, China became the largest trading economy in the world, accounting for 11.4% of global goods trade. But in services trade the share was only 6.4%. It is now the largest exporting nation in the world with exports of $2.3 trillion in 2017, and imports of $1.8 trillion

Business

China has 121 of the Fortune 500 top firms in the world but bulk of their revenue come from the domestic market (82%) compared to 56% for S&P 500 firms

Capital

China has the largest banking system, and the second largest stock-and-bond market

FDI

In 2016, China was the second largest source of outbound FDI ($221 billion) and also the second largest destination of inbound FDI ($144 billion)

Technology

China is the world’s second largest investor in R&D spending of $293 billion in 2018

Data

China has the most internet users in the world (800 million) generating huge amount of data but cross-border flows are limited

Tourism

China is now the source of the largest number of outbound tourists in the world (150 million in 2018)

Environmental impact China accounts for 45% of global investment in renewables but is still the world’s largest source of carbon emissions (28% of total) Source McKinsey Global Institute; Google; various reports

domestic consumption demand is raising the world’s exposure to China.1 This rebalancing effort, in addition to the global growth slowdown, has resulted in the Chinese economy settling down to more moderate levels of GDP growth of 6–7% a year. At this pace China could still become the largest economy in the world in nominal US dollar terms by 2030.

70.2 The History of Progress China’s social and economic progress can be traced back 5000 years. Throughout this long span of history, the Chinese nation made tremendous contributions to the progress of human civilization, including in the areas of philosophy, science, art, culture, and governance, to name only a few. Attributed to China are the inventions of the compass, the printing press, paper, and gunpowder. For many centuries, China led the world in ideas, some of which everlasting, such as Confucianism, which 1

McKinsey Global Institute (MGI), China-World Exposure Index shows increase in world’s exposure to China while Chinese exposure to the world declined.

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asserted that hard work and frugality boost economic performance, an idea ingrained in Chinese popular myth. It was the discovery of the New World in the fifteenth century and the onset of the Industrial Revolution that pulled the center of gravity to Europe and America turning China into a “sleeping dragon” for several centuries. But the arrival of socialism in the early twentieth century brought with it the dreams of the Chinese people for a rejuvenation of China. The last 70 years of the Chinese experiment in social and economic transformation has been at the center of this goal of national rejuvenation. The turning point came with the structural reforms of the 1970s. Premier Zhou Enlai championed the modernization of industry, agriculture, science and technology and national defense in the early 1970s. Then reforms that started in 1978, led by Deng Xiaoping, transformed China’s economy from a fully state-controlled socialist economic system into an economy with much greater reliance on markets and private entrepreneurship. Within just three decades, China succeeded in transforming itself from a centrally-planned closed economy into one of the world’s most dynamic and globally-integrated market economies. The reforms, open door policies, and institutional changes brought forth a competitive entrepreneurial culture and led the economy towards capital accumulation, productivity gains and income growth, the likes of which were never seen before. Before the reform period in 1978, China was a nation headed nowhere with a majority of people living in extreme poverty. China’s growth which came about within a very short span of time after 1978 wasn’t just a one-off reform strategy that targeted all sectors simultaneously. Its development strategy followed a more gradual and methodical approach which initially targeted specific and small sectors before moving onto much bigger reform strategies. The first phase of reform thus started in rural areas and then slowly moved onto enterprise-centric development programs in the urban areas. Reforms were first introduced in agriculture, followed by foreign trade and investment sectors, and later extended to industry. They focused heavily on the agriculture sector because of the huge potential it had and was a good starting point upon which further reforms could be built. China broke up the collective farms system and empowered small-scale farm owners. Agricultural output yield soared which led to greater job creation; rural incomes as well as savings went up which was later used for investment in township and village enterprises (TVEs) in the 1980s and 1990s. China primarily focused on investing in labor-intensive industries to create jobs for its huge labor force. As more people got jobs and consumption increased in the economy, so did tax payments which were later on used for infrastructure improvements. Each reform targeted one sector at a time which created a chain reaction in other relevant sectors, thereby engendering overall growth in the economy. Such a pragmatic approach of reforming small sectors before going big was designed to avoid major disruptions to the economy. Internationally, the Chinese economy began to open up for greater integration in trade and investment with the global economy. Foreign trade, FDI and the utilization of external technological cooperation and capital in all forms became widely acceptable elements of national policy. The degree of openness accelerated with China’s

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accession to the World Trade Organization (WTO) in 2001, catapulting China into the export powerhouse of the world.

70.3 China’s Strategy of Economic Development Post-19782 The reforms starting in 1978 which continued over three decades were comprised of three core strategies. The Open Door Policy Since 1978. The open-door policy introduced in late 1978 which encouraged foreign investment changed China’s overall relations with the world, including Asia. China adopted and tapped into the latecomer advantage.3 The Good Neighbor Policy Since 1990. The good-neighbor policy of 1990 was directed at China’s neighbors, in Southeast Asia principally. China built cordial economic relationships with its neighbors in Southeast Asia, Central Asia and other parts with an aim to share their economic gains and prosperity with neighboring countries. The “Go Global” Strategy Since 2002. The year 2002 was the first year after China’s entry into the World Trade Organization (WTO), giving China more opportunities to construct a closer relationship of political economy with other countries under the framework of the institutionalized WTO. In so doing, Chinese leaders proposed the strategy of “going global” that is aimed at bringing Chinese enterprises overseas. Trends in trade, inward foreign direct investment (IFDI), and OFDI identify three different stages of China’s globalization. Chinese economic benefits from globalization surpassed expectations, open trade policies worldwide, helped sustain global demand for Chinese products just as opening its market has sustained Chinese demand for global products. China’s openness to foreign capital helped improve domestic economic efficiency and productivity by encouraging competition, educating, and training the workforce and providing access to cutting-edge modern technology. China imported foreign practices in a host of areas ranging from banking regulation to product standards. China’s global integration created the ground for policy change to allow the beginnings of rapid expansion of exports of labor-intensive manufactures alongside rapid growth in imports of a range of capital-intensive and technologically sophisticated manufactured goods and of industrial raw materials. Economic activity prioritized investment in infrastructure and heavy industry. Alongside infrastructure, much investment was concentrated in an increasingly diverse and sophisticated export sector. 2

Materials drawn from (a) The World Bank, China 2030- Building a Modern, Harmonious, and Creative Society, and (b) Samuel (2006), China’s Changing Political Economy with Southeast Asia: Starting a Newpage of Accord, Asian Perspective, 113–140. 3 Developing countries, however, can acquire, imitate or borrow technologies, industries and institutions from the advanced high-income countries during the catch-up process. In this way, technological innovation and industrial upgrading in developing countries involve lower costs and fewer risks than in high-income countries. This is the so- called latecomer advantage.

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The new economic strategy which sought to combine market mechanism with state intervention proved highly successful in terms of double-digit growth. Rapid economic growth and slower increases in wages raised the profit share of economic activity. This supported the increasing savings, which, in turn, underpinned extraordinary levels of investment. To summarize, key features of China’s development strategy that produced the export surge, rapid growth, and poverty reduction are the followings. Pragmatic and effective market-oriented reforms. China implemented a strategy known as “crossing the river by feeling stones”. One key feature of these reforms was their “dual-track” nature—supporting state-owned firms in old priority sectors while liberalizing the entry of private enterprises.4 Balancing growth with social and macroeconomic stability. The unstable economic situation that prevailed prior to 1978 reform phase made economic growth an urgent priority. A mix of fiscal, administrative, and employment policies helped to maintain social stability during this period of rapid economic and structural change. This was no ordinary achievement, given that an additional 9 million people had to be given jobs during a time of high frictional and structural unemployment brought about by policy shifts such as restructuring the SOEs. Interregional competition. Local governments were encouraged to compete in attracting investment, developing infrastructure, and improving the local business environment. Decentralization policies, including fiscal reforms in 1994 increased factor mobility which in turn enhanced economic activity in jurisdictions most capable of growth. Officials were rewarded for delivering key reform goals: growth, foreign direct investment (FDI), employment, and social stability. Domestic market integration. Policies were undertaken to restrict the regional barriers to the movement of goods, labor, and capital and the establishment of a single national market. Infrastructure development projects to improve connectivity via roads and coasts were prioritized to help markets grow. Steady integration with the global economy. The establishment of special economic zones and accession into the World Trade Organization (WTO) helped China expand its economic integration with the global economy. The position of China in the world gave it a natural advantage, i.e., being close to Hong Kong and Taiwan. Value Chain integration. The country evolved from a somewhat closed and guarded economy to a highly integrated manufacturing hub for the global value chains (GVCs) by implementing policies to attract foreign investment and promote trade facilitation. Over the years, China invested heavily in transportation, Internet, and information and communication technology (ICT) related infrastructure. Integration into GVCs helped improve firm productivity and competitiveness. As a result, today China is one of three main global manufacturing hubs, besides the US and Germany. Asian economies are tightly linked with China through regional supply chains. McKinsey Global Institute finds that value chains are becoming more regional and

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Lin, Justin Yifu, 2010, The China Miracle Demystified, The World Bank.

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less global. This development is particularly noticeable in Asia. China is the largest trading and investment partner of Malaysia, Singapore, and the Philippines. In recent years, China’s role in international trade has begun to shift. China is moving into higher value-added sections of the GVCs. There is broad consensus that China’s growth is likely to slow; annual average growth over the next 20 years is expected to be one third less than annual average growth for the past 30 years (6.6% vs. 10%). Although the current growth trends will enable them to reach high-income status by 2030, the growth slowdown may have unexpected results on the economy. Successful implementation of the reform policies aimed at finding new growth drivers—increased efficiency in input use, higher human capital investments, increased innovation, and a shift to high-value services—will help China avoid the middle-income trap and maintain an expected average growth rate of between 6 and 7% a year in the coming two decades, compared with an average of nearly 10% a year in the past three decades.

70.4 An Approach to Shared Prosperity5 ,6 China, long known as the sleeping dragon, has now awakened. For the past three decades, the economy has grown at double digits to become the second largest economy in the world, after USA. Chinese income has risen manifold during this time, and poverty has been all but defeated. But Chinese leadership, and President Xi Jinping in particular, is now promoting a grand design of Pan-Asian community building whose principal underlying theme is “shared prosperity” for the entire community. Chinese leadership understands that if there are parts of the Asian community that are left behind in the march of twenty-first century progress its own progress will have less meaning. “A close neighbor is better than a distant relative,” says a Chinese proverb. Since 1990, China’s attention to good relations with its neighbors has resulted in strong institutional and diplomatic ties that underpin a remarkable Asian geo-economic agenda. “Inclusiveness” is the underlying theme, and the principle is that prosperity not shared is prosperity denied to millions of people in need. Though its outward signaling is global, the focus is Asia, which Chinese leadership acknowledges as one of the most dynamic and most promising regions of the world. In recent years, Asia has emerged as a major engine driving global economic recovery and growth having worked side by side with leading world economies to address the challenges presented by the global financial crisis of 2007–08. Asia has contributed more than 50% of global growth, instilling much needed confidence for global recovery.

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World Bank Group, (May 2019), China Economic Update. Significant material on Chinese policy for this section has been derived from a chapter of the book, see: Xi Jinping, “A Better Future for Asia and the World,”: The Governance of China Part I, Third Edition, 2018, Foreign Languages Pres Co. Ltd. Beijing. 6

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As one reads about the policy stance of the Chinese government, one can see a reiteration of the commitment for a shared future of mankind, implying that Chinese economic prowess and wealth creation that is on the ascent will mean little for the whole of mankind unless it is shared. In pursuit of that shared human destiny, the Chinese government has espoused a policy of respect for sovereignty of all nations and people, regardless of their ethnicity or levels of development. The BRI and AIIBBRICS institutions provide the geo-economic muscle to this new type of geopolitical movement emerging from Beijing. But times are changing. Asia needs to transform and upgrade its development model in keeping with the trends of the time in order to unleash its full potential. To ensure sound and stable global growth, reform of the international economic and financial systems as well as global governance mechanisms is critical. The notion of “common development,” the very foundation of sustainable development, is another theme being espoused under a concept of shared future because mankind has one earth which is home to all countries. As the Chinese saying goes, “a single flower does not make spring, while one hundred flowers in full blossom bring spring to the garden.” The faster China grows the more development opportunities it will create for the rest of Asia and the world community. China is committed to energetically promote regional cooperation in Asia and around the world. It firmly supports Asia’s opening up and cooperation with other regions for their common development. In pursuance of this, China will continue to champion and promote trade and investment liberalization, step up two-way investment with other countries and boost cooperation in new priority areas. Belt and Road Initiative is about much more than infrastructure. Along with the Belt and Road Initiative (BRI), China has engaged in several major international projects, including the Asian Infrastructure Investment Bank (AIIB), BRICS New Development Bank (NDB), and the national Silk Road Fund, all primarily aimed at meeting the huge gap that exist between resource needs and the massive demand for infrastructure in developing Asia and Africa. The BRI sets out China’s new thinking about its globalization strategy, while the AIIB and NDB are multilateral financial instruments. Arguably, China’s BRI is designed to lay some of the foundations for a new inclusive phase of globalization. The proposal has already received a great deal of support, leading Fukuyama (2016)7 to argue that it is part of “an historic contest… over competing development models… between China… and the United States (US) and other Western countries.” China’s emphasis is on strategic international economic partnerships and multilateral credit to address investment, infrastructure, employment, and economic development. The BRI became a specific notion representing China’s new thinking about open development and China going-abroad. At present over 30 countries have signed memoranda of understanding (MOUs) with China on jointly building the BRI, while

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Francis Fukuyama (2016), “Reflections on Chinese Governance,” Journal of Chinese Governance, 1:3 379–391, DO I:10.1080/23812346.2016.1212522.

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another 40-plus countries have expressed interest in the initiative, indicating that the BRI is having a profound impact on world development. Although the BRI contains new Chinese thinking about international cooperation and reveals China’s ambition to play a more active global development role, it aims to uphold a global free-trade regime. Combined market–state governance is actually the basis for China’s recent success (Dunford & Liu, 2015).8 Learning from the ostensible discontents of neoliberal globalization, the BRI therefore embodies a framework for globalization that may be aptly described as “inclusive globalization.”

70.5 Chinese Development Experience: Lessons for Developing Countries The developing countries, particularly those that are still minimally integrated with the world economy as a matter of choice, should learn from the Chinese experience what opportunities global integration through trade and investment brings for the national economy and local population in terms of growth, job creation and poverty reduction. The most impressive achievement of China’s pro-market, open-door, and goglobal reforms since 1978 was that it lifted more than 800 million people out of poverty, slashing the poverty rate from nearly 90% in 1981 to under 2%, as measured by the World Bank’s poverty indicators. Many countries in developing Asia today suffer from the kind of poverty that afflicted China in the 1970s and 1980s. There is much to learn about how such remarkable progress in poverty eradication was achieved. What would be most instructive is to learn how China exploited its competitiveness in labor-intensive industries in the first decade of market-oriented development and then began moving to higher value added and technology intensive industrialization in service industries. For developing countries, it would be highly instructive to learn more about the Chinese strategy focused on innovation in technological transformation. What is more intriguing for outside observers is to understand how the Chinese “governance” system works to create a dynamic market-based economy with “Chinese characteristics.” What are these Chinese characteristics that non- socialist developing economies can learn from? In light of the foregoing, one can identify several priority areas for developing countries to learn from the Chinese experience, including (a) the political economy of governance of China as it impinges on the Chinese economy (b) how does China blend socialist control with freedom of enterprise and entrepreneurship?

8

Dunford, Liu (2016), Inclusive globalization: Unpacking China’s Belt and Road Initiative, Area Development and Policy- Taylor and Francis Group.

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(c) as Chinese economy transforms from factor-driven growth to technologydriven growth, what is the strategy for addressing and exploiting the emerging challenges presented by the Fourth Industrial Revolution (IR4.0)? (d) what are the main strategies and features of the Chinese efforts to rebalance the global economy which was adversely affected by the long period of Chinese trade and current account surpluses? Learning from the Chinese approach to structural reforms. Chinese reforms followed a gradual evolutionary path based on localized experiments in selected sectors and its extension to other areas only when the local experiments turned out successful. Rather than being a “big bang” as in the USSR and east Europe in the 1990s, the Chinese reforms have been picturesquely described as “a series of small, controlled explosions”. Instead of having a comprehensive reform package, China followed a sequential approach, especially in the first stage of reforms (1978–93). Reforms were first introduced in agriculture, foreign trade, and investment sectors (that too in limited coastal regions) and later extended to industry. Similarly, the infusion of FDI and the growth of production for the competitive world market exposed China to new ideas and technologies and changed the closed mindset of earlier decades. Investment, tax, and foreign exchange regimes designed to attract FDI in export-oriented industries in a few SEZs (only four in 1980) were gradually extended to more areas. Another successful reform strategy that the Chinese undertook was introducing competition among the industries locally. The strategy for reforming the industrial sector took the form of initially allowing the growth of non-state firms and to make the state-owned enterprises (SOEs) less important over time. This increased the pressure on SOEs who were forced to improve their efficiency. By avoiding hasty privatization, the Chinese also avoided the “partial reforms trap” where the interim gainers stop further reforms from taking place fearing that they might lose whatever was gained.9 Countries in transition should, as quickly and efficiently as possible, integrate their economies with that of the global economy once the initial development goals have been achieved via reforms at the local level. For example, one benefit of opening up to other economies involved China making use of a supply-chain through Hong-Kong to dominate the global trade market. The Chinese leadership has attempted to maintain the socialist character of the economy, focusing public ownership on key sectors of the economy whilst encouraging the development of the non-state sector. Barry Naughton,10 in his book, Growing Out of the Plan: Chinese Economic Reform, 1978–1993, stated that the Chinese reform was a mix between laissez-faire and experiments done by the government on various forthcoming business prospects. He further alluded to the idea that other aspiring countries will not be able to emulate China’s development strategies as immaculately because Chinese institutions were helped by political leaders who could influence economic policies and by a high-quality bureaucracy. 9 Roy, Alok, “The Chinese Economic Miracle: Lessons to be Learnt,” Economic and Political Weekly, 3835–3837 + 3839–3848. 10 Barry Naughton, Growing Out of the Plan—Chinese Economic Reform, 1978–1993.

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Justin Yifu Lin (2010) argues that China was most successful in its reform strategies because it tapped the right markets in the export–import regime, i.e., importing what the rest of the world knows and exporting what the world wants. The economy’s disposition changed from a somewhat closed economy to one that was open to both foreign trade and investment, where export led growth and the FDI is seen as important tools for economic development today. As China was one of the latecomers to join the advent of globalization, it did not incur the costs of innovation, research, and development as much as that of the early starters in the West. While on one hand China protected its domestic industries in priority sectors from unhealthy competition, on the other, it liberalized the entry of private enterprises, FDI, etc., in sectors where they enjoyed a comparative advantage: the dual track approach. This approach of providing protection to non-viable firms and on the other hand, easing the entry conditions by foreign enterprises brought forth a competitive business culture in China. Countries all over the developing world look upon China as a model for how to implement, manage, and sustain economic growth policies. Although enacting similar strategies would not always yield the desired outcome because every country is unique in terms of their location, resource endowments and government policies, but a trajectory is nevertheless helpful. Rural and urban job creation, privatization and FDI, investment in human capital and better education, technological advancements, reduction of red tapes, tariffs and integration with the world market are some of the broad reforms that can be garnered by other developing countries who share similar economic interests. Too often, China’s development model is misinterpreted or oversimplified as amounting to little more than strong leadership policies (Kaplan, 2014).11 Although the famous Chinese philosopher Confucius’s belief that “a perfect balance of materialism and spiritual aspect can drive a nation to its prosperity” was discarded by many countries, in China, this ideology became an integral part in their journey towards becoming an economically prosperous state.

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Kaplan, S.D. (2014), “Development with Chinese Characteristics: Ten Lessons for Policymakers,” GREAT Insights Magazine, Volume 4, Issue 1, December 2014/January 2015.

Chapter 71

Chinese Economic Growth: A Critical Look Aly D. Coulibaly

71.1 Introduction China’s economy has enjoyed a long period of explosive growth, making it one of the world’s largest. Its vast and growing economic activity overseas is used to strengthen national competitiveness and build international leverage. The success is based on a mixed economy that incorporated limited capitalism within a command economy. The Chinese government’s spending has been a significant driver of its growth. My paper, based on recent reports published by two international references,1 will remind some key facts about Chinese economic growth and focus on its underlying risks, the lessons learnt for the world and African Leaders, the road for future growth and the next strategic challenges. It is intended to take a critical look on this dynamics.

71.2 Recap of Some Key Facts About Chinese Economic Growth In October 2017, it has been declared the beginning of a “New Era” for China. At home, this means consolidating the country’s leader’s personal power and strengthening the Communist Party’s grip. Abroad, it means transforming China into a global leader and reshaping the world in its interest. This ambition can be summed up as “Make China Great Again,” to paraphrase a well-known slogan in the US.

1

McKinsey Global Institute (July 2019) and OECD (April 2019).

A. D. Coulibaly (B) West African Economic and Monetary Union, Ouagadougou, Burkina Faso e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_71

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Fig. 71.1 Real GDP growth from 1973 to 2018 for China and the G20. Source OECD Economic Outlook 104 database, April 2019

Broadly, this strategy has two prongs: first, to acquire the technological expertise needed for China to become a first-rank industrial and military power; second, to assert China’s economic leadership around the world, transforming it into a serious rival to the US and using, for example, the Belt and Road Initiative (BRI)2 as the strategic underpinning of the country’s signature foreign policy. China has undergone profound changes in its economic system over the last 40 years. Despite the magnitude of the changes, China’s economic reforms have been characterized by gradualism and experimentation. This policy of reform and openness has allowed China to move from a relatively underdeveloped centrally planned economy to an increasingly market-driven economic power. China’s real GDP growth rate is significantly higher than that of the G20 countries for more than 45 years (Fig. 71.1). Today, the Chinese economy is characterized by a strong tendency to domestic consumption, and therefore endogenous and an aggressive policy of conquering new markets and investments. Consumption has been supported by low unemployment and steadily rising incomes. Households are spending increasingly on items such as e-commerce and shared services. As the labor force has been shrinking for a number of years, reflecting population ageing, labor shortages are keeping wage growth high, particularly in large inland cities. 2

Chose examination of the Silk Road project, often presented as a “historical opportunity”, shows, for sceptics both at home and abroad, an exaggerated potential. It is an excuse for a wasteful spending. It is a project with 5 vague objectives: policy coordination, facilities connectivity, unimpeded trade, financial integration and people-to-people contacts (over six distinct “economic corridors”). The BRI is less a coherent scheme involving a clear list of projects than a series of wide-ranging policy aims. Many of the projects now included under its banner have been planned for years (Miller, 2019).

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China fueled its former spectacular growth with massive government spending. The government owns strategically important companies that dominate their industries. It controls the big three energy companies: PetroChina, Sinopec, and CNOOC. They are less profitable than private firms and return only 4.9% on assets compared to 13.2% for private companies. But government ownership allowed China to direct the companies to high-priority projects (a form of “state capitalism”). China requires several things of foreign companies who want to sell to the Chinese population. They must open factories to employ Chinese workers. They must share their technology. Chinese companies use this knowledge to make the products themselves. The People’s Bank of China, the nation’s central bank, tightly controls the yuan to dollar value. It does this to manage the prices of exports to the United States. It wants them to be a little cheaper than those produced in America. It can achieve this because China’s cost of living is lower than the developed world. By managing its exchange rate, China can take advantage of this disparity, which has triggered recent commercial tensions with the US. China’s “New Era” started with a strong growth and a large contribution to the current expansion of the world economy. According to long-term growth scenarios, until around 2030, China would contribute more to world growth than OECD countries (Guillemette and Turner, 2018). In that year, China’s share of world output would peak at 27%. In the recent couple of years, a greater focus has been put on the quality of growth rather than its pace, with early signs of success. Efforts have been made to stimulate domestic consumption and to avoid the worsening of macroeconomic imbalances. In the recent period, downward pressure on the economy has increased, partly as a result of escalating trade tensions, prompting the government to swiftly introduce stimulus measures to support growth. This economic growth is an opportunity for China to rise or wake up again, to talk of fuxing, “rejuvenation” or “revival” to restore what has been lost and to implement its “New Dream” for changing the global relationship between the country and the rest of the world in terms of trade, firms, capital, people, technology (Fig. 71.2). There are many figures as sources of potential conflicts between countries: . for example, in 2017, 11.4% share of global goods trade for China, against 11.4% for US and 7.8% for Germany (Annex 1) . the OECD FDI Regulatory Restrictiveness Index for many sectors, showing that China is a less open economy with the highest index over time (Annex 2) . the variable technology market share, in China and in the rest of the world (Annex 3) . growing Chinese consumption from 2007 to 2017, offering opportunities for markets abroad (Fig. 71.3). Roughly, Chinese economy has grown but it more room remains to globalize further, and it shows many signs of fragility or vulnerability (Table 71.1).

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Fig. 71.2 China and the World /Inside the dynamics of a changing relationship. Source McKinsey Global Institute (2019)

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Fig. 71.3 Chinese consumption as share of global market size (consumer goods industries)

71.3 Risks of Chinese Growth For China Itself Government spending created a total debt-to-GDP ratio of 260%. This includes debt held by the government, corporations, and consumers. Since the state owns many corporations, it must be included. The consumer debt may have also created an asset bubble. Urban housing prices have skyrocketed as low-interest rates fueled speculation. High growth levels have come at the cost of consumer safety. The public has protested pollution, food safety, and inflation.

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Table 71.1 Some paradox of Chinese growth China’s scale

More room to globalize

Trade

China has been the world’s largest goods trading nation since 2013, accounting for 11.4% of the global trade in 2017

… but China accounted for only about 6.4% of global services sector trade in 2017

Firms

China has 110 Global Fortune 500 companies, comparable with the United States

… but they are still anchored in the domestic market (18% of revenue earned overseas vs 44% for S&P 500 firms)

Capital

China has a large financial system (the largest banking system, and second-and third-largest stock and bond markets, respectively)

… but cross-border flows (3–4 × smaller than US flows) and foreign participation are limited (foreign ownership is less than 6% in banking, stock, and bond markets)

People

China is the world’s largest source of outbound students (17% of international tertiary degree students in 2017) and tourists (Chinese tourists made 150 million outbound trip in 2018, the most in the world)

… but people flows are still geographically concentrated (–60% of outbound students go to the US, Australia, and the United Kingdom), and migrant flows to China are only 0.2% of global total

Technology

China has invested heavily in its … but still relies heavily on R&D (the world’s second-largest imported technology (more than spender with $293 Billion in 2018) half of technology import contracts come from just three countries) and intellectual property (China’s IP imports are six times larger than exports)

Data

China has the most internet users in … cross-border data flows are the world (more than 800 million), limited (8th highest in the world, generating huge amounts of data but only 20% of US flows)

Environment impact China accounts for 46% of global renewables investment

… but it is still the world’s largest source of carbon missions (28% of total)

Culture

… but cultural reach is still relatively limited (exports of television dramas are only one-third of South Korea’s)

China has invested heavily in developing global cultural presence (12% of top 50 world movies shot in China in 2017 vs 2% in 2010)

Source McKinsey (2019)

It also created a class of ultra-rich professionals who want more individual liberties. They live in urban areas since that’s where most of the jobs are. In 2017, almost 60% of the population lived in urban areas. In the 1980s, it was just 20%. Local governments are charged with providing social services but aren’t allowed to tax to fund them. As a result, families are forced to save. China doesn’t offer benefits to people who’ve moved from the farms to the cities to work. Interest rates

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have been low, so families don’t receive much return on their savings. As a result, they don’t spend much. That keeps domestic demand low and slows growth.

For Developing Countries Trade surpluses have allowed China to build large foreign exchange reserves that it invests in its silk route project, in the conquest of other markets and in the construction of infrastructures, especially in developing countries. This apparent “easy” money exposes them to the risk of taking on too much Chinese debt. Yet the lure of development often outweighs the risk of economic dependence which may be an acceptable trade-off for some countries in any case. And that, to be blunt, is their choice: nobody is forcing them to take Beijing’s money. For some countries, their growing dependence on Beijing could reduce them to vassal states, shackled to their wealthy creditor. They fear they may lose the power of self-determination or sovereignty altogether. Moreover, Chinese economic upturn raises some concerns: . the contribution to the aggravation of certain realities in developing countries during the realization of projects or construction of infrastructures: underemployment of the local/national labor force, environmental degradation, problems of corruption when awarding public contracts, etc. . the unbalanced “win–win” strategy with its partners (a fiction far from the reality) . the lack of technology and knowledge transfer at the end of projects . the over-indebtedness of African countries when investing in infrastructure (large impact on public finances). Failure to take these realities into account could lead to a feeling of “anti- Chinese,” which would be harmful to all.

71.4 Lessons from Chinese Growth for the World and African Leaders The international community in general and African leaders in particular can learn many lessons from the instructive and unique development experience of China:

For the World 1. The relationship between China and the World is changing (Fig. 71.2). China’s extraordinary and sustainable growth has created “jealousies” from close

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and distant neighbors. Today, this strength has become a weakness and the opportunity a real threat. Each actor has to manage uncertainty. 2. From above, China’s technology value chains will tend to be more and more globally integrated for more autonomy (the recent commercial tensions will the US has been a very instructive warning opportunity). 3. China’s consumption could offer opportunities to the rest of the world (provided that the new “win–win” and the “openness to the world” strategies become a reality and not a slogan and the related barriers are lifted or removed). 4. For researchers and politicians, the questioning of the Malthusian theory and of the demographic dividend concept, a long time recommended (or prohibited) in some parts of the world, mainly in Africa. How to explain that a country with nearly 1.4 billion inhabitants has become one of the world’s major economies today?

For African Leaders (Mainly) Nearly 60 years ago, China had a level of development just above that of the newly independent African countries. Today, the situation is different. What can we learn from it is the following: 1. The necessity to have a clear vision and a long-term strategy (drafted by a strong leader or a political party), to remain focus and the depth of the State’s internal structural reforms which allow resilience to the various international shocks. We can illustrate this reflection about China’s dazzling success with the words of the Chinese Ambassador in Mali: The first explication resides in the self-confidence of Chinese people. China knows where it came from and where it will go. For a giant vessel like China, it requires a clairvoyant, lucid, strong and determined captain. This captain, that is Chinese communist Party who maintains its orientation with a long-term strategy(more than 30 years even 50 years), and never gets loss in the multiple streams, despite the given lessons of all aspects and all the time. And all the sailors work hard with persistence and discipline under the execution of captain’s orders. The second explication resides in the logic of Chinese people who stay neither fixed nor confined. It has been 40 years since China has continuously deepened the policy of reforms and opening-up. The reform helped us to increase economic productivity and strengthen social cohesion.3

2. The importance of the cultural dimension and the effectiveness of the “discrete strategy/diplomacy” and the “silent advances” instead of the “siren drum” audible at thousands of kilometers. During time of “apparent peace” the effectiveness of a development policy is no longer necessarily measured by the number of tanks produced, but by the conquest of new market shares around the world. 3

Interview of the Ambassador, H.E., Zhu Liying, available on https://www.maliweb.net/internati onal/celebration-du-70eme-anniversaire-de-la-fondation-de-la-republique-de-chine-au-mali-entrois-generations-seulement-la-chine-est-passee-de-zero-a-la-deuxieme-economie-du-monde-284 0562.html.

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3. The existence of other models for successful development outside the current dominant models (Western, Chinese…) (“end of the unique model or single thought”. Each country must find its own development path taking into account its specificities. 4. The absence of a colonial past can be seen as an asset.

71.5 Road for Future Growth Chinese leaders have taken steps to boost domestic demand from its 1.38 billion people. A strong consumer market allows China to rely less on exports and it is diversifying into a more market-based economy. This means relying less on stateowned and more on privately owned companies to reap the rewards of a competitive environment. To boost growth, China needs more innovative companies. These only come from entrepreneurship. State-owned companies make up 25% of total industrial output, down from 75% in 1970. But China must do even better. China’s leaders realize they must reform the economy. To that end, they authorized the “Made in China 2025” plan, recommended advances in technology, specifically big data, aircraft engines, and clean cars. China has become a world leader in solar technology. It is cutting back on exports, including steel and coal production. China’s leaders now walk a fine line. They must reform to remove asset bubbles. On the other hand, as growth slows, the standard of living may fall. This could cause another revolution. People have only been willing to turn over personal power to the state in return for rapid increases in personal wealth. One way to boost wealth is by encouraging investment in China’s stock market. That allows companies to rely less on debt, and more on selling stocks, to fund growth. It also helps the tech companies that are listed on the Shenzhen exchanges. China recently installed the Connect program between the mainland exchanges and the Hong Kong stock market.

71.6 Next Strategic Challenges The pursuit of the “Chinese Dream” has become a guiding philosophy. It is in the first place a domestic vision. China cannot be great, after all, if is not strong at home. It is also intimately bound up with China’s place in the world. After years of preparing the ground, China is determined to take its place as a modern world power. The quest for “wealth and power” (fuqiang) has been a common refrain among political leaders and intellectuals since the 19th century. It is shorthand for “enrich the state and strengthen its military power” (Miller, 2019). The intention of the country is to “make more friends” and forge a “community of shared destiny” (mingyun gongtongti) for humankind. The goal is to create a web

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of formal and/or informal alliances lubricated by Chinese cash. As its neighbors and friends become ever more economically dependent on it, China believes its geopolitical leverage will strengthen. This new philosophy could be seen as a “peaceful rise” seeking to encapsulate the reality of China’s resurgence while reassuring the world that it remains a “benign power.” Do not be fooled by China’s strategy. China wants its economic growth to be “wealthy and strong” both at home and abroad. And as a great power, it must be an active participant in global affairs, helping to make the international rules, and exposing itself to many critics, including those from its friends and allies (Chinese neo-imperialism, invasion, threat …) and to the risk of falling into the trap of arrogance and boasting: a behavior contrary to Chinese culture. More soft power. Today, China must deeply explore how to operate or navigate in a highly uncertain environment. To succeed, the country must: . not succumb to the memories of lost greatness and engage itself in a logic of revenge of history . learn from your own mistakes and those of the last or current “masters” of the world . define long-term “aspirations” in and from China . share and translate into reality the philosophy of “Openness to the World with a Win–Win Strategy for a Community of Common Destiny” for smaller and emerging countries. There is little doubt that China’s “win–win” diplomacy, a formula repeated ad nauseam by Chinese foreign policy makers, is designed to serve China’s interest first . prioritize investment in line with this strategy . pay more attention to local context. Table 71.2 summarizes the ways to adapt to the environment, with domestic structural reform necessary to improve prospects for inclusive and sustainable growth in China. This policy will include skills and education, FDI, infrastructure and connectivity, green finance, trade, state-owned enterprises, land use, and innovation (OECD, 2019).

71.7 Conclusion Few men or organizations have the courage to establish a lucid list of risks they can run, disasters that can affect them. And even fewer create the conditions to avoid them or prepare to mitigate the consequences if they occur. Yet it is a very healthy exercise. It requires reviewing all scenarios, quantifying their likelihood as much as possible, reducing the likelihood of the less desirable, and the impact of their occurrence. “History tells us, however, that civilizations, nations, businesses, families... disappear when they combine pusillanimity, blindness, and procrastination. And that they need, to survive, to combine courage, lucidity and will” (ATTALI, 2019).

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Table 71.2 Strategy as a fit or plans to adapt to its environment Environment (rest of the world)

Strategy

China

1. Analysis of countries/industry dynamics

2. Formulation (Strategic choices)

3. Execution (Prioritize investment in line with strategy)

*What are the key external changes (political, economic, social, technological, environment and legal) and disruptions facing China? *How to analyze changes as opportunities or threats ? *What are the impacts on markets size, competitive pressures and the industry value chains ?

*Where (Skills and education, innovation, competition and trade, FDI openness, product and market regulation…) and how to compete (Set a long-term vision and new philosophy: more attention to local context, “A Community of Shared Future for Mankind” more credible “win–win” approach)? *How can China improve or transform its value propositions? *How to enhance long term profitability with sustained value capture ?

*How to identify and transform weaknesses into strengths ? *Which activities and (internal and external) resources (human, financial, technological…) are needed to support value creation and create superior financial performance? *Where China needs to cultivate agility and experimentation?

A country like China, a victim of invasion and colonization in the past, has in its gene Confucius philosophy and is available to defend the principles of peace, equality, respect, sovereignty, and non-interference in the internal affairs of others around the world. In an increasingly volatile world, cooperation and openness is needed. To transform the dream of “a community of common destiny” into reality, China must expose the core ideology (core values and core purpose) behind its vision which can hold the world together through times and make it very attractive and audacious. This vision, if implemented, could really transform the world. It’s imperative to establish a sense of emergency, form a powerful guiding coalition, communicate this vision, empower others to act on it, plan for and create short- term wins, consolidate improvements and institutionalize new approaches. Can the “lonely power” which persists in keeping its nose out of other countries’ affairs and respect the principle of non-intervention and non- alignment survive in a global world where problems easily cross borders? Today, China could be a source of reference at a moment when the world is turbulent, thirsty for a new source of hope and governance, and the respect of the principles of life, dictated by Confucius, will be more and more subjected to the test of globalization and openness to others. For African leaders, whatever its economic growth, the past of China should not be their future, but a source of inspiration. To win the bet of tomorrow, they must invest today.

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How to be “glocal” by becoming global and open to others and also remaining rooted in local context or culture? This is the new challenge for China as one of the “new masters or superpowers” of this world, more uncertain than ever.

Annex 1: Share of Global Growth of China, US and Germany Between 2000 and 2017

Annex 2: The OECD FDI Regulatory Restrictiveness Index

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Annex 3: Technology Market Share, in China and in the Rest of the World

1. 2. 3. 4. 5.

Based on 2018 or the latest available data. Compares local versus imported software development costs. Servers used for cloud storage purposes. Captures only industrial robots. China and rest-of-world market shares assumed to be equal due to data availability. Source Annual reports; Literature search; McKinsey Global Institute analysis.

Suggested Reading Attali. J. (2019), “Eloge de la lucidité”, La Chronique, Les Echos, des 6 et 7 septembre 2019. Guillemette. Y., and D. Turner (2018), “The Long View: Scenarios for the World Economy to 2060”, OECD Economic Policy Paper 22, OECD Publishing.

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Kotter. J.P. (1995), “Leading Change : Why Transformaion Efforts Fails?” Harvard Business Review, 150–157. MCKINSEY Global Institute (2019), China and the World : Inside : Inside the Dynamics of a Changing Relationship, Full Report, 168 pages. MILLER. T. (2019), China’s Asian Dream : Empire Building along the New Silk Road, ZED Books Ltd, London, UK. OECD (2019), OECD Economic Surveys: China, OECD Publishing, Paris. https://www.mal iweb.net/international/celebration-du-70eme-anniversaire-de-la-fondation-de-la-republique-dechine-au-mali-en-trois-generations-seulement-la-chine-est-passee-de-zero-a-la-deuxieme-eco nomie-du-monde-2840562.html.

Chapter 72

Multi-dimensional Modernisation: China’s Approach Ahmed Abdulkarem Abdulqader Saif

72.1 Theoretical Introduction Some countries have achieved development only and others modernisation, China with no doubt has successfully accomplished both development and modernisation in a process should be exemplified for other nations to emulate. The distinction, however, between both processes can be summarised as David Apter points out: Development, the most general, results from the proliferation and integration of functional role in a community. Modernisation is a particular case of development. Modernisation implies three conditions: a social system that can constantly innovate without falling apart…; differentiated, flexible social structures; and a social framework to provide the skills and knowledge necessary for living in a technologically advanced world. Industrialisation, may be defined as the period in a society in which the strategic functional roles are related to manufacturing.

A wide variety of terms have been used to identify the less developed countries “LDCs.” An earlier label “backward societies,” which revealed a colonial point of view and justified the white man’s mission to civilise others. With decolonisation, the term “emergent nations” prevailed, expressing the Western transcendence and superiority, as if these independent societies had no history. The term was replaced by “underdeveloped societies” which interpreted within the modernisation paradigm explicit these countries were still underdeveloped, but on their way striving to join

A. A. A. Saif (B) Sheba Center for Strategic Studies, Sana’a, Yemen e-mail: [email protected]

© Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_72

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the developed ones. With evolution of international organisational arena, an optimistic term was given “developing societies.” However, more recently the term “Less Developed Countries” LCDs has been prevalent in developmentalism.1 Another expression “Third World” that emerged as a third way adopted by AfroAsian countries showing their unbiased standpoint toward the two hostile camps led by the United States and the former USSR, which was realized into the non-alignment movement. This expression is also an implicit attempt to break out the assumption entails the necessary for every society to trace the path taken by the developed countries in order to be modernised, which requires us to identify modernisation. The distinction between traditional and modern societies was derived from Max Weber via Talcott Parsons. A society was called “traditional” in which most relationships were particularistic rather than universalistic (e.g. based on ties to particular people, such as kin, rather than on general criteria designating whole classes of persons); in which birth (ascription) rather than achievement was the general ground for holding a job or an office; in which feelings rather than objectivity governed relationships of all sorts (the distinction between affectivity and neutrality); and in which roles were not clearly separated, for instance, the royal household was also the state apparatus (role diffuseness vs. role specificity). A society in which the opposite of all theses was true was modern. Other features generally seen as characteristics of traditional societies, included things like a low level of division of labour, dependence on agriculture, raw materials, low rates of growth of production, largely local networks of exchange and restricted administrative competence. Again, modern societies displayed the opposite features.2

72.2 Chinese Miracle The failure of developmentalist strategies reflected in the growing of economic and technologic gap between the advanced countries and the LDCs, led in the 1960s and 1970s to shifts in theoretical orientation and terminology. Attention was deflected from traditionalism versus modernism to focus upon problems of particular society. Dependency theory stepped in to fill the theoretical void, which emphasised the subordination of the Third World within the capitalist world-system and determination of their fate by external forces by inequalities of economic and technological means.3 Lately, attention moved to a new pair of major concepts: core and periphery, this has become the most pervasive term in the literature of developmentalism used

1

Alavi, Hamza and Teodor Shanin, “An Introduction to the Sociology of Developing Societies,” in Springer, Studies. in Comparative International Development, vol. 17, March 1982, pp. 1-4. 2 Parsons, Talcott 1952, The Structure of Social Action, University of Colorado Press, pp. 58–67. 3 Alavi, Ibid. loc. cit.

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by both right and left critics. China in this perspective has successfully passed the bottleneck. The pervasive idea was the dichotomy traditional-modern. Assumption that all societies were alike and would pass through a series of changes toward modernity as had happened in the West. Paradoxically, the path of development in China refutes such argument and highlights the possibility of state’s role to be completely unlike the western experience. Another assumption that claims the social transformation and development are essentially referred to internal dynamics. This assumption of endogenous changes is partially inapplicable; the influence of advanced countries and the new international institutions is undenied. Barrington Moore represented such trend, who sees the route to modernisation: the classical bourgeois revolution which gives rise to democracy; revolution from above by reactionary alliance between landed class and a modernising elite, which gives rise to fascism; and revolution from below, in which a peasant revolt gives rise to socialism.4 Jaguaribe also presented three developmental models: the first, national capitalism, involves the modernising sectors of the national bourgeoisie and the middle class in alliance with the proletariat and the mobilised peasants against traditional sectors. The second model is the state capitalism, which involves the middle class with support of urban and rural masses against traditional elites. Here the state plays the major role in the economy with tiny margin to the private sector. The Third model is developmental socialism, where the intelligentsia is organized in a revolutionary party supported by party-controlled urban and rural masses.5 Having these three models in mind, we found China has adopted an eclectic approach that embraces all of them over different junctures of time, which resulted in creating an advanced sustainable development. This approach has spared the country paying the chaotic price of a sudden change. Such approaches of Moore’s and Jaguaribe’s are deterred by excluding exogenous variables. As Roxborough has noticed, neither purely exogenously determined models of changes are adequate, nor the purely endogenous ones. Rather a combine both endogenous and exogenous factors in a single integrated theory.6

72.3 A Successful Model Over the last seven decades, China has witnessed a radical changes that modernised her and put the country on equal footing with the most advanced states. One of the most important modernisation aspect is ending the poverty that struck the country 4

Barrington Moore, The Social Origins of Dictatorship and Democracy, Boston: Beacon, 1966, p. 23. 5 Jaguaribe, Helio, Political Development: A General Theory and a Latin American Case Study, Haper & Row, 1973, pp. 282–283. 6 Roxborough, Theories of Underdevelopment, London: Macmillan, 1979, p. 26.

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over the last 150 years since the Opium war by end of eighteen century till the Japanese occupation that ended by the end of the second World War. The epic of modernised China started with the establishment of People’s Republic of China in 1949. To demonstrate the multiple paths for modernisation that China has taken, we have to screen the meaning of development. Chilcote,7 however, has classified the literature on development into five categories. The first, represented by Almond and others, utilises the notions of democracy and political democracy and presented the concept of political system and levels of functions.8 A stage theory of development, modeled by Walt Rostow, attempts to demarcate a series of stages of development.9 Studies of this category, however, inspired the Anglo-American experiences. The second category focuses on concepts of nation-building. He studies combine nationalism and development, reflected the contemporary experiences of Africa and Latin America.10 Modernisation is the field of a third category. Marion J. Levy and David Apter represent this literature, where a structural functionalism model has been applied to a theory of modernisation. Apter emphasises two models of modernisation: the western democratic and the sacred collectivity models. He examines the characteristics of modernisation and tradition within a structural–functional framework.11 The fourth category includes studies of change. A good example of this literature is Samuel Huntington, where he emphasises the stability of the system. He claims that political decay and imbalance appear once mobilisation and participation takes place.12 Finally, works critical of ethnocentric theories of development. This literature sees underdevelopment in the Third World as consequences of development of capitalism in the advanced countries.13

7 Chilcote, M., Theories of Comparative Politics: The Search for a Paradigm, Westview Press, 1981, pp. 271–272. 8 Almond, Gabriel and G. Binghour Powell, Comparative Politics: A Developmental Approach, Boston: Little & Brown and Company, 1966, pp. 16–14. 9 Rostow, Walt, The Five Stages of Growth, 1960. He sees the transition from traditional to a modern society taking. place through five stages. He asserts that all societies pass through a single, unique sequence of stages. 10 For example see.. Karl Deutsch, 1953, Nationalism and Social Communication: An Inquiry into Foundation of Nationality. 11 Examples of these literature can be found in the works of Marion Levy, The Structure of Society, and David Apter, The Politics of Modernisation. 12 For this argument, see Samuel Huntington, Political Development and Political Decay, Cambridge University Press, 1965, pp. 386–430. 13 For example, see. Frank, Andre Gunder, Capitalism and Underdevelopment in Latin America: Historical Studies of Chile and Brazil, Hammonds worth: Penguin, 1972.

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Sustainable Growth Apart from Schumpeter,14 there was a great confusion or disregarding in the Western literature to draw a distinction between the development and growth, where they have been used nearly synonymously. Sayigh refers that, because the West had already achieved its political, social, and economic infrastructure as well as a well-equipped capital and technology base,15 maybe for this reason, western social thinkers have paid more attention to the economic figures as indicators for the degree of growth and development. In contrast, the LDCs are still lagging behind with distorted or incomplete political and socio-economic base and, for this reason, drawing a distinction between growth and development is necessary. Growth is usually measured by gross domestic product (GDP) expressed in the aggregate or per capita.16 Mistakenly, GDP is often used as an indicator of average social welfare, where growth can be achieved without change in sociopolitical factors, such as patterns of distribution of wealth and power. Criticisms have been raised of using GDP as an indicator. Firstly, GDP per capita offers no evidence on distribution. Secondly, the measure excludes non-marketed out-put, such as home production.17 Thirdly, using the official exchange rates for international GDP comparison makes further distortions in the real values for money and goods.18 Finally, GDP gives misleading concept in the rentier economies, where most of GDP is not income, but liquidation of capital, which most of this revenue is not that income can be sustained overtime.19 However, some economists, like Kuznets, have paid attention to the importance of achieving economic progress, concomitantly, with socio-political development. He defined a country’s economic growth as a long-term rise in capacity to supply increasingly diverse economic goods to its population, this growing capacity based

14

Schumpeter had attempted early last century (1911) to draw a clear distinction between economic growth and development. According to him, growth consists of a gradual process of expansion of production, producing more of the same, and using the same methods in order to do so. Development in contrast, consists of the carrying out of new combinations of productive means, composed of production of existing and new goods, or new sources of supply and opening markets up. In each case innovation is entailed. For more details, see J. A. Schumpeter, The Theory of Economic Development, New york: Oxford University Press, 1961, pp. 66–78. 15 Sayigh, Yazid, “Gulf Crisis: Why Arab Regional Order Failed?,” International Affairs, vol. 67, issue 3, July 1991, pp. 6–8. 16 Richards and Waterbury, A Political Economy of the Middle East, 1996, Westview Press, p. 10. 17 Richards and Waterbury, A Political Economy of the Middle East, 1996, Westview Press, pp. 10– 11. 18 See the example has been used by Richards and Waterbury, Ibid., p. 11. Where using official exchange rates to compare incomes across countries ignores the differences of prices of non-tradable goods (e.g. housing and haircuts) in relation to that of tradable goods (e.g. wheat and cars) which is lower in LDC’s than in the developed ones. 19 Ibid. p. 12.

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on advancing technology and the institutional and ideological adjustments that it demands.20 By contrast, the development as a process can be identified as a complementary and accumulatively evolution of political, social, and economic processes. Sayigh has put it succinctly: the development can be identified by a sequential incrementation of particular societal characteristics and by continuity which can not materialize without important changes occurring previously or concurrently in the technological, social and political frameworks, in addition to the economic framework itself.

Accordingly, this is exactly what China has done, a comprehensive incremental development. The GDP has annually risen roughly by 8% that allowed to help 750 million people to transcend the line of poverty between 1987 and now. The successful implementation of reform policies resulted in dramatic reduction of poverty from 97.5% to only 3.1% on the road to announcing China free of poverty in 2030. The great Chinese progress in agricultural and industrial sectors has changed pattern of world trade that enhanced by launching the Road Belt Initiative (BRI), where China was able to develop its infrastructure to most advanced one and also contributes to helping the countries along BRI to develop theirs.

Counter Desertification and Environment China has recorded a historical change in expanding the green areas and stop desertification with annual average of 10,400 km2 by end of the last century and this continues today by 2400 km2 each year, in which achieving an early target sets to be done by 2030. Today, to maintain a clean environment, China is among the highest energy producers using solar and wind power. It introduces over 18,000 mw each year from windmills only.

Increase Life Span The single child policy put a great challenge in the future because of increasing the life span due to a great improvement in healthcare, where the average age jumps from 35 years in 1949 to 77 years in 2018. In spite this has controlled the population growth but on the other hand resulted in aging society, in which will have shortage in young working class. In addition, will burden extra costs on the state providing care for elderly people. However, the government has launched a second child policy to overcome this predicament, nonetheless; Chinese are refrain from having the second child where most parents are inclined to invest in one child to be able to provide a 20

Kuznets, 1973, “Modern Economic Growth: Findings and Reflections,” The American Economic Review, vol. 63, no. 3, June 1973, pp. 247–258.

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good health care and excellent education because of the sharp increase in educational and health costs. Moreover, parents are usually busy in their jobs and have not much time to allocate for a second child.

Big Educational Leap From the very advent of the People’s Republic of China, the leadership has realised the importance of an advanced and modern educational system to bridge the gap with the future. Seventy years later this target has been achieved with a remarkable success. Today, the government sponsors a comprehensive scholarship program sending students to the most international leading universities around the globe. Internally, there is more than one Chinese university amongst the top 50 in the world. One of the most notable achievement is the investment in the technology and artificial intelligence that resulted in an unprecedented educational boom. Today, Chinese universities and colleges not only accommodate locals but have become the main destination for many overseas students, which helps in spreading a global desire to learn the Chinese language that is expected to be among the top universal languages soon.

Services Industry Over the last seven decades the services industry has been grown to be the biggest sector in the Chinese economy today, where the added value has been risen from 19.5% in 1952 to 46.9575 trillion yuan in 2018 with an annual growth 8.4%. Services industry has contributed an accelerating growth to GDP to reach 59.7% in 2018 and constituted 68.1% of the foreign investment in the same year. This makes services industry the most favored sector for the foreign investment. The people involved in this sector have reached 360 million employees by the end of 2018, and in this respect is considered the biggest employer in the country.

Space and Technology Chinese achievements in space are multiple. A new space station has been launched which is advanced as much as NASA and inaugurates a program exploring the moon with a very developed satellite for this purpose. China has also got the super fastest computer in the world. On the other hand, airplane C919 has been released and introduced to the service. China has also been operating a FAST Telescope with a diameter of 500 m, which makes it the biggest in the world. Moreover, Chinese

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Dragon submarine was sent to deep water to reach a new record of 7000 m under water. In addition, a fastest train in the world, “the Bullet” has been entered into service with a speed of 350 km/h. Bridge of Hong Kong-Zhuhai-Macao has been also been launched to become the longest bridge worldwide of 55 km bridge-tunnel system consisting of a series of three cable-styled bridges, an undersea tunnel and four artificial islands. It is both the longest sea crossing and the longest open sea fixed link on earth. Many other mega projects have been launched that go beyond the scope of this paper.

72.4 Conclusion The pervasive idea was the dichotomy traditional-modern: the assumption of all societies were alike, and they would pass through a series of changes toward modernity as had happened in the West. Paradoxically, not all pre-capitalist societies are alike, feudal are different from tribal ones, also exogenous factors nowadays are quite different from those faced feudal Europe in the fifteenth and sixteenth centuries. The most common feature in the LDCs is the dualism in which capitalist sectors co-exist alongside pre-capitalist sectors, whereby the latter have been exploited and served the formers, and whole process is irrelevant to the real national interests. Another assumption that claims the social transformation and development are essentially referred to internal dynamics. This largely has been the case in China. Though the influence of advanced countries and the new international institutions is undenied, but the route to modernisation and development in China has been always from above. Recently, it is worth noting that the national capitalism involves the modernising sectors of the national bourgeoisie and the middle class in alliance with the proletariat and the mobilised peasants against traditional sectors. It goes along with the state capitalism, which involves the middle class with support of urban and rural masses against traditional elite. Here the state plays the major role in the economy with tiny margin to the private sectors. This model is developmental socialism, where the intelligentsia is organised in a revolutionary party supported by party-controlled urban and rural masses. With regard to the case study of this research, the developmental theories have been sketched would not have been accepted nor objected, either singularly or collectively. Instead, an eclectic conceptual framework would be built up, deriving concepts and ideas whenever seen useful as a tool-kit. Proceeding with this choice, China has successfully presented its miraculous model.

Chapter 73

State Capabilities, Inclusive Development and Multipolarity: Toolkit of Public Policies for Argentina and Latin America Countries from the Analysis of the China Case Gonzalo Diéguez

China has carried out in the last decades the greatest economic revolution in the history of mankind. Never has a population so intensely changed their material living conditions in such a short period of time (Winters L.A. and Yusuf, S., 2007). Its economic revolution is synthesized in the average annual growth rate of 10% achieved in this period. Chinese economic growth has been based on exports and investments. Now there is a change in the model, necessary so that China’s economy can maintain a balanced and sustained growth in the long term. This rebalancing of the economy has wide consequences, not only in China but especially on the international economy. In the latest 35 years China has dedicated more than 40% of its GDP to investment. Industrial production accounts for almost 50% of that GDP, while services do not reach 40%. The household savings rate is very high, while consumption accounts for 35% of GDP (World Bank, 2020). This structure of the Chinese economy is related to some of the issues that cause friction in its international economic relations. China has produced much more than it has consumed, and the difference has been destined for export. In this way, it has obtained high trade surpluses with numerous countries, which have caused discontent and conflicts with other economic powers. With the reform process of the last 30 years, the Chinese economy has been profoundly transformed, and it has also changed its relationship with the outside world in multiple ways. One of the most important is that China has become a leading source of financing for the rest of the world, including industrialized countries and also Latin American countries (Winters L.A. and Yusuf, S. op. cit pp 208). G. Diéguez (B) Public Management Program, Center for the Implementation of Public Policies Promoting Equity and Growth, Buenos Aires, Argentina e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_73

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The key question that is posed for the global future is whether China will be able to maintain the impressive growth rates it has achieved in the last three decades. Is it reasonable to think that the Chinese economic miracle will remain in the future? Logically, it will not necessarily be with the same growth rates, but it looks reasonable that they will still be very high anyway. In this optimistic forecast there is a fairly widespread consensus between international organizations and analytical companies that have made long term forecasts on the evolution of the world economy (World Bank, 2020, opc cit pp 67). To cite an example, differents consultant as PriceWaterhouseCoopers (PwC) and McKinsey (2015) foresees, in a well-known prospective studies, that by 2050 the Chinese economy will be the world’s first in size and superior to the US by 29%. The PwC calculations are based on the fact that the Chinese economy will maintain an average growth rate of 6.8% in the coming decades, which will allow per capita income growth of more than 4% per year. This way we can identify and list 8 factors on which China’s economic growth and inclusive development has been based. These 8 components that I am going to list below become especially strategic at a time of carrying out an analysis compared to the growth and development patterns present and absent in the 23 countries of Latin America and the Caribbean. These key factors are as follows: 1. Availability of abundant and qualified workforce China has highly-skilled labor, on the basis of which there is already an important development of high-tech industries (and their exports). 2. A growth model “open” to external relations The growth model of the Chinese economy has been oriented abroad, towards integration into the international economy. 3. The progressive development of market forces The reform policy has driven decisively, although gradually and prudently, the liberalization of the economic system and the progressive implementation of market forces, which has been a powerful instrument to achieve greater efficiency and high growth. 4. An institutional framework favorable to economic growth and business This framework is configured by various elements: A favorable and positive atmosphere towards business, both in government and in society in general and also an attitude favorable to consensus and negotiation. It is a cultural feature traditionally attributed to Chinese society, which has had a favorable influence on the business development framework.

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5. Political and social stability The political risk indicators developed for China are generally favorable. Social conflict is relatively low although it has increased in recent times. 6. A process of gradual reforms of the main public policies implemented This strategies devolped which has avoided convulsions and high social costs has had key implications for public governance and sustainability. The experience and lessons learned from the China case are an excellent example of thinking about a framework benchmark and planning an inclusive development strategy in the case of Argentina and the 22 countries that make up the Latin American and Caribbean región. In the last 50 years several studies showed with empirical data the critical incidence over the economies of Latin American countries which are exposed to fluctuations in the value of its main export products. The main limit continues associated to it economical structures that show lower levels of diversification (Ivanic & Martin, 2014; Ha et al., 2019; World Bank, 2011). Capital goods and intermediate inputs need to be imported at the moment to expand development strategies sustainable in the long run. But the main way to achieve economic growth, external balance, and a favorable evolution of the living standards of society as a whole requires the sustained increase in systemic productivity. There are many empirical studies which corroborate that improvements to productivity is a key factor in the competitiveness of an economy (Aizenman & Ito, 2008; Charnavoki & Dolado, 2014; World Bank, 2020). In the current global economic scenario, the growing demand for foreign exchange that requires an increasingly interrelated productive system with the world demands that this effort be even greater. Moreover, we have to consider that the future global scenario is highly competitive, organized in global value chains where the location of production is subject to permanent changes and where the bulk of trade flows within the framework of preferential agreements. If the political authorities in Argentina do not interpret properly the phenomena that are occurring in the international economy, the price of productive, technological, and knowledge isolation can be very high. This means the chances of achieving a sustained development will be reduced critically. The China case shows that an improvement in the standard of living and social inclusion are practically impossible without a modern, dynamic, competitive, and inclusive productive structure in which market signals and policy initiatives are coordinated and complemente each other. With adequate incentives and regulations sponsored by the State, private initiatives play a most important role in sprurring innovation and building business dynamism. It is essential for the development process (Mazzucato, 2014).

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The strategic government action leading the state machine is another key and critical component of the inclusive to provide development strategy. At the end of the day, that means state capabilites. In this sense, I could identify four strategic components to promoting an inclusive development strategy both in Argentina and in the countries of the LATAM region. (I)

An institutional framework by defining new rules of the game consistent with the development strategy including a State reform process that progressively rebuilding its structure and recovers its main functions, eliminating political discretion, and restoring professional bureaucracies. (II) An ambitious infrastructure plan sponsored by the public sector but mainly supported by strategic participation of the private sector in a coordinated strategy of public–private programmes (III) The establishment of adequate policy incentives for the expansion of the most competitive productive sectors. (IV) A substantive change in the international insertion strategy that drives multilateral, regional and bilateral negotiations. To conclude this presentation, I would like to emphasize once again the importance of analyzing in an exhaustive and comparative perspective the main characteristics of the production model and the development strategy promoted by China among other countries in the Asia–Pacific region. It could offer lessons about growth experiences and inclusive economy to Latin American democracies. Specially for the 23 countries that make up the Latin American and Caribbean region, the region that shows the greatest levels of inequality in the world.

Suggested Reading Aizenman, J., M. D. Chinn, and H. Ito. (2008). “Assessing the Emerging Global Financial Architecture: Measuring the Trilemma’s Configurations over Time.” NBER Working Paper 14533, National Bureau of Economic Research, Cambridge, MA. Moneta, C. and Cesarini, S. (2005). “China y América Latina nuevos enfoques sobre cooperación y desarrollo ¿una segunda Ruta de la Seda?” 1° ed. - Buenos Aires: BID-INTAL. ISBN 950–738– 221–6 Charnavoki, V., and J. Dolado. (2014). “The Effects of Global Shocks on Small CommodityExporting Economies: Lessons from Canada.” American Economic Journal: Macroeconomics 6 (2): 207-237. Ha, J., M. A. Kose, and F. Ohnsorge, eds. (2019). Inflation in Emerging and Developing Economies: Evolution, Drivers, and Policies. Washington, DC: World Bank. Ivanic, M., and W. Martin. (2014). “Short- and LongRun Impacts of food Price Changes on Poverty” Policy Research Working Paper 7011, World Bank, Washington, DC. Mazzucato, M. (2014) The entrepreneurial State, Debunking the Public vs. Private Myth in Risk and Innovation, London, DEMOS http://demos.co.uk/publications/theentrepreneurialstate Mc Kinsey Global Institute. (2015). The China Effect in Global Innovation, Beijing, Mc Kinsey Global Institute, Julio, available on http://www.mckinseychina.com/wp-content/uploads/2015/ 07/mckinsey-china-effect-on-global-innovation-2015.pdf)

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Winters L. Alan, & Yusuf Shahid. (2007). Dancing with Giants: China, India and the Global Economy, Singapore. World Bank and the Institute for Policy Studies (IPS) World Bank. (2011). “Responding to Global Food Price Volatility and Its Impact on Food Security.” World Bank, Washington, DC. World Bank. (2020). Global Economic Prospects, June. Washington, DC: World Bank.

Chapter 74

The Balancing of Political Powers: The Case of Chinese Modernization Mohd Aminul Karim

74.1 Introduction A great transition—as part of the cycle of history–is underway making much shift in the balance of power. The South China Sea (SCS), the East China Sea (ECS), the Bay of Bengal, the Western Pacific, the Indian Ocean, the Malacca Strait, nuclear Kashmir, etc., are the flashpoints with potential to ignite this game to reach an almost unmanageable level. Important and critical sea lanes of communication are tangled here where substantial merchandize pass through. These, then, turn out to be vital national interests to the actors as energy coming from the Persian Gulf are critical for the sustenance of the economy and development of countries such as China, India, Japan, South Korea, Australia, and the United States, etc. Despite being an extra-regional power, the United States has, in fact, residence status with huge national and international clout to call the shots at almost every nook and corner, even to this day, after having fought disastrous wars in Iraq and Afghanistan. That said, because of the financial recession that plagued this nation in 2008–2009 and its recent deep involvement in the wars with Afghanistan and Iraq as mentioned, the United States seems now inclined to coil back to keep its own house in order. Besides, there has been stellar rise of Chinese economy and military for the last two decades. It has a huge currency reserve—disposal money—that propels this country to launch a grand geo-economic-strategic project—called the Belt and Road Initiative (BRI) and, as a corollary, Maritime Silk Road (MSR)—to attract its neighborhood and beyond through connectivity, trade facilitation, people-to-people contacts, economic cooperation and so on. “BRI is conceived with the objective of

M. A. Karim (B) Independent University of Bangladesh, Dhaka, Bangladesh e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_74

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widening China’s international support base through economic statecraft…this is one central feature of Beijing’s foreign policy.”1 If it succeeds, it may ultimately exclude the United States from the region. However, China is facing hiccups in its implementation as the latest trends suggest. That said, the US has launched a more confrontational strategy, first on the notion of “Rebalancing to Asia” under President Obama, and then on “enhancing quadrilateral cooperation (the “Quad”) in the Indo-Pacific” by the Trump administration, basically to balance China’s rise.2 Such trends are obviously giving rise to a polarization of forces. There are intractable, historically rooted inter-country issues and disputes between the countries of the region. Over and above these, nuclear issues are also afflicting these countries. Some are already declared nuclear-armed, some are on the way to becoming and some aspire to become in case there is a need to ensure predominance. All these variables tend to give rise to complex scenarios difficult to tame by traditional and rule-based order. Traditional rule-based orders are seemingly getting watered down. There are gigantic efforts by China to replace those, especially in the economic domain and governance. Interestingly, Japan has also gotten involved in disputes in the SCS, apart from the ECS and Taiwan, China, especially after it signed the new guidelines on defense collaboration with the United States. As part of this, Japan’s scope of operation has now expanded to cover both Taiwan, China, and the SCS. Japan is bent upon playing at least a balancing role. Japan even has deep strategic, civilian nuclear and economic cooperation with India. India also has interests in East Asia, especially in the SCS and the Malacca Strait. So, it has now launched Act East Policy, a more dynamic and action-oriented strategy. As a case in point, the case of the SCS stands out clearly, at least at this point in time, as the United States, the most powerful military in the world, has got thornily involved with its best possible spears and shields operating in the Sea round-theclock with the slogan of freedom of navigation, unimpeded commerce, and freedom of overflight as articulated by the American Secretary of State in 2010. But this is coming at odds with the next most powerful military i.e., of China, also with its best possible spears and shields may not be that sophisticated as that of the United States. But China has the inherent advantage of proximity to its mainland. Notwithstanding the power-gap existing between the United States and China, the rising power is tending to continuously catch up. In fact, such changes are constantly evolving because of the volatility of power-weight age (comprehensive national power, or CNP), particularly economic power. Put together, it is the CNP which is applied to realize the grand-strategic objectives of the actors which then trigger a different bout of balancing.

1

Benjamin Tze Ern Ho, “PRC Turns 70: Five Elements of its Grand Strategy,” RSIS Commentary, 30 September 2019. 2 Muhammed Saeed, “From the Asia–Pacific to the Indo-Pacific—Expanding Sino—U.S. Strategic Competition,” China Quarterly of International Strategic Studies, 3–4, pp. 499–512.

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The transition theory, as was applied after the Second World War between the United Kingdom and the United States, may not be similarly applied here because orientation, culture, history, context, ideology, the urge for more CNP were different. In the world today and in East Asia in particular, probability of a war breaking out between the two major powers may not be ruled out. The US Department of Defense has categorized China as a potential and direct threat in its annual military report. The report submitted to the US Congress also suggested a policy of forging alliances with other Asian countries as part of its strategy of preemptive containment with United States acting as an offshore balancer to jointly oppose and isolate China.3 Both the US 2017 National Security Strategy and the 2018 National Defense Strategy target China as the key objective/rationale for strengthening the U.S. military forces and single it out as America’s primary strategic competitor. The White Paper on China’s National Defense in the New Era, published in July 2019, signals the fact that the United States and China are now competing superpowers, and that China’s growing military power can challenge the United States.4 It clearly discerns Chinese leadership, and its military should be aware of such a perception held by still the largest military of the world. More so, Chinese are very proud of their heritage and grandeur that they had displayed during the different periods of different dynasties. The Chinese are also great player in balancing game or in real politics. On April 21, 2006, former Chinese President Hu Jintao mentioned its proud historical context5 . In a history that spans more than five millennia, the Chinese nation has contributed significantly to the progress of human civilization. But its course of national development has been an arduous one. In particular in the 160 years and more since the Opium War in 1840, the Chinese people have fought courageously and unyieldingly to rid themselves of poverty and backwardness and to realize national rejuvenation, thus profoundly changing the destiny of the Chinese nation. Few of the examples from its recent military history may amplify these strategic goals. China is more of a civilization, as Lucian Pye tends to suggest. This age-old civilization has its intrinsic strength and resilience. Its inherent value-system is robust but while it is trying to woo over the foreign nations, they need to disseminate its values more appropriately and cordially. It seemingly needs to play its smart power in a more nuanced way. It has overwhelming economic power. Technologically and military power-wise, China is catching up greatly. This paper attempts to study its military components–as part of its modernization program–of its comprehensive national power. That said, the paper will also touch 3

Michael T. Flynn, Annual Threat Assessment, Washington DC: Defense Intelligence Agency, 2014; Office of the Secretary of Defense, Annual Report to Congress: Military and Security Development Involving the People’s Republic of China, Virginia, Arlington: US Department of Defense, 2015. 4 Anthony H. Cordesman, “China’s New 2019 Defense White Paper: An Open Strategic Challenge to the United States, But One Which Does Not Have to Lead to Conflict,” Working Draft, Center For Strategic and International Studies (CSIS), 24 July, 2019. 5 Please see “ Speech by Chinese President Hu Jintao at Yale University,” http://ph.china-embassy. org/eng/xwdt/259486.htm, searched date: 1 May 2019.

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on its economic and value power to show their causal effects. The paper follows content-analysis and observation.

74.2 Great Wall Spirit Dr. Mohathir had once said6 : China has never invaded Malaysia before. They have expanded into Vietnam once, but that has already stopped. When compared to western colonial policies, the Chinese mentality cannot be regarded as warlike. This is an era that focuses on market economy. I do not believe that China has any plans for invading Japan or other neighboring countries.

Matteo Ricci, the Italian Jesuit, also described the peaceful nature of the Chinese in the following words: “They are completely satisfied with what they own and do not seek conquest.”7 This was even further reaffirmed by Henry Kissinger in his masterpiece On China8 : The territorial claims of the Chinese Empire stopped at the water’s edge. As early as the Song Dynasty (960–1279), China led the world in nautical technology; its fleets could have carried the empire into an era of conquest and exploration. Yet China acquired no overseas colonies and showed relatively little interest in the countries beyond its coast. It developed no rationale for venturing abroad to convert the barbarians to Confucian principles or Buddhist virtues.

When all is said and done, the Chinese seemingly follow the Great Wall Spirit that includes the principles of peaceful co-existence, defensive retaliation, and securing long-lasting peace. These principles basically trigger its defense policy or military doctrine. These principles tend to showcase Chinese resolve, its desire to seek longlasting peace and peaceful neighborhood. Chinese civilization is generally capable of co-existing peacefully with its neighbors. As Dr. Mahathir points outs China does not harbor any ambition of territorial conquest unless it feels its core national issues like the SCS, Taiwan, the ECS, Tibet, Korea, etc. are threatened. Mao Zedong once said: “We will not attack anyone who does not attack us. If invaded, we shall retaliate. China will not make the first strike. No one is allowed to mistreat us.”9 Both Vietnam and Korea are China’s close neighbors. History shows it does not intend to annex them. It is ostensibly its Great Wall spirit that propels China to carry out limited military incursions in these countries basically to teach a lesson to Vietnam 6

See Mohathir Mohammad, “ cheng: xian zai shi xi qu ri ben xun de shi hou” (Mohathir Mohamad says that it is time to learn the lesson from Japan), Zhongguo wang, china Net, 19 October 2019, http://www.china.com.cn/international/txt/2013-01/17/content_27712455.htm, searched date: 1 October 2019. 7 Leften Stavros Stavrianos, Quan qui tong shi (A Global History), Wu Xiangying and Liang Chimin trans., Shanghai: Shanghai Academy of Social Sciences, 1999, p. 14. 8 Henry Kissinger, On China, Penguine Books, 2012. 9 Hua Li, “1959 nian zhong yin bian jie chong tu yin ji su lian fan ying tan xi” (Analyze the Causes of Sino-Indian Border Conflict and Soviet Reaction in 1959), Party Literature, 2 (2002), p.64.

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and the United States. Here presumably egoistic or chauvinistic nationalistic fervor might have worked. It is also true in respect of India when it fought a limited war in 1962 along the McMahon Line in the Arunachala Pradesh in India which China claims to be its own territory. China made an inside incursion into Indian territories, as the Indians suggest, but withdrew back voluntarily. Here China followed the principle of securing lasting peace. Mao clearly expressed: “We prefer peace compared to war. If we are faced to fight, then we should at least secure 30 years of lasting peace along the Sino-Indian border.”10 In applying the principle of defensive retaliation typically means if anyone invades the Great Wall or its borders, or invades an ally of China, China shall dedicate its forces to retaliate and protect itself and its allies. This is how China played out in the Korean War, the Sino-Soviet conflict over Zhenbao Island, and the Vietnam War according to the principle of defensive retaliation in response to US or USSR incursion of the Great Wall or a neighboring country.

74.3 Modernization Drive Chinese nationalism aims to regain confidence through its modernization drive, especially economic and military. David Shambaugh gives his perspective on Chinese modernization drive: “Over the past 150 years this continual drive for modernity has tied generations of Chinese together and has been the core common strategy in China’s approach to the world.”11 Tellis proposes a thesis that China’s last twodecades-old military modernization has greatly contributed to dramatic shifts in the Asian balance of power. He is candid, “the United States has lost the easy escalation dominance that it enjoyed over China’s nuclear forces as recently as a decade ago.”12 Having said this, let us examine the modernization drives that China undertook in the late 1970s that include military modernization apart from others. Deng Xiaoping, the great reformer, made a paradigm shift in its modernization drive by opening its economy. The command economy was replaced by liberal and market economy. The economy that started surging over the decades, with high growth rates every successive year, brought about sea changes in the socio-economic condition of the people. China was resolute in coming out of the Century of Humiliation (1840–1950) and secure its rightful place in the community of nations. It has greatly succeeded in

10

Xue-jun Wang and Li-bin Zhao, “tou xi 1962 nian bian jing zi wei fan ji zhan ben zhi” (Analyze the Nature of the Political Warfare of Self Defense of China India Border in 1962), Theory Journal, 3 (March 2012), p. 105. 11 David Shambaugh, “Thinking about China’s Future,” The International Spectator: Italian Journal of International Affairs, 47–2 (June 2012), pp. 18–23. 12 Ashley J. Tellis, “Overview –Uphill Challenges: China’s Military Modernization and Asian Security,” in Ashley J. Tellis and Travis Tanner, ed., Strategic Asia 2012–2013—China’s Military Challenge, Seattle and Washington, D.C.: The National Bureau of National Research, 2012, pp. 218–142.

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such efforts. As spelt out by Deng, defense was the fourth of China’s much vaunted “four modernizations” after agriculture, industry, and science.13 Hu Jintao, President of China and Chairman of Central Military Commission in 2004, gave his doctrinal directive, which seems still valid today: “Understand the new Historical Missions of our Military …which put forward a much more variegated set of military missions, including maritime security, space security, and cyber security.”14 The 2019 China’s National Defense in New Era outlines a perspective plan for China’s military modernization: “achieve mechanization by the year 2020 with enhanced informatization, to comprehensively advance the modernization of military theory and organization, and complete modernization of national defense and the military by 2035, and to fully transform the people’s armed forces into world-class forces by the mid-twenty-first century.”15 Military modernization for any country is a function of its national aspirations and its resources, mainly its economic, technological and manpower. You need the combination of all the factors. Given the resources and aspirations, it is generally the size and continued growth of GDP that determine such a build-up. Economic development is considered as complementary to national security and major determinant to rise and fall of great powers.16 Militarily China realized that it—especially after the First Gulf War, called sui generis, and some experts say after the Vietnam war of 1979, the Gulf War, sustained airpower employed by NATO forces against Serbia in 1991, and missile-launching exercises across the Taiwan Strait in 1995 and 1996—needed a thorough overall of its military specially upgrading its technology and sophistication [implying Revolution in Military Affairs (RMA)].17 As a case in point, the highly sophisticated anti-ballistic missile defense system—some argue this is also an offensive weapon—of the United States threatens the deterrence capability of China’s ageing nuclear capability. It is understood China has greatly upgraded the effectiveness of its nuclear weapons. Its most notable ICBM today is the DF-41 with an estimated range of 12,000– 15,000 km. This is China’s first road-mobile missile—less vulnerable to pre-emptive strikes—that could hit any part of the United States. These missiles can also be launched from China’s Jin-class nuclear submarines. China has put six such submarines into service over the past four years. This gives China second- strike capability. That said, it can “at best attack” Seattle. China is developing new missiles and submarines to overcome this limitation. China’s DF-17 hypersonic glider is designed to fly at the atmosphere’s outer edge at over five times the speed of sound. “The DF-17 could carry nuclear warheads or destroy targets by smashing into them”. 13

Paul Kennedy, The Rise and Fall of the Great Powers, New York: Vintage Books, p. 454. Hu Jintao quoted in David Shambaugh, China Goes Global: The Partial Power, New York: Oxford University Press, 2013, p. 279. 15 China’s New 2019 National Defense White Paper, Beijing: International Office of the State Council of the People’s. Republic of China, 2019. 16 Renato Cruz De Castro, “Confronting China’s Charm Offensive,” Issues and Studies, 45–1, March 2009,: pp. 71–116. 17 Mohd Aminul Karim, “China’s Power Politics and Modernization, Implications for Taiwan and the South China Sea”, Pacific Focus, XXIX-2, August 2014, pp. 188–210. 14

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President Xi certainly made it clear—during its grand parade showcasing cuttingedge technologies in Beijing on 1st October 2019 marking seventy years of communist rule—what the United States was supposed to hear and make sense of it: “No force can ever shake the status of China or stop the Chinese people and nation from marching forward.”18 According to the Stockholm International Peace Research Institute, China ranked second in military expenditure in 2016 with USD 215 billion budget, which is a 5.4 percent increase from 2015. This expenditure is higher than the combined expenditure of India (USD 55.9 billion), Japan (USD 46.1 billion), and Australia (USD 24.6 billion).19 Liff and Ericson conclude China’s GDP size will surpass that of the United States, quoting the US National Intelligence Council, in PPP terms in 2020, and in market exchange rate near to 2030. Its GDP is growing by leaps and bounds although of late it is showing downturn trend that hovers around 6%. That said, China’s defense expenditure is sustainable, at least up to that time.20 Harsh Pant observed that China’s military power is expanding beyond the East and South China Seas, as is generally believed.21 Its naval power is creeping forward into the wider Pacific and the Indian oceans. From the time President Hu Jintao called on China in 2012 to become a maritime power to the announcement of the ambitious plan of “Made in China 2015,” China’s maritime prowess has been growing at a phenomenal pace. Chinese are bent on developing a “national development strategy to exploit, utilize, and protect the seas and oceans, and build China into a maritime power.”22 In 1420, China’s Ming navy possessed 1350 combat vessels, including 400 large floating fortresses and 250 ships meant for long-range cruising. Why such a massive force got decimated is another history.23 China’s 863 Program, meant for development of dual-use technologies both for the civilian and military fields, caters for potent technologies. The most striking feature of Chinese civilization must be its technological maturity. In the later decades of the eleventh century there was a huge iron industry in north China, producing around 125,000 tons per annum, mainly for military and government use. It was far larger than the British iron output in the early stages of Industrial Revolution.24 China’s Shenguang (Divine Light) laser project is likely to accelerate China’s next 18

“Military Technology—Opening the Arsenal—Weapons Paraded in Beijing were Designed to Make Americans Tremble,” The Economist, October 5th–11th 2019. This missile can carry many decoys or, as is rumored, up to ten warheads–-each to maneuver independently after re-entering the atmosphere. 19 Stockholm International Peace Research Institute, “World Military Spending: Increases in the USA and Europe, Decreases in Oil-exporting Countries,” April 24, 2017. 20 Adam P. Liff and Andrew S. Ericsson, “Demystifying China’s Defense Spending: Less Mysterious in the Aggregate,” The China Quarterly (March 2013), pp. 1–6. 21 Pant, Harsh, “China’s Rising Naval Power Means Trouble for India,” Observer Research Foundation, April 28, 2017. 22 McDevitt, Michael, “Beijing’s Dream: Becoming a Maritime Superpower,” The National Interest, July 1, 2016. 23 Paul Kennedy, The Rise and Fall of the Great Powers, New York: Vintage Books, p. 6. 24 Ibid, p. 6.

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generation thermonuclear weapons and directed energy laser weapons program. China’s next-generation Beidou Satellite Navigation System is likely to enhance the PLA’s global navigation, tracking and targeting capabilities, and provide guidance for military vehicles, ballistic and cruise missiles, precision-guided munitions, and unmanned aerial vehicles. Beidou-2 plans for at least five geostationary and 30 non-geostationary satellites by 2020, providing global coverage.25 Today China has an expanding space science program. The human spaceflight program will soon reach the Moon, and a robust military space program that tested a ground based ASAT in 2007 by destroying one of its own defunct satellites in a high-altitude orbit. The US military perceives the resurgent Russian space program as a threat, and the maturing of China’s space program. China, since the 1990– 91 Gulf War, has been bent on not allowing the United States to get so far ahead technologically. Worryingly, President Trump has directed his military command to go for a space force.26

74.4 Reflections China needs to cultivate better its tactfulness, teambuilding, trust-building, display of natural leadership, and soft skills, etc. to pilot its foreign policy objectives more effectively. China seemingly needs to play its smart power better. It should play its value warfare in a more subtle and non-evasive way. China needs to put in more concerted efforts to keep its economy vibrant at least for the next three decades to achieve its political, military, diplomatic, and BRI objectives. China has to keep its own house united as one entity (there may always be some internal hiccups here and there being a continental-size country) by further cement the CCP’s political rule. Its rich internal civilizational values may be better harnessed and utilized. It also needs to harmonize both its internal and universal values. Having said so, China is very much on course. Military modernization should be carried out in a sustained way in order to recover its central place in the comity of nations. It should add to its deterrent- value by, however, inducting more quality.

25

Michael Raska, “China’s (Secret) Civil-Military Megaprojects,” RSIS Commentary, 2 September 2013. 26 Joan Johnson-Freese, “The Next Race: The Geostrategic Contest in Space,” RSIS Commentary, 1 October 2019.

Chapter 75

Chinese Model of Economic Growth—An Important Contribution to the Human Community Heritage Dmytro Yefremov

From ancient times, Chinese civilization has been famous in construction: its hard workers built grand cities and palaces, its talented architects and engineers skillfully designed canals and dams, its professional bureaucrats and officials organized the construction of fortresses and walls. The Great Wall of China can rightly be included among the wonders of the world. Over the course of many thousands of years, China has developed and perfected a unique skill to build, construct, create. China has the ability to create not only material objects, but also the living landscape, the activities coordination system for a large number of people, the concentration of efforts on individual goals is a prominent feature of the Chinese people. A world leader is one who is able to create and propose new ideas to others. These ideas are recognized, among communities and countries, if they are borrowed and copied. Today, China is proposing an idea that is becoming more and more a role model: the idea of building shared economic growth for all countries in the world. Chosen by the China’s leaders’ option of building their own development is the object of comprehensive analysis and modeling of scientists and experts. Most often it is considered as a kind of export-oriented growth strategy, adapted from an adjusted successful experience of other East Asian countries—Japan, South Korea. The structure of its national economy, analyzed by components of GDP, also includes significantly more exports, more government presence, and more investment. The main acceleration of the Chinese growth model gained in the 1980s from the heavy pumping of investment into the system: initially in the form of private money from households and initial accumulation of capital. In the 1990s it was supported by foreign direct investment from abroad, and in the 2000s it was pumped with giant public investment in infrastructure. D. Yefremov (B) Centre for International Studies, Hennadii Udovenko Diplomatic Academy of Ukraine at the Ministry of Foreign Affairs, Kyiv, Ukraine e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_75

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By means of expansive investment policies, China has rapidly expanded its merchandise exports and actively integrated toward the global value chains, becoming a “global factory.” The low cost of manpower allowed investors to make large profits and made it attractive to reinvest them in the economy. The state actively supported export-oriented business, developed state-owned enterprises, and made massive investments in infrastructure, which allowed to provide fabulously fast economic growth for a long time. The logic of such action was simple: to create a multiplicative effect from invested funds, and to ensure economic growth acceleration. The economic systems of developed countries are open to the commodity and investment flows movements, have freely convertible currencies and have accumulated large amounts of debt, which allows researchers to deduce the low efficiency from the state stimulus policy for them (Christiano et al., 2011; Ilzetzki et al., 2011). Instead, China, as a country with a high propensity for savings, controlled positive balance of foreign trade, a fixed exchange rate, and a moderate level of national debt, is devoid of all these shortcomings, and can therefore count on a tangible result from an increase in investment. In the 7 decades of development, China has elaborated an alternative model that relies on elements that are difficult to coordinate: continuous reform, permanent growth, and internal stability. The evolution of the public sector design of the PRC has taken place over a long period of complex and interconnected changes that have been driven by: (i) transition from a command-administrative economy to a mixed-type system, (ii) from a traditional economy to an industrial one, (iii) from a rural to an urban society, (iv) from semi-barter forms of interaction to formal monetized exchange between economic entities, (v) from a regionally fragmented national economy to a tightly integrated domestic market, (vi) closed from the rest of the world type of economy, aimed on import substitution, to integration into the global economy through the export promotion strategy and active use of the comparative advantage in international trade (Hussain and Stren, 2008, p. 14). At the center of the Chinese growth model is a strong state that, to ensure growth, relies on a specific public (government) sector in the economy, which is secured by a special system of administration. During the reforms, it formed the financial system of central authorities and the financial system of local authorities, which is common to many other countries in the world. Unlike the latter, China’s public sector has retained the leading role of state-owned enterprises, which was lost during the transformations in post-socialist countries. In the late 1980s and early 1990s, countries in Central and Eastern Europe, which had a structure similar to the Chinese economy, chose a distinct way of reforming it. It was outlined by World Bank specialist Williamson (1990) and was named the “Washington Consensus.” Its main parts are well known: the liberalization of the goods markets, as well as labor and capital markets, the change of the dominant form of ownership from public to private and radical reform of the public sector. In order to prevent inflation, it was envisaged to introduce rigid fiscal discipline. In the structure of public expenditures, the subsidies for inefficient production support were cut, and tax reform aimed at expansion of the tax base was implemented.

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Following the liberalization of the economy and the release of prices, some countries (Poland, Czech Republic, Slovakia, Hungary) managed to stabilize the budget quickly by reducing the share of subsidies to state-owned enterprises in it. The space for reorganization of public expenditures, called by L. Balcerowicz the “window of opportunity,” was initially wide enough as a result of the disorientation of the lobby that supported sectoral interests and had not yet adapted to radically new conditions (Balcerowicz, 1995). Central European countries took advantage of this “window”: in Poland, the share of government subsidies was reduced from 13% of GDP in 1989 to 2% in 1993, in Hungary, from 12% of GDP to 5% in the same period. In the postSoviet countries, where the transition process has been stretched, new opportunities have not been utilized effectively, as traditional lobbies have retained more influence and had adapted to changes. Washington Consensus ideology suggested that privatization of state-owned enterprises, abandonment of ineffective planned mechanisms of resource allocation, and liberalization of economic relations would automatically provide the conditions for market forces to work in a classic manner and restore economic growth. Instead, due to a lack of infrastructure, demanded by market agents, lack of experience and government support, national savings and investment declined sharply, production volumes collapsed, and instead of rapid economic growth, a prolonged recession began. As the state’s revenues fell sharply, there was a significant imbalance of public finances during the transformation time in these countries. The inactive state- owned enterprises reduced production that has led to a decrease in tax revenues and growth of unemployment, which has forced additional spending on social protection programs. Attempts to finance them were significantly limited by narrowed state resources, which provoked a new phase of budgetary instability. As a result of “shock therapy,” the economic crisis has swiftly engulfed both the private and public sectors of post-socialist countries, and their citizens have suffered from deep impoverishment. The high price paid by population of post- socialist countries for reforms carried out in accordance with the Washington Consensus shows the falsity of the transformation algorithm contained therein. From the beginning, the PRC focused on its own path of reforming the national economy, aimed not on the reduction but on modernization of the public sector role in it. That is why the structure of China’s public sector differs from the ordinary Western model of the state, which has another functions—to provide the population with public goods and to eliminate market failures. In addition to the central government and local authorities (narrow understanding of the public sector), statecontrolled enterprises, banks and financial companies play an active role in China’s finances. Functions (and the funds needed to fulfill them) are distributed asymmetrically between hierarchical levels of administration: social expenditures are shifted to the lower levels of the administrative vertically, and most of the financial resources are concentrated at the higher tiers. The size of China’s public sector remains small even today: the aggregate share of central and local governments is about 21%–22% of GDP. This is half the level observed in developed countries when they were at similar stages of per capita income

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development (US 1948, UK 1955, Germany 1961, France 1964). To a certain extent, this is due to the peculiarity of the evolution of the fiscal system of the country, which has evolved, on the basis of finding a compromise between the interests of macroeconomic actors: the central government, local administrations, large stateowned enterprises, and the private sector. As a consequence, the tax burden on the economy in dynamics exhibits a U-shaped trajectory: it dropped from 70% of GDP in the 1970s to about 10% in the 1990s, then rebounded to 20% in the late 2000s. The public sector-guaranteed security of economic growth and the strengthening of China as a powerful player in the international arena have contributed to the worldwide recognition and adoption of an alternative to market-based economic model: socialism with Chinese characteristics. Economically, it is based on the retained state ownership on the means of production in the strategic sectors. According to Kroeber, China’s reliance on state-owned enterprises is due to the lack of experience in using legislative and regulatory systems by the officials at the beginning of reforms. Obviously, they found it more convenient to regulate the transitive economy through state-controlled enterprises rather than through state agencies and institutes established for this purpose (Kroeber, 2016, p. 13). Such an approach does not mean complete denial of market relations between economic agents, but their functional sphere is clearly delineated and put under informal non-economic control. Private businesses and foreign companies are strongly encouraged to contribute to national growth and create as many jobs as possible. However, the ability of a competitive mechanism to filter and select the best entrepreneurial decisions and projects is seen as creating chaos and instability. Therefore, it is deliberately weakened for the benefit of “national champions” who are always under state control when needed. From the neoclassical economic theory point of view, the practice of active intervention in the market operations leads to the violation of general equilibrium mechanisms, distortion of price information signals for economic agents, the emergence of social welfare losses and increased inefficiency of economic activity. Unlike in the developed countries of the Western Hemisphere, where economic relations dominate and politics is driven by economic interests, China demonstrates a clear political primacy over economic ones. By implementing the components of the socialist system with Chinese characteristics into the national economy, the government hopes, first, to maintain high rates of economic growth, secondly, to enhance the quality of public services and to strengthen the social protection programs of the population, and thirdly, to preserve the long-term political stability and control over society, fourth, to strengthen China’s position and influence in the international arena. At the initial stages of model building, there were some difficulties with the coordination of private and public sector activities. State-owned enterprises, which provided a significant portion of tax revenues to the budget, had to be transferred from the care of various line ministries to the tax administration. Family-owned businesses in rural areas and small towns, as well as joint ventures with foreign manufacturing companies in free economic zones, began to emerge. The benefits they produced first became subject to different types of product taxes, which were later replaced in the 1990s by a single value-added tax.

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In 1994, the tax administration was reformed, which was separated from the Ministry of Finance and subordinated directly to the State Council of the People’s Republic of China. It is tasked with collecting national taxes at the treasury, monitoring the tax activity of local authorities. For this purpose, it relies on a system of tiered state tax missions. The financial base of China’s powerful government sector was shaped by changing approaches to tax-sharing between central and local governments: instead of distributing the final fiscal levies, the money collected for each type of tax was allocated separately. Thus, a system of classification of all contributions to the state into national, local, and mixed appeared. It made it possible to strengthen the solvency of the central government, reduce the motivation of local authorities to conceal volumes and reduce the tax base, and accumulate funds to reduce regional imbalances. All this testifies to the high adaptability of the Chinese model to the new environment while maintaining internal stability. During the period from 2003 to 2008 fiscal policy can be considered as relatively stable. Steps have been taken to harmonize the legislation and to eliminate some minor outdated fees and charges. Further transformations in this area were triggered by the global economic crisis and aimed at maintaining the high economic growth rates that the country has shown for a long time. In particular, VAT has been reduced since 2009 for small businesses engaged in the renewal of fixed capital and abolished for imported production assets; twoyear tax holidays have been declared for the newly established foreign enterprises in the space of the free economic zones, and for the national ones the income tax reimbursement has been introduced for investment in innovative development or environmental technologies. The analysis of changes in the structure of public finances shows the importance of fiscal policy in the Chinese model of economic development. Starting in 2018, a new cycle of tax adjustments has begun in the PRC, focused on supporting the economy in times of trade and economic confrontation with the US. In particular, the VAT rate for manufacturers is reduced from the current 16 to 13%, for the transport and construction sectors, from 10 to 9%. The purchase of new electric vehicles is generally tax exempt. The structure of the personal income tax system is being reorganized in the direction of extending tax exemptions and reimbursements, adjusting the limits of tax categories, facilitating the rules of payment at the place of residence, which means shifting their burdens from poor and middle-income citizens to wealthy citizens. In general, at present, China’s tax system seeks to increase transparency, align business with residents and non-residents, reduce the tax burden by expanding tax base, and bring taxation mechanisms and practices to international standards. Regional fiscal policies aimed at equalizing the spatial level of the population well-being as well as the economic growth rates of the various country’s territories are an important complements to the tax system in China, as in any other country. Given the uneven development observed between the different provinces, as well as the large population in the PRC, the regulation of transfer flows between regions is of particular importance.

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From the beginning of reforms to the final formation of its own model of interregional transfers in the early 2000s, the country has undergone several important stages. Until 1994, a quota subsidy system was in place, under which each province received a fixed share of the total treasury revenues. As this approach constantly suffered from corruption problems and did not solve the main task (equalization of the financial capacities of the regions) it was gradually replaced by intergovernmental targeted payments. Since 1995, a system of tax benefits and social transfers has been in operation, assistance for depressed sub-national units has been systematically issued in 2000, and in 2001–2005 the government has actively supported the administrations of agricultural territories, which have lost much of their income after the abolition of a number of agricultural taxes. The coincidence of these transformations in time with the major changes in China’s tax policy testify to the complementary nature of tax reforms and transfer policy, their important role in the country’s financial system. In the 2010s, the main focus of state transfer policy shifted to supporting infrastructure projects. Another important component of China’s public sector is State-Owned Enterprises (SOEs). Most often they are not natural monopolies, which are justified in Western economic literature, but are hybrids, combining the characteristics of private firms and state-owned companies. The state supports them in the form of preferential working conditions, cheaper loans, and hidden subsidies (for example, through low raw material prices). From private business practices, SOEs borrow operating techniques and managerial autonomy. The high profitability of SOEs is ensured not by the form of their ownership or competitive success, but by artificially created non-economic advantages. 90% of them are now corporatized and have the technical ability to raise capital from various sources, including foreign ones. Within the national SOEs’ investments are concentrated around capital construction and infrastructure projects, reflecting their role in the implementation of party politics. Most of them were invested in the management of public buildings, the development of road transport, the production and supply of electricity and heating, rail transport. It is not uncommon for state-owned companies to invest domestically through joint ventures with foreign firms, with foreigners often coming from Hong Kong or Macao, an offshore area heavily used by Chinese businesses. Even stateowned businesses are actively practicing legal tax relief schemes that provide for preferential treatment for foreign-owned companies, which enhances their operational freedom and allows them to expand their financial capacity and fulfill the state’s industrial development goals. SOEs continue to be an important place of employment for the workforce: around 45% of urban residents are employed there. Among the sectors of the national economy with high employment, where the SOEs are actively operating, the agroindustrial complex, generation of electricity, gas and water, research and educational activity, provision of public services to the population are distinguished. The level of remuneration in state organizations and institutions is higher than the industry average, especially when there is a basis for commercialization of the results of their activity.

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The level of employment at SOEs, relative to the share of invested capital, remains high (throughout the economy), indicating the party’s additional social burden (along with its infrastructure policy) put on the mission of SOEs in the economy. Thus, in the manufacturing sector alone, the share of the public sector, which can be identified by official statistics, ranges from 25 to 30%. In the service sectors, the state controls an even larger share (about 50% of value added) largely due to the ownership of megabanks and insurance companies. But this is only the tip of the iceberg, because many SOEs have dozens of subsidiaries controlled under different names, in addition to local SOEs, operating in the regions of the country. In some provinces, especially with low regional output per capita, SOEs generally make more than half of the investment, provide jobs to the majority of residents and, through taxes paid, have a decisive impact on local budget revenues. Therefore, the regional authorities take good care of the SOEs operating on its territory, giving them additional administrative preferences and preferential lending. By controlling the initial (and partially intermediate) links in the value chains by the means of SOEs, the Chinese government has the ability to systematically implement industrial policies in the country, as well as to remove monopoly rents from the private sector and use them to finance accelerated economic growth. As a result, more than 55% of the Chinese economy is concentrated in the public sector (broadly) under party control. Relying on it, the country’s leadership implements a policy of accelerated growth and industrial breakthrough. It concentrates funds in cutting-edge industries, limiting their unproductive use and fleeing of capital abroad. Successful modernization policies ensure high growth rates that affect the well-being of the whole population and are reflected in civic loyalty and political stability. Public SOEs align private players’ access to raw materials and energy resources, their exclusive status in the markets does not guarantee monopoly rents, and in some regions SOEs fulfill a social mission and compensate for the lack of public goods. The negative side in the high growth rates and expanded role of the government sector is also present. It takes the form of low efficiency of resource use, especially capital, indebtedness, a decline in the stability of the banking system, an insufficient level of private consumption against, excess production capacity and ambiguous infrastructure projects. The Chinese model of socialism has in recent years been the subject of increased criticism from governments, academia, and business in the developed world. Support for Chinese SOEs at foreign markets, provided by public sector mechanisms, raises accusations of unfair competition, abuse of trade terms and rules designed for free liberal economies. Leadership gained by Chinese companies in some global markets has been perceived as a challenge in the West and has raised new questions about scientific and technological backwardness and technological security. At the same time, however, it has led to talks about the resumption of pending reforms of the institutions and rules of international trade, cross-border movement of capital, technology transfer, to attention for the deteriorated transport infrastructure and low connectivity between regions of the world. Through its international initiatives and national model of economic relations modeling, China offers for the humankind a

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new, separate way to solve global problems. Each country in the world will form its own assessment and response. But one thing is for sure: having more than one initiative, governance model, development strategy, and the competition between them, is a win–win situation for all of humanity.

Suggested Reading Balcerowicz, L. (1995), Socialism, Capitalism and Transformation, Central European University Press, New York. Christiano, L., Eichenbaum, M., Rebelo, S. (2011), “When is the Government Spending Multiplier Large?,” Journal of Political Economy, Vol. 119, pp. 78–121. Hussain, A. and Stren, N. (2008), “Public Finances, the Role of the State, and the Economic Transformation, 1978–2020” in Public finance in China: Reform and Growth for a Harmonious Society/edited by Jiwei Lou, Shuilin Wang, World Bank, 2008, pp. 13–38. Ilzetzki, E., Mendoza, E., Vegh, C. (2011), “How Big (small?) are Fiscal Multipliers?,” IMF Working Paper, Research Department, WP/11/52, p.67. Kroeber A. (2016), China’s Economy: What Everyone Needs to Know, Oxford University Press, p. 256. Williamson, J. (1990), “What Washington Means by Policy Reform” in John Williamson, Latin American Adjustment: How Much has Happened? Institute for International Economics, Washington, D.C., 1990.

Chapter 76

A New Facet of Economic Growth in China: Inclusiveness Khamidulla Normuradov

Recent research has shown that not always economic growth leads to better living conditions, improved medical care, longer life expectancy for the poor and the poorest. One reason is inequality of wealth and unevenness of growth. On average the whole population is better off, however, there is a huge difference between the wealth of first quintile and last quintile, which means, millions of people worldwide might actually be worse off. Under these conditions, GDP growth rate or per capita GDP growth rate are not good measures of economic growth. As a result, a new methodology has been offered for assessing the development of countries, a tool known as the “inclusive development index.” According to authors from the World Economic Forum,1 this new method of assessing is more comprehensive and takes into account eleven dimensions of economic progress in addition to GDP to evaluate more precisely the well-being of the population and its quality of life. According to the World Bank, inclusive growth refers both to the pace and pattern of growth, which are considered interlinked, and therefore need to be addressed together. In this relationship, we are talking not only about bringing the gap between rich and poor closer, but also about equal conditions for obtaining education, ensuring the protection of health and safety. Therefore, an inclusive approach to growth provides for a long-term strategy based on productive employment. Along with an openness policy, an inclusive development strategy has become an integral part of the economic reforms of the Chinese government. Starting from 2004, China has approved the concept of a “harmonious society” based on the principles of inclusiveness: economic growth, equality, and continuous and stable development. 1 The Inclusive Development Index 2018, https://www.weforum.org/reports/the-inclusive-develo pment-index-2018.

K. Normuradov (B) Center for Economic Research and Reforms of Uzbekistan, Tashkent, Uzbekistan e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_76

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Fig. 76.1 GDP per capita, PPP (current international $)—China, 2000–2018. Source World Bank, International Comparison Program database

The Chinese harmonious society is based on democracy and rule of law, equality and justice, trust, and coexistence of man and nature. The strategy of inclusive economic development is reflected in the Five- Year National Plans of Economic and Social Development of the PRC, as well as in long-term strategies until 2030 and 2050, where the main goal is global innovation leadership and an innovative nation. According to the final Five-Year Plan of China, the key components of China’s economic strategy are an innovative economic structure, intensive industry, coordinated regional systems, green development, an inclusive society, an open worldview, and economic institutions. An inclusive society itself provides for focusing on education, science, culture, and health, and intensifying efforts to overcome poverty. An inclusive development model is built on the basis of social justice and stimulating domestic consumption. China has already done a tremendous job in overcoming poverty. According to the World Bank, more than 850 million people moved out of extreme poverty as China’s poverty rate fell from 88% in 1981 to 0.7% in 2015, as measured by the percentage of people living on the equivalent of US$1.90 or less per day in 2011 purchasing price parity terms. This is in line with most developed countries: USA (1%), Sweden (0.61%), Germany (0.19%), Italy (1.5%), etc.2 Over the past 10 years, the Chinese economy has slowed down, which is due to a reorientation to stimulate domestic demand. The average annual growth rate of real GDP is 6.4%, and per capita GDP (PPP, current international $) increased from $2936 in 2000 to $18,210 in 2018 (Fig. 76.1). The growth of per capita income is accompanied by a narrowing of the gap between the rich and poor in the PRC. According to World Bank, the GINI income distribution inequality coefficient dropped from 43.7 in 2010 to 38.6 in 2015. However, it 2

“Extreme Poverty in Rich Countries: What We Know and What We Don’t Know,” Esteban OrtizOspina, Feb 2013, https://ourworldindata.org/extreme-poverty-in-rich-countries-what-we-knowand-what-we-dont-know.

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Fig. 76.2 GINI index—China, Germany, Italy, Sweden, USA, 2000–2015. Source World Bank, Development Research Group

should be noted, that these values are still high, they are around the warning level of social unrest established by the UN, i.e., 40. Such a high indicator indicates income concentration in certain groups of the population (Fig. 76.2). One of the priorities of China’s inclusive economic growth is to stimulate domestic demand and consumption. With fiscal stimulus, the PRC government is reducing its dependence on external demand by increasing domestic demand. This is the main source of maintaining growth of the Chinese economy, but with a moderate slowdown. China is lowering the gap between the rich and the poor partly by urbanization. The Chinese government realized, already in the early 1970s, that quick poverty reduction, increased literacy rates, etc., are only possible in urban areas. After persistent high values, the growth rate of urban population has been falling from over 4% in early 2000, to around 2.5% in 2018. However, even these values are at least twice that of most EU countries (Fig. 76.3). In contrast to most European countries and the United States, China’s urbanization rate was much lower until the mid-1970s, and is still lower than 60% (Fig. 76.4). In our prediction, China will continue to boost its economy by increasing share of urban population for at least until 2030, when it gets close to or surpasses EU countries by this measure. According to the distribution of gross regional product, the three leading provinces are Guangdong, Jiangsu, and Shandong (Fig. 76.5). To prove our urbanization hypothesis above, these three provinces are also the most densely populated provinces. The highest GDP per capita are in Beijing (140,000 yuan), Shanghai (135,000 yuan), Tianjin (121,000 yuan), Jiangsu (115,000 yuan) all of which are known to be gigantic cities. For comparison, the country average GDP per capita in 2018 was 64,600 yuan.

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Fig. 76.3 Annual urban population growth, China, Germany, Italy, Sweden, USA. Source World Bank, Development Research Group

Fig. 76.4 Urban population (% of total population), China, Germany, Italy, Sweden, USA. Source World Bank, Development Research Group

The application of regional strategies for economic and innovative development, which led to the creation of a favorable investment environment by opening special economic, industrial, technical, and economic development and export zones, ensured the production leadership of the above provinces. They concentrated financial, industrial, innovative potential, and human capital. According to the WEF estimates presented in the report “The Inclusive Development Index 2018,” China scored 4.09 and ranked 26th among 74 developing countries. Performance is mixed among BRICS economies: the Russian Federation (19)

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Fig. 76.5 Gross domestic product (GDP) of China in 2017, by region (in billion yuan). Source Statista, https://www.statista.com/statistics/278557/gdp-of-china-by-region/

is ahead of China (26), Brazil (37), India (62), and South Africa (69). Although China has ranked first among emerging economies in GDP per capita growth (6.8%) and labor productivity growth (6.7%) since 2012, its overall score is brought down by lackluster performance on inclusion.3 Inclusive development (China’s position is #55 in this measure) is hindered by such factors as inequality in the distribution of income and wealth, an increase in the demographic burden coefficient (the ratio of the number of dependents to the working population), and also the intensity of carbon dioxide emissions. Another pillar where China scored high (17th among 74 countries) is the Intergenerational Equity and Sustainability pillar. It is augmented by its low population dependency ratio (39 dependent people for every 100 working-age population, the second-lowest in the IDI sample), and high adjusted savings representing 23% of gross national income (GNI), the seventh highest. But China still ranks 65th for carbon intensity, though emissions per unit of GDP have declined by 38% since 2012, as manufacturing plays a lesser role to the profit of less carbon-intense services. In the Growth and Development pillar of the IDI, China ranks a remarkable 9th, thanks to a high level of employment, with over two-thirds of the population employed (20th among emerging economies), and relatively long health-adjusted life expectancy (68.5 years, sixth longest).4 Summarizing the above, we can conclude that in modern conditions, constant economic growth needs inclusive development. The Chinese government, understanding the challenges of the future and the global problems of mankind, has embarked on a course of internal development combined with the openness and innovativeness of the economy. This will ensure a long-term socio-economic effect: 3

The Inclusive Development Index 2018, World Economic Forum, http://www3.weforum.org/docs/ WEF_Forum_ IncGrwth_2018.pdf. 4 The Inclusive Development Index 2018, World Economic Forum, http://www3.weforum.org/docs/ WEF_Forum_ IncGrwth_2018.pdf.

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continuous economic growth, access to secondary and higher education, medicine, the formation of a strong middle class, and an innovative nation.

Chapter 77

Innovative Economic Growth Initiatives for Chinese Industry in a Time of Globalization Challenges Olena Boiko

One of the strategic directions of the economic development of the PRC is the innovation activity of industrial enterprises. A quantitative comparison of the level of economic security of the PRC with other countries of the world is possible on the basis of the Global Competitiveness Index. In 2018, WEF experts have developed a new tool for assessing the performance of world economies: the Global Competitiveness Index 4.0 2018 (Global Competitiveness Index 4.0 2018). It reflects the ability of world economies to compete with other countries in the context of the fourth industrial revolution. Based on GCI 4.0 2018, competitiveness is assessed on 12 factors. They are important components of the long-term growth of the national economy and income. The top ten in global economic competitiveness rankings are: (1) The United States of America, (2) Singapore, (3) Germany, (4) Switzerland (for five consecutive years leading the ranking of competitiveness leaders), (5) Japan, (6) The Netherlands, (7) Hong Kong, China, (8) The United Kingdom, (9) Sweden, (10) Denmark. According to the Global Competitiveness Index 4.0 of 2018, China ranked 28th in 2018. The main factors of competitiveness are shown in Fig. 77.1. Exploring the experience of modern socio-economic development of the PRC, one cannot neglect the history of its development. The main directions are scientific, technical, and innovative development. At the heart of this development is the theory of technological progress by Deng Xiaoping. It outlines several theses: science and technology are important productive forces; intellectual workers (including workers in scientific and technological specialties) belong to the working class, and their abilities must be remunerated, as well as the reform of the management of science, technology aimed at the liberation of productive forces. O. Boiko (B) Institute for Economics and Forecasting, National Academy of Sciences of Ukraine, Kyiv, Ukraine e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_77

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Fig. 77.1 China’sglobal competitiveness index 4.0 2018 in 20181

From 1975 to 1978, the incubation phase continued in the PRC. It is related to the implementation of state innovation policy. Its essence was the introduction of direct government orders for research, the purchase of foreign technologies (sets of equipment for industrial enterprises). A feature of the “experimental” stage (1979–1985) is the organization of contractbased cooperation between government agencies, the main institutional sectors not only within them, but also between them. The development of technological dualism (by analogy with the dualism of prices and forms of ownership), and the formation of a multilevel technological system (retaining the features of a combination of traditional and high technology) led to the liberalization of sources of funding for research and development. The partial removal of the state control in the sphere of foreign economic activity allowed the industrial enterprises of the country to independently purchase foreign equipment and technologies. Special Economic Zones (SEZs) were being actively opened to attract foreign capital. The implementation of structural reforms in the period from 1986 to 1995 contributed to the introduction of a project (grant) system to support the development of science and the selection of research institutions. At the stage which lasted from 1996 to 2005, there is an increase in GDP science intensity due to the active investment of the business sector. Privatization of industrial enterprises and scientific institutions was carried out. The issue of commercialization of newly created technologies for state educational institutions has been legislated. New forms of direct state financing of innovations are being developed by providing tax breaks for high-tech industrial industries and more. 1

The Global Competitiveness Report 2017–2018—Geneva. World Economic Forum—393 P.; Ukpaina zan.la 83-e mecto v pe.tinge globalbno. konkypentocpocobnocti, podn.vxicb na xectb pozici. [.lektponny. pecypc]. Pe.im doctypa: https://www.gordonua.com/news/ money/ukraina-zanyala-83-e-mesto-v-reytinge-globalnoy-konkurentosposobnosti-podnyavshisna-shest-poziciy-432910.html; Otqet o globalbno. konkypentocpocobnocti 2018 goda [.lektponny. pecypc]. Pe.im doctypa: https://www.roscongress.org/materials/otchyet-o-glo balnoy-konkurentosposobnosti-2018-goda/.

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From 2006 to today, the main goal of the country’s economic development is to enhance the innovative perception of the use of science and technology. Over 10 years, the cost of innovative development has increased by 21.0% annually. The country ranks second in the world in terms of total funding for innovative development. The share of business spending on innovative development in China’s GDP is higher than in EU countries. There are more graduates (bachelor level) from Chinese higher education institutions than in Japan, South Korea, the United States, Taiwan (China), and Germany combined. The number of scientists and engineers employed in China’s economy has doubled, compared to 2000. The share of China in the indicator characterizing the construction of semiconductor plants has increased by 40.0%, while in the USA by 8.0%. Chinese manufacturers came in first place in the world in the production of solar batteries, in the manufacture of air power plants, and it is also the world’s leading manufacturer of lithium batteries. In the short term, China plans to reduce the economy’s dependence on imported technologies by 30.0% and increase the share of high-tech industries in GDP by 60.0%. In recent decades, the number of patents for intellectual property results, including patents for inventions, has increased significantly in the PRC. According to the World Intellectual Property Organization, China is the leader in the number of patent applications filed. In 2016, China’s inventors filed more than 1 million patent applications. Among all states, it is the only country where patent growth is accompanied by an increase in the share of residents among applicants. This is due to the presence of highly qualified Chinese researchers, the growth of inventive activity, the interest in protecting and commercializing their own developments. For example, over the past 5 years the number of patents in the field of artificial intelligence has increased by 190.0%.2 Particularly impressive is the number of patent applications in the field of nanotechnology. Over the last 20 years, the PRC has filed 209,344 patent applications. This is twice the number for the US, which ranks second in the world in this indicator. In 2016, about 33.0% of the world’s scientific papers on nanotechnology were published by Chinese scientists. The monitoring of industrial enterprises operating in the PRC on an innovative basis shows that they can be classified as follows. . State-owned enterprises (“Haier”, “Lenovo”, “Chery”, “SAIS”, “ZTE”) and private enterprises (“Huawei”, “Galanz”, “Aux Group”, “Geely”). . Large, medium, and small enterprises. The share of large innovative companies is 1.0% of the total number of large industrial enterprises in the PRC. A significant number of them were created on the basis of universities and research institutes (“Lenovo”, “Beida Founder” at Peking University).

2

FigOvCki. O., Gymapov B. Innovacionna. cictema Kita.—ocnova .konomiki ctpany [.lektponny. pecypc].—Doctypen iz: http://iee.org.ua/ru/publication/298/.

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. State-owned companies: more than 550 large innovative (experimental sites) companies in the PRC. The status of “innovative company of national importance” is conferred by three institutions: the Committee on Science and Technology, the Committee on Control and Management of State Property and the All-China Federation of Trade Unions. . Foreign, Chinese-foreign, Chinese companies and companies that have returned from abroad Chinese specialists. It should be noted that in today’s market conditions, China’s industrial enterprises produce more than 34.0% of innovative products in the world. For the development of innovative enterprises, the Government of the People’s Republic of China creates special climatic conditions that stimulate domestic manufacturers of high-tech products. In addition to tax breaks and subsidies, a system of providing land to enterprises engaged in scientific and technical sphere is used. In terms of area, these parcels of land are larger than necessary for the construction of a factory or factory. In additional territories, companies build homes or hotels, which are then used to invest in SSTD (scientific and scientific- technical development) and offset factory losses. State-owned banks provide low-interest rates to innovative companies, while local governments repay interest payments and the like. The main acts governing the development of innovative activities are the laws of China on the implementation of scientific and technological achievements, on the promotion of science and technology, on the promotion of medium and small enterprises. In addition, in the field of innovation development in selected sectors of the Chinese economy, the following is approved: . Order of the Office of the State Council of the People’s Republic of China, On Innovative Management, Improvement of Service, Formation of New Powerful Drivers of Economic Development, Accelerated Changes of New and Old Drivers of Growth (2017). Measures to shift the economy to new components of growth are envisaged (improvement of the quality of public service delivery, development of mechanisms of control loyal to innovative activity, stimulation of mobility of new production factors; development of mechanisms of support and application of the guarantee system). . Instruction of the Office of the State Council of the People’s Republic of China, On Institutional Mechanisms for Investing in Innovative Rural Infrastructure (2017). It is envisaged to create by 2020 a multi-subject financial investment mechanism and an efficient market order for the organization of construction, to unify the system of management of construction of rural infrastructure, to significantly improve its quality. . Order of the Office of the State Council of the People’s Republic of China On the Development of Innovative Drivers of Growth at the County Level (2017), the implementation of which will accelerate the transformation and modernization of production, the creation of powerful innovative enterprises, the concentration of innovative and entrepreneurial personnel, the creation of specialized sites, industrial sites, technological parks, etc.), promoting the improvement of

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the situation in the social sphere at the county level, targeted support and overcoming poverty through innovative development, increasing the popularity and the implementation of on-the-ground technological innovation programs. Order of the Office of the State Council of the People’s Republic of China, On the Organization of Construction of the Second Stage of Exemplary Support Centers for Entrepreneurship and Innovation (2017) provides for the formation of the second stage of 92 such centers, including 45 territorial (in areas and zones of development of some cities), 26 in higher education institutions and research organizations, as well as 21 in state-owned enterprises. Order of the Office of the Central Committee of the Communist Party of China and of the Office of the State Council of the PRC, On the Development of Ecological Agriculture Based on Innovative Institutional Mechanisms (2017) provides for the improvement of functional specialization and spatial placement of agricultural objects, strengthening the protection of resources and their economical use, strengthening of protection regulation of the environment in agricultural production areas, protection, and restoration of the ecosystem in agriculture, formation of incentive mechanisms and removing restrictions on innovative development. Communication from the Office of the State Council of the People’s Republic of China, On Extending Innovation Support Measures (2017) is to implement the initiative to create pilot zones for the comprehensive promotion of innovative reforms: Beijing-Tianjin- Hebei region, Shanghai, Guangdong, Sichuan, Hubei, Shaanxi, Liaoning in the areas of financial and technological innovations, formation of innovative entrepreneurial environment, involvement of foreign specialists, coordinated development of the military and civil industry. Instruction of the Office of the State Council of the People’s Republic of China, On Active Promotion of Innovative Development and Application of Supply Chains (2017), which is expected to form by 2010 a set of new technologies and models of supply chain development, as well as to create about 100 enterprise-leaders in the global chain of supply networks.

In addition to the existing legislative framework on the territory of the PRC in the field of innovation activity of industrial enterprises, the main priorities for the development of this sector are defined in state programs, the main aspects of which are given in Table 77.1. Having analyzed the peculiarities of implementation of regulatory support for innovative development of industrial enterprises of the PRC, which are capable of producing competitive products as a priority for the long term, we should consider: . Assistance to the state in the formation of high-tech industries, including in the direction of creating an efficient system of technology transfer . Providing state support in the creation and development of modern forms of innovative infrastructure (clusters, industrial parks, SEZs, technological parks, etc.) in the provinces of the country, which has a network of scientific and technological and industrial enterprises with high scientific and technological potential

The program (1982) stated that it was necessary to “take possession of key technologies that play the role of supporting pillars in socio-economic development”. The main types of economic activities that are promising include agriculture, energy, telecommunications, transport, new materials, exploration of resources, environmental protection, and health care. The plan was financed mainly from the state budget as well as from the local budgets and from the industries. It should be added that a significant number of researchers are involved in the implementation of the Plan

The program (1984) envisages support for key publicly or partially owned laboratories The main objectives of the program are: development of research and training in 159 laboratories belonging to universities, research institutions; creation of a comprehensive system of national engineering centers

Program implementation (1997) is managed and funded by the Ministry of Science and Technology of the PRC together with the National Social Science Foundation. The purpose of the program is to finance, support research activities that are of major importance for the socio-economic development of the country. Support for basic research in the fields of energy development, new materials, agriculture, population and health is identified as priority areas. For the period of implementation of the Program during 2016–2020, the priority directions of development of fundamental science were included such sciences as mathematics, theoretical physics, molecular chemistry and quantum catalysis, quantum informatics and neural network, proteomics The program envisages reforming the scientific field for the purpose of selection and retention of the best scientific personnel employed in basic science. The Program also included a number of provisions that included the procedure for appointing executives (seniority, less than 55 years of age), a bonus system for publication in rating journals, and citation indices

“Summiting scientific and technological peaks”

“Key Laboratories”

Program for Supporting the Key Directions for the Development of Fundamental Science “Program 973”

(continued)

The program (1982) identified the priorities of China’s innovative development, in particular in the field of knowledge, catching up with the policy of technological backwardness in the field of industrial development

“Key Technologies”

The name of the program for the Basic aspects of the program implementation of state innovation policy

Table 77.1 State innovation policy implementation programs in China

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The first stage (1986) defines the purpose, objectives (development of basic technologies necessary for the construction of information infrastructure; development of key biological, agricultural and pharmaceutical technologies; new materials and technologies that are needed to increase the competitiveness of industrial production) and ways to support SSTD in priority areas of science and technology (biotechnology, automation, information and laser technology, alternative energy and new materials, space exploration technology growth). Subsequently, attention was also focused on the development of telecommunications technologies (1992), as well as in the field of ocean development (1996). Funding for the Program (RMB 11 billion) has exceeded support for other programs. According to the program, work was being done to create the national microprocessor Longsang, the Tianhe supercomputer, the first Chinese spacecraft The main mechanisms for the implementation of the Program are: enhancing the innovation potential of enterprises by encouraging innovative activity, which is estimated by the number of patents obtained; strengthening and protection of intellectual property rights; leveling the level of development of high technologies in the regions; development of international cooperation

“Spark”

(continued)

The objective of the program (1986) is to support NTRs in the field of agricultural development. Over 90,000 projects have been funded during the program implementation, totaling over $ 5 billion. USA. The main financing was provided by commercial enterprises—about 80.0%, as well as bank loans—16.8%, the other part being budget allocations. The “Iskra” program solves the problem of poverty eradication in the PRC and provides food for residents of urban areas

The purpose of the Program (1982) is to make changes in the technological re-equipment and modernization of traditional “Program of research and development work in the field of industries, as well as in the formation of new ones due to the mobilization of financial and human resources and their direction in key technologies” technological development

“Program 863” (High-Tech Support)

The name of the program for the Basic aspects of the program implementation of state innovation policy

Table 77.1 (continued)

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The purpose of the program (1988) is to provide financial support to high-tech industries and commercialize technological innovations. The main priority types of economic activity are new materials, bioengineering, informatics, non-traditional energy, mechanical engineering and electronics Due to the implementation of the program, industrial parks, business incubators and business development centers at higher educational establishments are created in the country The program is financed from the business sector—more than 72.0%, bank loans—21.0%, state subsidies—3.0%, as well as from other sources The program funded about 10,261 projects in the area of high- tech manufacturing and created over 130 new and high technology development zones (Beijing, Tianjin, Shenyang, Wuhan, etc.). For these industries, a special tax and customs regime is established (for enterprises exporting more than half of their products abroad, the income tax was reduced by 10.0%, and imports of technology development equipment and equipment were exempted from customs duties) 28,504 high-tech enterprises were founded in science cities and business incubators, and 3.49 million new jobs were created

(continued)

“State Plan for Priority The plan has been in place since 1990 to create an enabling environment and environment for the organized, systematic introduction Implementation of Scientific and of advanced technologies that are ready to implement scientific and technological developments in the country’s economy. The plan Technological Developments” applies a science-business partnership mechanism The sources of financing are loans, capital investments, own funds of enterprises, accumulation of public funds, funds of provinces and enterprises. The state allocates additional funds for individual projects. Thanks to the implementation of the Plan, innovative activity of industrial enterprises of the PRC is observed

“Torch”

The name of the program for the Basic aspects of the program implementation of state innovation policy

Table 77.1 (continued)

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The Program was adopted in 2006. The main objective of the Program is to strengthen the independence of national scientific and technological potential, to ensure innovative activity, to make technological progress through the development of domestic production; development of cooperation between industry and universities led by enterprises; coordination of civil and military research and transformation of the latter into civilian purposes; creation of regional innovation systems taking into account existing differences of regions; development of a service system for scientific, technical and innovative services The program sets out two main approaches to the development of science and technology: the traditional one (the implementation of major scientific projects with the full support of the state) and the new one (the development of industrial innovation and the commercialization of know-how) The main directions of development of science and technology are highlighted: alternative energy, modern transport, robotics, biotechnology, nanotechnology, etc.

The purpose of the program is innovative development. The program envisages increasing spending on social research and experimental development in the PRC from 1.8% (2010) to 2.2% (2022); the number of patents for new inventions per ten thousand people will almost double—from 1.7 (2010) to 3.3% (2022)

“Medium and long-term science and technology development program for the period up to 2020”

“12th Five-Year Program”

(continued)

In 2006, the “State Program for Medium and Long-Term Scientific and Technical Development for 2006–2020” replaced the “State Plan for Priority Implementation of Scientific and Technical Development”. According to the new Program, the share of expenditures on scientific, scientific and technological development in GDP should reach 2.5% (2005—1.34%), and the contribution of scientific and technological progress to economic development—up to 60.0%. This will allow the PRC to reduce its dependence on imported technologies and enter the top five countries in terms of patents issued and references to scientific publications The program envisages the development of scientific-innovative system in such areas as: development of cooperation of industry, universities under the leadership of enterprises; increasing the importance of original domestic innovations; coordinating civilian and military research, as well as transforming civilian and military research; creation of regional innovation systems taking into account regional variants; development of a service system for scientific and technical, innovative service

“State Program of Medium- and Long-term Scientific and Technological Development for 2006–2020”

The name of the program for the Basic aspects of the program implementation of state innovation policy

Table 77.1 (continued)

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The main tasks of the Plan implementation are building an innovative economy by creating their own innovations and reducing the level of dependence on foreign technologies; transformation of industrial enterprises and business sector into the driving force of NIS construction; achieving a breakthrough in strategic areas of technological development The main priority types of economic activity are access to energy and water resources; development of environmental technologies, development of technology for protection of intellectual property rights, biotechnology, aerospace, aviation and marine technologies

“Plan 2020”

(continued)

The program provides for a preferential policy for products made on the basis of new technical principles, concepts, and design The main tasks are that the military industrial enterprises of high-tech industries are preparing to “change milestones” in the direction of production of civilian products, consistent with global trends and the nature of structural changes in the cost of the scientific and technological development; the level of competitiveness of high-tech industries is monitored by the expert community to identify promising “growth points”, taking into account the replacement of foreign technological innovations with domestic production

Program for development and evaluation of new high-tech products

State scientific and technological The program is for the period 1996–2010. The main purpose of the program is to improve the quality of life and human capital, to program of social development improve the environment of human existence, to regulate relations between man and nature, to promote scientific and technological progress in the social sphere Main directions of the program implementation: medical and sanitary services, health care; rational use of natural resources and their protection; improving the environment; preventive measures against natural disasters; residential urban and rural construction

The name of the program for the Basic aspects of the program implementation of state innovation policy

Table 77.1 (continued)

586 O. Boiko

Klavdienko B.P. Hacionalbna. innovacionna. cictema Kita.: ctanovlenie i pazvitie // Innovacii.—№4(210).—2016.—C.97-103.; J. Sigurdson. Technology and Science in People’s Republic of China.UK. Oxford. 2013.; C. Huang, N. Sharif. Global technology leadership: The case of China //Science and Public Policy. Vol. 43. February 2016; Xyl.k B.C., Petpyxka O.B. Cvitovi. docvid pealizaci| financovix ppoektiv dep.avno-ppivatnogo paptnepctva v ekonomiqni. infpactpyktypi Cvitovi. docvid pealizaci| financovix ppoektiv dep.avno-ppivatnogo paptnepctva v ekonomiqni. infpactpyktypi // EKOHOMIKA I CUCPILbCTBO.—Bip. 17.—2018.—C.621-626.; Xymcbka O. DOCBID POZBITKU PUBLIQHO-PPIBATHOGO PAPTHEPCTBA U PPOBIDHIX KPAÏHAX CBITU [Elektponni. pecypc].—Doctypni. z: http://iee.org.ua/ru/publication/298/; Cevalbnev B.B. Pazvitie innovacionnogo cektopa ekonomiki KHP // kypnal zapybe.nogo zakonodatelbctva i cpavnitelbnogo ppavovedeni..—№2.—2012.—C.164-174; Kpictofilopyloc m, Mancanakic C. Kita. -2025: nayqny. i innovacionny. landxaft. // Fopca.t.—T.10.-№3.—2016.—C.7–16; Kovalev M.M. Kita. v XXI veke—mipova. innovacionna. dep.ava ˘ HACIOHALbHAr CTPATEGIr.IHHOBACIOHHOGO / M.M. Kovalev, Ban Cin.—Minck: Izd. centp BGU, 2017.—239 c.; Bepezin A.H. KITAI: PAZBITIr [Elektponni. pecypc].—Doctypen iz: https://files.scienceforum.ru/pdf/2012/2433.pdf; Bikov O.M. HAUKOBO-TEXHOLOGIQHA CKLADOBA ZPOCTAHHr EKOHOMIKI KITA. B GPUPI KPAÏH BPIKC//AKTUALbHI PPOBLEMI EKOHOMIKI—№9(135).—2012.—C.55-62.; Kloqixin E. Hayqna. i innovacionna. politika Kita. [Elektponni. pecypc].—Doctypen iz:; Kovalev M.M. Kita. v XXI veke—mipova. innovacionna. dep.ava / M.M. Kovalev, Ban Cin.—Minck: Izd. Centp BGU, 2017.—239 c.

3 FigOvCki. O.L. Innovacionna. cictema Kita.—ocnova .konomiki ctpany [Elektponni. pecypc].—Doctypen iz: http://iee.org.ua/ru/publication/298/;

Source Sweet by the author3

“Made in China 2025” program The purpose of the Program is to: create national manufacturing centers by type of research institutes and universities, modernize basic industries, introduce artificial intelligence into the industry, develop eco-friendly technologies, enhance the formation of Chinese brands, and produce high value-added products To implement the Program, a National Investment Fund for Advanced Manufacturing and a National Integral Fund have been established, to which 159 billion yuan have been invested. The priority areas for financing are the types of economic activities that stimulate innovation. The program assumes that government investment funds and development banks provide low interest rate loans to companies belonging to major sectors of the economy and provide research grants

The name of the program for the Basic aspects of the program implementation of state innovation policy

Table 77.1 (continued)

77 Innovative Economic Growth Initiatives for Chinese Industry in a Time … 587

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. Use of existing scientific and technical potential for development of priority types of economic activity (agricultural technologies, biotechnologies, nuclear and space technologies, etc.) . Creation of favorable conditions for research in the field of scientific and technological development (chemical technologies and new materials, information technologies, etc.) . Improving the regulatory framework in the field of development of scientific and innovative activity in the PRC . Integration into the global innovation sphere. Particular attention is paid to the creation and development in the PRC of organizational forms of innovation that are characterized by the availability of preferential regimes. In particular, this concerns the five Special Economic Zones (Shenzhen, Zhuhai, Shantou, Xiamen, Hainan). Under the current regime, the administrations of the zones (governing committees) enjoy the rights of provincial governments in regulating economic development and developing a regulatory framework. In particular, they are independent in borrowing money in the world and domestic credit markets. The placement of bonds abroad is within the limits set by the central government. In doing so, they are responsible for their obligations at their own expense. The limit on foreign investment is set at $50 million. The foreign resident’s investment must be at least 25.0% of the authorized capital within the newly created enterprise. As for the enterprises-residents of SEZs, a preferential tax rate for income, fiveyear “tax holidays” with full or partial tax exemption applies (the first two years, no tax is levied, the next three years, 50.0% of the current rates). By 2008, the preferential income tax rate was 15.0% (for other Chinese companies outside the preferential zone, the rate was 33.0% at that time). According to the announcement of the State Council of the People’s Republic of China, On the Transitional Policy of Granting Benefits on Corporate Income Tax Benefits (2007), a five-year transition period for new rates of the specified tax was established for the enterprises-residents of SEZ from January 1, 2008: in 2008— 18.0%, 2009—20.0%, 2010—22.0%, 2011—24.0%, and since 2012—25.0%. This only applies to residents who were registered before March 15, 2007, and who had previously enjoyed a 15.0% preferential tax rate. As for residents who were registered after that period, since January 1, 2008, a single company for all Chinese enterprises has been introduced. Income tax rate is 25.0%. For residents who have previously used a preferential income tax rate of 24.0% (residents of border areas, open coastal cities), the rate has been increased to 25.0% since 2008. Regarding SEZ residents engaged in industry, manufacturing, repair, and foreign trade, a 17.0% VAT rate applies throughout the PRC. However, VAT and customs duties are not levied on imports of production equipment and materials that are exported by a foreign resident at the expense of their share in the enterprise. Consumer tax (excise tax), personal income tax, and other types of taxes in force in the PRC are paid at the same rates as in the rest of the country. According to the decision of the local administrations, export-oriented or high-tech enterprises may

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Table 77.2 Foreign trade in goods made by Chinese FEZ in 2107 Cost (million yuan)

SEZ

Turnover Shenzhen

Export

Increase (%) Imports

2,801,146 1,653,357 1,147,789

Turnover Export Imports 6.4

5.5

7.9

Xiamen

581,604

325,365

256,239 14.3

5.2

28.4

Zhuhai

299,012

188,298

110,714

8.6

4.4

16.4

Shantou (January February)

52,382

39,195

13,188

2.5

1.2

6.7

Hainan

70,237

29,566

40,671 –6.5

110.4

–33.4

5.9

9.6

Total Source Sweet by the

3,804,381 2,235,781 1,568,601

7.4

author4

be granted non-tax benefits (reduced rate or full exemption from payments for the use of land, water, electricity, gas, Internet, rental of premises, etc.). The maximum lease terms for land for SEZ residents are: for housing construction, 70 years; industrial use, construction of objects of science, health care, education, culture, sports, 50 years; objects of trade, tourism, entertainment, 40 years; comprehensive use, 50 years. The lease is granted after payment of the market value of the plot. Land lease tax is not levied. After the lease expires, the contract may be renewed on an annual basis for an additional charge. SEZ residents have the right to buy property for sale. Real estate tax is paid at the rate of 1.2% of its value, or at lease, 12.0% of the rental value. When selling products on the Chinese market, SEZ residents, including foreignowned enterprises, can act independently or through intermediary state- owned companies. When setting prices for their products, SEZ residents are obliged to take into account the recommendations of local price control agencies. Product prices should match those of other Chinese companies. The five SEZs established on the east coast of Chinese mainland and Hainan (1980) to attract foreign investment continue to play an important role in the development of the national economy (Table 77.2). In 2017, the total volume of their foreign trade increased by 7.4% compared to 2016. It reached 3.8 trillion yuan, including exports, up to 2.2 trillion yuan (+5.9%), imports, up to 1.6 trillion yuan (+9.6%). The total share of SEZs in China’s foreign trade turnover was 13.7% (−1%). Also, there are 219 state-level techno-economic development zones in China (Beijing, Shanghai, Guangzhou, Tianjin, Dalian, Harbin, Urumqi, Wuhan, Chongqing, Hangzhou, Shenyang, Changchun, Yingkou and other major cities) and high technology. Existing 12 SEZs (Tianjin, Dalian, Guangzhou, Ningbo, Zhangjiang, Haikou, Xiamen, Fuzhou, Qingdao, Shantou, Zhuhai, Shenzhen) and 4 FigOvCki. O., Gymapov B. Innovacionna. cictema Kita.—ocnova .konomiki ctpany [.lektponny. pecypc].—Doctypen iz: http://iee.org.ua/ru/publication/298/; Ban Qao Covpemenna. .konomika Kita. / Ban Qao, C.C. Polonik; Belopyccki. gocydapctvenny. ynivepcitet.—Minck: Ppavo i .konomika, 2016.—157 c.; 5 cpecialbnyx .konomiqeckix zon [.lektponny. pecypc].—Doctypen iz: http://91.206.121.217/…/!Pytevoditelb%20d l.%20bizneca%20kita.%202018.docx.

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Table 77.3 Sectoral development of clusters in China Ranking of clusters by type of economic activity

Cluster location

Industrial Cluster of Zhangjiang Integrated Circuits

Shanghai

An industrial cluster of computer software products

Chengdu

Industrial cluster of stamping production

Huangyan

Industrial cluster of rail transport equipment

Zhuzhou

Industrial cluster of semiconductors and lighting products

Yangzhou

Industrial cluster of new metals

Dianyang

Industrial Cluster of Shoe Industry

Jinjiang

Industrial cluster of fittings for heating systems

Taizhou

Industrial cluster of engineering and construction machinery

Changsha

Industrial cluster of complete machinery and equipment

Shenyang

Shipbuilding Industrial Cluster (2 units): -------- “STX Offshore & Shipbuilding” -------- “China Shipbuilding Industry Corporation”

Dalian

Source Sweet by the author5

16 state border cross-border economic cooperation areas (Heiheng, Heinhei), Manchouli, Erlian (Inner Mongolia Autonomous Region), Hunchun (Jilin Province), Dandong (Liaoning Province), Inin, Bole, Tachen, Zimunay (Xinjiang-Uygur Autonomous Region), Ping. Dongxing (Guangxi Zhuang Autonomous Region), Zhuli, Wanting, Hekou, Linzang (Yunnan Province) also receive benefits from the state. There are 11 pilot SEZs in the central subordination region (China, Shanghai, Tianjin, Chongqing and Guangdong, Fujian, Liaoning, Zhejiang, Henan, Hubei, Sichuan, Shaanxi) in China. In modern conditions of development of the state economic policy of the PRC on an innovative basis, its functioning is a function of clusters. It should be noted that in recent decades their formation has been active. During this period, 150 units were created. Clusters are formed under the influence of factors such as: the geography of the potential cluster (its location); sector (based on statistical and documentary data), beneficiaries of financial or regional support (enterprises, higher education institutions, research institutions, etc.). The development of clusters in the PRC by type of economic activity is shown in Table 77.3.

5

.ffEktivnoctb koncentpacii ppomyxlennyx ppoizvodctv / Pod ped. L.B. Kozlovckogo, A.D. Pavlovo..—Minck, 1970.—145 c.; Lenqyk E.B., Blackin G.A. Klactepny. poxod v ctpategi innovacionnogo pazviti. zapybe.nyx ctpan [Elektponni. pecypc].—Doctypen iz: http:// www. institutiones.com; Kle.nep G.B., Kaqalov P.M., Hagpydna. H.B. Cintez ctpategii klactepa na ocnove cictemnointegpacionno. ctpategii // Hayka-Obpazovanie-Innovacii.—2008. №7.—C.1821.; Bo.napenko M.P. Koncepci. klactepiv—xl.x do vidpod.enn. vipobnictva na pegionalbnomy pivni / M.P. Bo.napenko // Ekonomict.—2000.—№1.—C.29–33.;

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The creation of a cluster in the PRC mainly occurs under one of several existing top-down scenarios (creation of advisory and monitoring bodies, cluster development strategies). There is also a manifestation of a mixed type of cluster creation (a combination of two paths “bottom-up” and “top-down”). According to the existing international typology of clusters in China, the following types of clusters are distinguished: . “Inactive” or “underperforming” (perform an educational function that is partially used) . “Potential” (show some key characteristics, there is a lack of production resources, lack of “critical mass”) . “Working” or “over-performing” (self-sufficient clusters that produce a significant number of products). In China, there are also features of the separation of clusters, based on the features of technological parameters: industrial (engaged in the production of traditional goods); innovative or intellectual (they have a significant share of the cluster’s innovative products, as well as the developed innovative infrastructure). It should be noted that in the PRC, clusters are created at the initiative of the government and the regions as special zones for the development of high-tech industries (automotive, electrical engineering, mobile phone manufacturing). The advantages of high-tech clusters are that they are focused on structural restructuring of the economy and strengthening of competitiveness. However, there are some drawbacks. In particular: most regions are similar in types of economic activity, thereby duplicating and over-investing in similar technologies; lack of preconditions for development in the region (high level of absorption of new technologies, necessary resources, etc.), as well as reduction of the number of jobs. Participants in the functioning of clusters are: enterprises (organizations, firms) that specialize in the development of priority types of economic activity; firmssuppliers of goods/services for specialized enterprises; enterprises (organizations, firms) engaged in the service of the public sectors (infrastructure: transport, energy, environmental protection, etc.); organization of market infrastructure (consulting, auditing, insurance, credit, etc.); non-profit and public organizations, business associations, chambers of commerce and industry; research and education organizations; organization of innovative infrastructure, support infrastructure for small and medium-sized enterprises (industrial parks, technological parks, business incubators, technology transfer centers, energy saving centers, subcontract support centers); business development centers and agencies, regional and municipal development, investment attraction, commodity export support agencies, state and municipal entrepreneurship support funds, credit support funds and more. Pazvitie klactepov: cywnoctb, aktyalbnye podxody, zapybe.ny. opyt / avt.coct. C.F. P.tikin, T.P. Bykova.—Minck: Tece., 2008.—72 c.; Pomanova ..A. Opganizacionno-.konomiqeckie ocnovy pazviti. koopepacii na pegionalbnom ypovne (teopi., metodologi., ppaktika): avtopef. dic. …d-pa .kon. nayk: 05.00.05 / Pomanova ..A.Pocci.cki. yn-t koopepacii.—M., 2008. 40 c.

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Depending on the role of the state in the process of creating and developing clusters in the PRC, there are several types of support: a full cycle (the state implements a long-term plan for the development of the territory, taking into account its sectoral specialization; contributes to creating favorable conditions for companies that are leaders of cluster development) and fragmentary support (support is provided for creating a cluster whose activities are adjusted through the use of economic policy instruments). The cluster initiative in the PRC, like other countries in the world, is based on the implementation of a national cluster development program. It identifies two areas of government support: the initiation of clusters at the expense of a country-wide project; support for existing clusters and bottom-up initiatives. A cluster strategy (priorities for cluster organization and development) and a cluster program (measures, deadlines, responsible executors, etc.) are also implemented. The cluster strategy is part of the national innovation strategy of the country where the importance of the government is reduced to the fixing of general economic rules. The implementation of specific cluster initiatives belongs to the regional administration and municipalities. Co-operation between clusters and the Chamber of Commerce (CCI) is an important issue. CCIs are active partners of the cluster, as they are part of the cluster or contribute to the creation of a favorable investment environment for its development. Forms of cooperation between them can be as follows: . CCI is a member of its own structures, takes part in the activities of the cluster, provides part of the services to enterprises . CCI temporarily caters to the enterprises belonging to the cluster in different spheres (intellectual resources of the enterprise, innovative support, internationalization of enterprises, etc.) . CCI engages its members in the cluster and explains the procedure for creating and operating the cluster. Based on the analysis, we can draw the following conclusions. . Functioning of clusters occurs through interaction between state authorities and local self-government, business, science, education. . There is a variety of forms and methods for ensuring the development of clusters that differ in national features, the concept of a cluster approach. . The application of the cluster approach can be considered as a regular stage of development of the country’s economy; clusters stimulate the development of small and medium-sized businesses. . Under existing legislation, certain instruments are used to support the creation and development of clusters operating in the PRC: the creation of clusters is with the consent of the municipal authority and is agreed by the central board of special areas for the development of high-tech industries; the central government selects firms that are granted benefits (information and biotechnology); much attention is given to developing its own innovations and improving the technological level of products in order to reduce the gap between the competitiveness of the Chinese economy and the developed countries, thereby establishing a network of

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universities’ technology licensing offices in the country’s government. It promotes the cooperation among business, academic and university science, as well as commercialization of results of research work, and intensification of competition. Industrial parks are one of the effective ways of increasing the activity of industrial enterprises by creating new forms of organization of innovative activity, which in the PRC operates 54 units. Their creation is due to such factors as: . Industrial parks contribute to increasing the investment attractiveness for domestic and foreign investors, in particular the production of high- tech products . Development of industrial parks allows to concentrate industrial production on limited areas outside large cities . Industrial parks provide an increase in local budget revenues, primarily through the creation of additional jobs and an increase in the average wage . Support in carrying out modernization and restructuring of enterprises of all types of economic activity in order to increase their profitability and competitiveness . Creating conditions for improving the welfare and purchasing power of the region’s population . The state has a legitimate opportunity to “subsidize” investment activity, reducing the real costs of business, etc. The most famous in China and promising are such industrial parks as6 the following. . China’s Lianyungang Xinpu Industrial Park (Jiangsu Province). It covers an area of 800 ha and the total area of real estate is 200 million m2 . Specialization of industrial activity of industrial park-textile production, aircraft building, shipbuilding, trade and sales activity, carrying out of scientific research and implementation of developments, etc. The volume of investment attraction is 4 billion yuan. . China Industrial Park in Hangzhou (1993). It covers an area of 5000 ha. The activity of the industrial park is related to the involvement of 180 companies,

6 mgopov I..., Bo.ko O.M. Inctityci.no-ppavovi zacadi wodo fynkcionyvann. indyctpialbnix ta texnologiqnix papkiv v Ukpa|ni: piziki ta pepcpektivi. Mi.napodna naykovo-ppaktiqna konfepenci. “The Productive Capacity of a Nation: Case of Ukraine” (29-30 qepvn. 2017 p.).—K.: Ki|vcbki. nacionalbni. ynivepcitet im. T. Xevqenka, 2017—C.123-127.; Bo.ko O.M. Pozvitok innovaci.nogo cepedoviwa Ukpa|ni v pvpope.cbkomy naykovo-texnologiqnomy ppoctopi Ekonomiqni. vicnik ynivepcitety: zb. nayk. ppacb yqenix ta acpipantiv / DBHZ «Pepe.clav-Xmelbnicbki. dep.avni. pedagogiqni. ynivepcitet imeni Gpigopi. Ckovopodi».—Pepe.clav-Xmelbnicbki.: DBHZ «Pepe.clav-Xmelbnicbki. dep.avni. pedagogiqni. ynivepcitet imeni Gpigopi. Ckovopodi», 2017.—C. 243-251.; Bo.ko E.H. .konomiqecki. po.c xelkovogo pyti: pepcpektivy dl. Ukpainy. Ctpategi. pazviti. .konomiki Belapyci: vyzovy, inctpymenty pealizacii i pepcpektivy: cbopnik nayqnyx ctate.. B 4 q. Q. 2 / Hacionalbna. akademi. nayk Belapyci, Inctityt .konomiki HAH Belapyci; pedkol.: B. I. Belbcki. [i dp.].—Minck: Inctityt cictemnyx iccledovani. v APK HAH Belapyci, 2017. –C.81-88.; Galac.k B.B. Indyctpialbni papki: cvitovi. docvid ta pepcpektivi ctvopenn. v Ukpa|ni / Ekonomiqni. analiz.—Tom. 28 №1.—2018.—C. 40-50.

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including overseas (“IBM”, “LG”, “Pepsi”, “Merck Sharp & Dohme”, “Panasonic”, etc.). Total revenue is over $5 billion per year. The industrial park development strategy is related to the development of such economic activities in the region as electronics, food production, mechanical engineering, and biomedicine. . China-Singapore Industrial Park “Suzhou–Singapore,” covering an area of 260 km2 . There are 330 companies in the territory (79 of the largest Fortune 500 corporations in the world). The number of employees is 35,000. Investment attracted: $100 billion. The peculiarity of the industrial park is that it is the object of joint development of the People’s Republic of China and Singapore (the shares are distributed as follows: 52.0% of the shares belong to a consortium of Chinese companies, 28.0% to a Singapore consortium, 10.0% to The Hong Kong and China Gas Co., Ltd., 5.0%—Singapore CPG Corporation Pte., Ltd., 5.0%— Suzhou New District High-tech Industrial Stock Co., Ltd.). The authorized capital of the industrial park was initially $50 million. It subsequently increased to $100 million (1995), reaching $125 million (2005). For the purpose of the successful development of the facility, three-tier governing and working bodies have been established, which are a joint council of the governments of China and Singapore, a bilateral committee, specific liaison agencies and more. A special city development planning system is in place, which provides for the development of a detailed plan. In particular, the ability to combine Chinese specificity with Singaporean experience in urban planning and construction, economic development, public administration and more. Six state-of-the-art technical platforms have been organized for local biomedical companies operating in the field of drug analysis services, testing of new drugs, drug screening technologies and more. . China-Belarus industrial “Great Stone,” with a total area of 112.5 km2 . The project is being developed within the framework of intergovernmental ChineseBelarusian cooperation and signed relevant intergovernmental documents. Any company, regardless of the country of origin, can serve as a resident of an industrial park. A favorable investment climate has been created for the residents of the industrial park, guaranteed both by national law and by special international agreements and obligations. In particular, these are preferences such as: preferential taxation under the formula “10 + 10” (exemption from all corporate taxes for 10 years from the moment of registration as a resident of the park and reduction of the current tax rates by 50.0% in the next 10 years of activity in the park); free customs regime, which gives the right without payment of customs duties (duties, excise duties) to import goods (raw materials, materials), provided they are further processed and exported outside the Customs Union countries; a fixed rate of individual income tax was set for employees of industrial park enterprises: 9.0%, (25.0% less than the national average); residents of the park, as well as their employees from among foreign citizens, are exempted from payment of compulsory insurance contributions from the fund of their wages. Compulsory insurance premiums are not charged on the part of the income of workers of the residents of the Park from among the citizens of the Republic of Belarus exceeding the one-time average monthly wage in the Republic; deduction in full of the value added tax paid in the purchase of goods (works, services, property rights) used

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for the design, construction and equipment of buildings and structures in the park; exemption (within 5 years from the year of occurrence of the gross profit of the resident of the park) from the income tax on dividends accrued to the founders; permission to use foreign currency, securities and (or) payment documents in foreign currency when making payments between residents of the industrial park and residents of the Republic of Belarus on currency transactions aimed at the design and construction of park facilities; exemption from compensation for losses of agricultural and (or) forestry production caused by the seizure or temporary occupation of agricultural land and forest land within the park, as well as compensation plantings and compensation payments are removed, transplanted objects of plant life, compensation to wildlife objects and (or) their environment; other preferences.7 Analyzing the features of industrial parks in the PRC, we can conclude that: . The objectives of their creation in different countries are determined by the priority of the tasks facing a particular country/region . The following approaches should be taken into account when creating an industrial park: “From the site” (there is a land plot on the territory of which industrial production is required); “From task” (site for specialized production and industrial park is selected) . Characteristic features of IP formation and development are: location near the settlement, availability of large logistics centers, development of a single concept of development of the complex, provision of modern communication services . Depending on the type of services provided to the residents of the park, distinguish the following types of industrial parks: Greenfield Park (offers the resident an unbuilt plot of land (purchase and/or lease) for construction for production, possible to provide construction services on request, built to suit); Brownfield Park (offers the purchase and/or lease to existing industrial park residents of ready-made manufacturing, warehouse, administration, infrastructure buildings and structures, reconstruction and/or major repairs); Complex park (combines the features of two previous industrial parks); Eco-Industrial Park, “a community of manufacturing businesses operating on the basis of joint ownership” where “each business unit seeks to improve the interaction of environmental, economic, and social functions through cooperation in environmental and resource issues”8 7 BO.kO E.H. Ctpyktypnye coctavl..wie innovacionno. cpedy nacionalbno. .konomiki: Ukpaina i dpygie ctpany mipa Matepialy dokladov me.dynapodno. nayqno-ppaktiqecko. konfepencii «cocialbno- .konomiqeckoe pazvitie opganizaci. i pegionov Belapyci: .ffektivnoctb i innovacii», pocv.wenno. gody nayki.—Bitebck: UO “BGTU”, 2017.—C.112–132.; Indyctpialbni papki v Ukpa|ni: ppoblemi ctanovlenn. ta pepcpektivi pozvitky: monogpafi. / mgopov I..., Bo.ko O.M., Gpiga B...; nayk. ped. mgopov I...—HAH Ukpa|ni, DU “Inctityt ekonomiki ta ppognozyvann. HAH Ukpa|ni”, Minictepctvo ekonomiqnogo pozvitky i topgivli Ukpa|ni, Haykovo-doclidni. ekonomiqni. inctityt.—K., 2015.—140 c. 8 Porter M.E. Clusters and Competition. / Porter M.E. // On Competition. Cambridge: Harvard Business Review.—1988.—Nov. Dec.—Vol. 76.—No.6.—P. 77.; .ffektivnoctb koncentpacii

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. The industrial park has clear sectoral priorities related to the historical development of the region and is oriented towards its investment attractiveness . The initiators of the creation of industrial parks are: state bodies for economic development, management companies, owners of industrial real estate and industrial land, universities . In the world practice there are schemes for the creation of an industrial park: purchase from an existing enterprise of land and buildings, leasing them to the same or new enterprise in cash or after reconstruction, development and expansion of the territory for new users; purchase of land and construction of a facility for a specific enterprise under the guarantee of long-term lease, in particular “construction under obligation”; design and construction of an industrial park, search for tenants or buyers for prepared sites and buildings . In most industrial parks there is a separate own professionally managed management company, which deals with the search and attraction of investors . There are two models of state support for the creation and development of industrial parks: Asian (the state can provide land for the project, offer incentives for attracting labor, as well as help attract international financing for infrastructure development; improvement and other issues related to the establishment of an industrial park) are engaged in private companies), and American (public development agencies responsible for most industrial parks that host production; project to create industrial pairs s funded mainly through the implementation of national and international development programs) . Distinguish models of management of industrial parks: they operate with the support of the development of the management company (providing the enterprises with the territory for the location of production, infrastructure development and other services); develop without a management company (enterprises that have located production in the industrial park provide the necessary services or involve other companies); one of the operating enterprises in the territory of the industrial park performs the functions of a management company. Of interest is the three-tier model of management of China-Belarus Industrial Park “Great Stone”: an intergovernmental coordination council (coordinating body), the main function is to set strategic goals and coordinate support for the work of the park, addressing issues that require the participation of governments of the two parties; the administration of the industrial park (management body), function-prompt and high-quality comprehensive services to investors (obtaining the necessary permits, approvals and other state services) on the principle of “one window”; industrial park development company, whose function is to build infrastructure and other facilities for business development, investor search . The status of an industrial park may be granted to a specific territory under the following conditions: the land is owned or leased by a management company that develops a plan for the development of the respective territory; engineering infrastructure is present, and the management company assists residents in the ppomyxlennyx ppoizvodctv / Pod ped. L.B. Kozlovckogo, A.D. Pavlovo..—Minck, 1970.—145 c.

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process of connection to communications, provides protection of the territory, fire safety, etc.; the management company assists the residents in setting up their own businesses, with some authority over the location of the facilities within the industrial park, acting as an intermediary between the investor and the regional administration; management company provides investors with business services (secretarial, courier, logistics, accounting, personnel search, etc.) . Types of state support for the development of industrial parks: co-financing of investment projects (the investor represents the project of construction of the enterprise in the territory of the industrial park; the state partially commits to financing, including the provision of tax benefits, direct transfer, provision of preferential lending, etc.); indirect reduction of investor costs, except for the maintenance of an industrial park (the state provides training, accommodation of highly qualified specialists, security of industrial facilities, partial social insurance); simplification of permitting and licensing procedures; granting tax and customs preferences . The issue of the application of tax investment incentives, in particular preferential rates on income tax, is of particular importance for the creation and development of industrial parks; exemption from import duties on equipment and equipment imported by participants of the industrial park; exemption from payment of real estate tax; exemption from the land tax; exemption from land lease tax; exemption from environmental taxes and the like.

Chapter 78

China’s Progress: 70 Years on and, Despite All Challenges, Still Aiming Higher and Higher Livio Santos De Leite Ribeiro

In the beginning of October 2019, China celebrated the 70th anniversary of the People’s Republic of China. From a secondary role by mid-twentieth century, China evolved into a superpower, with far reaching ascendance over the world. There is much to celebrate, much to remember and much to do going forward. Over the first three decades of the regime, the Communist Party pushed for higher social and economic development, not always smoothly. Ventures such as the Great Leap Forward and the Cultural Revolution, intended to speed-up Chinese progress under the Founding Father Mao Zedong, led to negative side effects that jeopardized their seminal objectives. Other events, such as the rupture with the USSR and internal political turbulence after Mao’s death, pushed China further into turmoil. Usually, that period is harshly judged, and viewed, especially by foreigners, as chaotic. Yet, very important developments were also made and have to be remembered: literacy rates rose aggressively, living standards (measured by life expectancy) improved, industrial capacity was strengthened and the first bridges with the outer world were established after Nixon-Zedong meetings in 1972. Despite obvious jitters, those were not lost years. The first three decades of the People’s Republic of China set the ground for the actual leap forward, implemented in December 1978 under Deng Xiaoping’s program of “Reform and Opening up”. From an underdeveloped, rural, and isolated (both politically and economically) country, Deng’s reforms reconfigured China’s global role and led to the biggest economic and social transformation ever implemented. After four decades of economic growth (sometimes at breathtaking rates), China emerged to become the biggest global economic (when measured in PPP terms), pushing one billion of its citizens out of poverty. Needless to say, this process

L. S. De Leite Ribeiro (B) Getulio Vargas Foundation, Brazilian Institute of Economics, Rio de Janeiro, Brazil e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_78

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has had far reaching impacts, changing economics, geopolitics, prices, and global development patterns. Nowadays it is virtually impossible to find someone who does not own a good either produced or designed in China. Its amazing production capacity and productivity led to lower industrial prices everywhere, making staple goods such as electronics much more affordable. The urge to grow, to improve Chinese living standards and to build infrastructure has changed the global demand balance for commodities, such as food, energy, and ores. Everyone talks about Chinese demand for soybeans, iron ore, oil, and protein. Yet analysts forget data that are even more striking. For example, from 1949 to 1979, just 200 thousand Chinese traveled abroad. Only in 2017, 131 million of did so.1 Clearly, China’s emergence had also relevant impacts on the global demand for services, culture, and leisure. China has become one of the global powerhouses and, for many, the biggest one. Its share on the global economy rose from 1.8% in 1978 to 18.2% in 2017. It became the biggest exporter, surpassing Germany, in late 2010.2 In 1978, its GDP per capita was comparable to Zambia’s; by 2017, it had increased by 50 times.3 In November 2018, an article on South China Morning Post asked: “Was China that changed the world or the world that has changed China?”4 The answer, as the question, clearly goes on both ways. Nonetheless, things had to evolve. The growth pattern implemented since 1979, based primarily on investments and external-led demand, has reached its limits. It gave China a lot but started to create relevant imbalances that needed to be tackled: rising debt, pollution, inefficiencies, zombie-sectors, inequality, and declining living standards. Talks about an economic growth transition started by mid-2000’s, but the Global Financial Crisis of 2008–2009 delayed its implementation. On that specific juncture, China pushed into a comprehensive impulse program, not only avoiding a local recession but also boosting growth on a global scale. Things would have been far worse if Chinese policymakers did not act promptly to avoid a more pronounced slowdown, and this Chinese prominence was recognized not only abroad but also domestically. Yet, changes had to occur. Ever since 2012, President Xi Jinping has been pushing into an economic transformation, shifting the gears of the Chinese development. The investment/export-led economy is giving space to a services/ domestic absorption driven one. Supply adjustments have been implemented, reducing spare capacity in 1

National China Tourism Administration, Annual report 2017, available at: http://www.at0086. com/CNTA/. 2 IMF World Economic Outlook (WEO), Multiple Reports, available at: https://www. imf.org/en/Publications/ WEO#targetText = Description%3A%20Global%20growth%20is%20 projected,to%20the%20outlook%20are%20 mounting. 3 World Bank Database, available at: https://data.worldbank.org/. 4 “Over 40 Years of Diplomatic Drama, a Rising China Opens up to, and Transforms, the World,” South China Morning Post, November 12, 2018, available (in English) at: https://www.scmp.com/ news/china/diplomacy/ article/2172540/over-40-years-diplomatic-drama- rising-china-opens-and.

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some key sectors. Pollution has been reduced, with a relevant drive into green energy and renewable sources. Financial regulation has been (continuously) revamped and improved. Rising wages and the construction of a social welfare structure boosted consumption and, therefore, helped raise living standards. Productivity gains are being achieved by strong governmental support,5 investment in R&D6 and human capital accumulation due to better education, obtained not only in China but also on topquality institutions abroad. Many don’t realize, but the China is already a services economy (in the sense that its share is above 50% of GDP) since 2015 and a global leader in top-tier technologies such as green energy, telecommunications and artificial intelligence. Growth rates have been decreasing, from a record-high of above 14% in 2007 to 6,6% in 2018. Many are skeptical or worried about these declining growth rates, posting that China is getting closer and closer to a hard landing. They shouldn’t be. If one looks at the structural factors, growth must/should decrease even further: smaller population growth rates, smaller investments (as a mirror of smaller savings/higher consumption) and important productivity gains (due to human or physical capital accumulation), yet insufficient to compensate for the other two declining growth drivers. Less volume but more quality: precisely what the economic growth transition is all about. The evolving economy comes pari passu with an evolving international role. After decades of relative isolationism and side-roles on geopolitical issues, China became an active player on the international arena. With the benefit of the retrospective, the point of rupture seems to be the global financial crisis of 2008: with its roots on the developed world (the United States of America), it became clear that foreign rules or development directives were not “ written in stone.” China’s active role when the Crisis emerged was not only praised, but also openly envied, fostering the sentiment of self-determination and leadership. Under Xi Jinping, the active role of China’s diplomacy reached new heights. During his first five-year term, President Xi hosted five grand global summits and traveled to 56 countries. China never had such prominence and deep impact on global development, building-up external arms such as the Asian Investment and Infrastructure Bank (AIIB), the One Belt-One Road Initiative (OBOR) and the New Development Bank (NDB), also known as the Development Bank of the BRICS (Brazil, Russia, India, China, and South Africa).7

5

The China 2025 Initiative, aimed at increasing the value added by the Chinese industry by mid2020’s, discussion available at: https://fas.org/sgp/crs/row/IF10964.pdf. 6 The UNESCO Institute for Statistics shows that China has the second biggest R&D budget in the world, just behind the United States. On GDP basis, it invests a bit more than 2% of GDP on R&D yearly. Available at: http://uis.unesco.org/. 7 “Quarenta anos das reformas de Deng Xiaoping e o renascimento da China como potência,” EcoDebate, December 12, 2018, available (in Portuguese) at: http://www.ihu.unisinos.br/188-not icias/noticias-2018/585404-quarenta-anos-das-reformas-de-deng-xiaoping-e-o-renascimento-dachina-como-potencia.

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Furthermore, China became the culprit of economic liberalism and globalization, pushing to reform existing multilateral organizations such as the World Trade Organization (WTO), the International Monetary Fund (IMF), the World Bank and the United Nations. If feeling impossible to breach resistances, China led new initiatives, such as the aforementioned banks and multilateral institutions. Chinese branding has also evolved, and the “Chinese way” is sold, with some success, as an alternative to the “American way.” It is noteworthy that this is an official agenda, boosted by President Xi himself and by venues such as OBOR and Confucius Institutes spread all over the world. Recent official speeches clearly show the desire to have an active voice in the international scenario and to promote “Socialism with Chinese characteristics.” Quoting President Xi at the 19th National Congress of the Communist Party (2017): Socialism with Chinese characteristics is now flying high and proud for all to see… a new trail for other developing countries to achieve modernization… to speed up their development while preserving their independence… it offers Chinese wisdom and a Chinese approach to solving the problems facing mankind.8

Last, but not least, hard power. China embraced its role as a military leader, projecting power throughout the Chinese Sea, the Malacca Strait, the Horn of Africa, and the Middle East. Due to joint exercises with other military forces (especially maritime ones), the creation of overseas military bases and peacekeeping operations, China changed its long-lasting strategy of military isolation and became a true global player. Clearly, China now desires to set the tone. This active role is not only due to its bigger global economic relevance, and therefore the rightful necessity to defend its interests and investments, but also due to two “power vacuums.” The older one came with the dissolution of the USSR at the end of the 1980’s, leaving blanks especially on Africa and Central Asia that have been progressively filled by China (with influence, money, investments, and military presence). The newer one, and much more important nowadays, came with the different posture of the United States of America under President Trump’s administration. The current American administration disengaged on several external fronts, pulling-out of deals and multilateral organizations. From architects of the global order and leaders of the multilateral governance, the Americans became source of noise and disruption. That obviously created a leadership vacuum and, once again, rightfully, China understood it as an opportunity to push its demands, its interests, and its way of thinking. In conclusion, China has already emerged as a global superpower. In order to solidify China’s development model as viable alternative to the Western (American) way, two key imperatives must be delivered over the coming years. 8

“Secure a Decisive Victory in Building a Moderately Prosperous Society in All Respects and Strive for the Great Success of Socialism with Chinese Characteristics for a New Era,” 19th National Congress of the Communist Party of China, Beijing, October 18, 2017, available at: http://www. xinhuanet.com/english/download/Xi_Jinping’s_report_at_19th_CPC_National_Congress.pdf.

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First, China has to become a high-income economy in terms of GDP per capita, thus breaching the middle-income trap. Chinese officials have been studying not only successful cases (for instance, South Korea and Japan) but also failures (for instance, Mexico and Brazil), in order to adapt its growth model and to increase the odds of higher development. The economic growth transition, the official support to innovation and R&D investments within the “China 2025” framework are all aimed at turning China into a high-income country. Second, China must ensure that its “power projection” venues are accomplished, especially the OBOR and the several multilateral investment banks and agencies. By accomplishing, we mean pushing through the logistics and financial integration, building-up a supply chain with China on top of it and delivering the world a showcase of a development model that is both sustainable and efficient, in terms of paying for itself, delivering gains that are bigger than costs for every actor involved. Obviously, China’s emergence will imply dire straits and neither of these goals will be easily achieved. As we speak amidst the 70th anniversary of the People’s Republic of China, the outside world, beginning, but not solely, with the United States of America, is worried about China’s aspirations to become a global geopolitical leader. Even more, Chinese economic and technological leadership already spooks a handful of countries, going far beyond the United States. In that sense, the Trade War and most recent “tech jitters” between United States and China are just the very tip of the iceberg. It never was, and never will be, about trading goods: it is all about geopolitics, global influence, and technological innovation. In the end, it is about understanding which country will be the prominent superpower going forward. Whenever a large ship sails, its wakes will agitate the water. Some will use them to move faster, but others will be disturbed. Above all, China must convince global players, including the United States, that its tides won’t be strong enough to put them in danger. That applies not only to developed countries but also to other ones that, at first, would do quite well with a bigger and stronger China, among them, Brazil. If opposition does not abate, then China must reinforce its willingness and right to move forward. China watchers know something: nothing comes without struggle and perseverance. The Chinese society understands that, eventually, sacrifices have to be made in favor of a bigger objective. That applied in the past and, certainly, will also apply in the future. Once again, quoting President Xi, but now at the Conference on Dialogue of Asian Civilizations (2019): No civilization is superior to others. The thought that one’s own race and civilization are superior and the inclination to remold or replace other civilizations are just stupid … the Chinese economy is a sea, not a small pond. A rainstorm can destroy a small pond, but it cannot harm the sea. After numerous storms, the sea is still there.9

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Deepening Exchanges and Mutual Learning Among Civilizations For an Asian Community with a Shared Future, The Conference on Dialogue of Asian Civilizations, Beijing, May 15, 2019, available at: https://www.fmprc.gov.cn/mfa_eng/wjdt_665385/zyjh_665391/t1663857.shtml.

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Since the foundation of the People’s Republic, 70 years were due. There is still much more to come and, despite all challenges, I strongly believe that China will be aiming higher and higher.

Part VII

China and the World

Chapter 79

China and the Rebalancing of Globalisation Grzegorz W. Kolodko

China is as much as and yet merely the Middle Kingdom. While it may not be the Middle Kingdom of the whole world, then at least of Asia, where the importance of better developed economies and increasingly educated societies is on the rise. Therefore, the question is not whether China alone, but Asia with China at the forefront, is moving to take dominion over the world. Some people think that this is the case, and, even if it is not a deliberate intention of the elites ruling therein, such is the logic of the historical process. Following this interpretation, there are only 90–100 years left before the end of the Western dominance and the takeover of this position by the East. It is supposed to happen at beginning of the twenty-second century (Morris, 2010). The growing strength of Asia is much more than China. The volume of production and size of the population are rapidly increasing. The continent has almost 4 billion 500 million inhabitants in total; that is about 60% of the world population and about 55% outside the Middle East, often treated separately for geopolitical reasons.1 This large population produces 47.3% of the gross world product, GWP, slightly more than Europe and North America combined. From a slightly different perspective, it 1 The population of the Middle East is estimated at around 450 million, if we include in this part of the world also African Egypt with 97 million inhabitants (geographically Asian Sinai has around 1.4 million inhabitants) and Cyprus with only 1.2 million people. Without these two countries, the Middle East—geographically located in Asia in its entirety, apart from the small, 23 764 km2 European fragment of Turkey—it is home to about 350 million people. This is the total number of the inhabitants of Saudi Arabia, Bahrain, Iraq, Iran, Israel, Yemen, Jordan, Qatar, Kuwait, Lebanon, Oman, Palestine, Syria, Turkey and the United Arab Emirates.

G. W. Kolodko (B) Kozminski University, Warsaw, Poland e-mail: [email protected] G. W. Kolodko · G. W. Kolodko Beijing Normal University, Belt and Road School, Beijing, China © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_79

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is as many as eight percentage points more than the United States and the European Union combined. In the future, both the share of Asian population and production will continue to grow due to both the natural increase and economic growth rate being higher than the global figures. It would be pertinent to realize that once, in actual fact throughout all the centuries of the previous millennium, until around 1820 with its powerful onset of the Western World industrial revolution, Asia kept turning out over 60% of global production. In 1950, it was less than 20%, but two generations were enough to make this index more than double. China itself two hundred years ago, before the industrial revolution gained momentum; first in England and soon after in Western Europe, and before the Middle Kingdom turned its back on the world and kept itself strictly to itself, turned out almost a third of world production. Five or six generations of disastrous domestic policy and the unfavorable external circumstances, including the British and Japanese colonial practices, were enough to go dramatically down this scale to below 5% half a century ago. No wonder, then, that some authors write about China’s return to the international arena because it has already been there (Chołaj, 2011). And now a digression. My perennial efforts to avoid tautology in the form of the term “globalized world” do not seem very productive. It is so often that both in everyday language and in scientific literature this mistake is repeated! The world is global by definition, as is the globe, hence the world cannot become global (or worldwide) and the globe cannot globalize because they have always been such. What undergoes globalization is economy, trade, capital flows, technology transfer and also workforce, albeit, with significant constraints resulting from cultural, social, and political reasons, and outside the strictly economic sphere—also magnificent things like culture, and nasty things like terrorism. Globalization is a historical and spontaneous process of liberalization and integration following in its footsteps, turning hitherto largely isolated in their functioning national economies and local commodity markets into one, great, mutually interconnected and intertwined worldwide market of capital, goods, and workforce (Kołodko, 2002a and 2002b). Globalization also has its microeconomic aspect related to the networking of production and exchange by incorporating into the process of production and distribution companies from many countries, still treated as national economies, although the management process is carried out increasingly on a supranational scale (Szyma´nski, 2004 and 2011). The Asian continent is highly diverse, culturally, politically and economically, especially if it is treated literally; in geographical terms and stretched from Turkey and Israel in the west to Japan and Russian Siberia along with Kamchatka and Chukotka in the Far East. Apart from the Asian part of Russia, which is not usually included in the Asian calculations, its four main parts are China and Japan and two regional integration groups, ASEAN in Southeast Asia2 in which none of the economies

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The member countries of ASEAN, Association of Southeast Asian Nations are: Brunei, Philippines, Indonesia, Cambodia, Laos, Malaysia, Myanmar, Singapore, Thailand and Vietnam. This grouping is inhabited by about 650 million people (8.7 percent of all mankind) and produces around 10.5 global gross product (counting per purchasing power parity, PPP).

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predominates, and SAARC in South Asia,3 which is dominated by India which is a regional population (1.28 billion inhabitants), economic (7.4% of world production based on purchasing power parity, PSN) and military (military expenditure 2.5% of GDP) superpower. Of the twelve countries with more than one hundred million inhabitants, as many as seven: China, India, Indonesia (261 million), Pakistan (206), Bangladesh (159), Japan (126) and the Philippines (105) are located in Asia.4 We omit here the Eurasian Russia, which is inhabited by 142 million people, of which only a quarter lives in its Asian part. Soon, still during this decade, another country will join them: Vietnam (97 million inhabitants in 2018). It is worth adding that in this group of countries the population is decreasing only in Japan; there are fewer and fewer inhabitants every year, and at the same time they are getting older. The median is as much as 47.3 years, which means that half of the population is above this age. However, the societies of India are young (median 27.9 years) as is Bangladesh (26.7). These are very important comparisons, because aging societies are deprived of the so-called demographic dividend, which affects the supply of labor to the labor market. For this reason, ceteris paribus, one can expect in the future a faster rate of economic growth in India than in China. Of the twenty economies producing more than one percent of the world production, nine (China, India, Japan, Indonesia, Turkey, South Korea, Saudi Arabia, Iran, and Thailand) are located in Asia. Therefore, reflecting on the future role of Asia, its demographic potential and culture, political significance, and above all, economic influences, it must be borne in mind that it is almost the largest region of the world in every respect. Is it actually so that things have already gone so bad (in the West) and so good (in the East) that Americans have to resort to wicked protectionist practices to save their own skin? Or maybe the Chinese indeed are plotting and using globalization to bring the world under their heel? Is the era of Asia’s domination indeed under way with the Euro-Atlantic civilization relegated to a secondary position? Do we already need to learn Chinese first and then English?

3

SAARC member countries, South Asian Association for Regional Cooperation South Asian Association for Regional Cooperation) contains: Afghanistan, Bangladesh, Bhutan, India, Nepal, Maldives, Pakistan and Sri Lanka. These countries are inhabited by about one billion 770 million people (almost 24 percent of all mankind), who produce about 13.7 percent of the world’s gross product (counting per PPP). 4 Other countries with a population exceeding 100 million are, in the order of population size, the USA (327 million), Brazil (208), Nigeria (191), Russia (143), Mexico (125) and Ethiopia (196). Soon, this group of non-Asian countries with similarly numerous population will be joined by Egypt.

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79.1 New Silk Road There is no doubt that both the absolute position of China, the economic one and, consequently, as is the case with a great country, the political and military one, and its influence on what is happening in the world, are growing (Huang, 2017). It will remain this way in the foreseeable future because this process cannot be stopped, let alone reversed by peaceful methods; other ones are out of the question. All others must acknowledge this, regardless of their own interests and biases. And certainly, China will not turn away from the world and will not shut itself down in destructive autarky, as it once did. The size of the country has its advantages, but it is also a curse. Norway or New Zealand, Canada or Australia, Chile or Malaysia, Tunisia or Bulgaria do not have to lose sleep over power, because they are in no danger of becoming one. They are to sustain or create well-being for their citizens and that will suffice. In contrast, China, like the US and Russia, and to a lesser extent also India and Japan or France and Great Britain, as well as Brazil and Nigeria regionally, must demonstrate greatness both economically, politically, and militarily. Only countries like Singapore or Costa Rica can afford a pacifistic orientation but by no means China or the US. What needs to be done is take a leap into the future and seek reconciliation with others in addition to finding the right place in an ever-shifting world. It should be somewhat easier nowadays since some processes are running in opposite directions than before. On the one hand, China is constantly attracting the production capacities of Western corporations, transferring on that occasion their hi-tech, while placing more and more of its production abroad, this time already having modern manufacturing techniques at its disposal. On the other hand, direct investments from richer countries still go to China, but also to other economies, not only Asian ones, where wages are lower than in China. Their beneficiaries include, among others, India and Pakistan, Vietnam, Cambodia, Bangladesh, and Myanmar. The effects of the ongoing appreciation of the Chinese currency are adding to this process. It is getting stronger, so for wages of, let’s say, 3000 yuan per month, you have to spend about $475, unlike a few years ago, when for half the nominal salary of, 1500 yuan, at the exchange rate of 8.2, 183 dollars was enough. With the increase in staff production costs, which have been recently growing by 20% per year, and currency appreciation, China ceases to be as competitive as it once was. The process that previously affected countries like Japan, Singapore, South Korea and also, although on a smaller scale, Malaysia, and Thailand, is yet again being repeated.5 What is more, in the US and other highly developed economies of the West, one can notice that the tendency to outsource and offshore is inhibited. This happens in 5

Similar processes take place in other parts of the world, also in post-socialist Eastern European economies, the most developed of which can compete to an increasingly smaller extent with low wages. For example, in Poland in December 2017, the average gross monthly wage in the enterprise sector fluctuated around 1450 dollars, calculated at the current exchange rate, which at that time was subject to strong appreciation. These data refer to companies employing more than nine employees, so for the entire economy the appropriate amount may be even several hundred dollars lower.

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such cases, where low labor costs account for a relatively small share in the total production cost and sale of a specific product. There are quite striking calculations demonstrating that in the price of a 16 KB Apple iPad, which was sold on the US market for 499 dollars in 2010, the cost of Chinese labor amounted to only $8, or 1.6% (Kraemer, Linden, and Jason 2011), though perhaps more, because the calculation includes an “unidentified” labor costs category, suggesting that they were incurred outside the US and outside China. In such situation, and in the face of political pressure to stop the “export of jobs to Communist China,” a producer may conclude that even if they pay five times more for the same labor, the merchandise will be Made in USA (and with peace of mind about excuses for outsourcing and offshoring), its assembly will take place again near San Francisco and not near Shanghai. The economic calculation of costs will not be overturned, but the political narrative could be “straightened out.” This time the Chinese challenge is not derived from the old attempt to export the revolution but primarily from the export of goods and, what is more important, capital. This is accompanied by various related transactions that increase Chinese presence around the world. This can be seen in international statistics, but also with the naked eye when travelling around various parts of the world. However, what is not immediately visible and what is of great significance, is the far-reaching effects of numerous infrastructure projects financed in exchange for long-term, strategic contracts for supplying raw materials. This is particularly pronounced in Africa and in Latin America, but still on relatively smaller scale in Central Asia, the Middle East, Eastern Europe, and, what is very important and interesting, in Russian Siberia. In the future, radical changes will take place here, and the great program propagated as the New Silk Road will play a key role in this matter. This is a popular term for a program known by its official name One Belt, One Road, or OBOR, or recently more often as the Belt and Road Initiative, or BRI. It is a project of significant infrastructural investments which are intended to promote the expansion of trade between China and their foreign partners in the west, south and north. The program is aimed at cooperation with several dozen countries in Asia, the Middle East, North and East Africa and in Central and Eastern Europe. What is BRI? How to approach it? Is this a policy or an institution? Or maybe an organization or structure? I think it is best to talk about it, as the Chinese themselves have proposed, as an initiative. Or as a project. There are always two “i’s” behind any project: ideas and interests. This is the case now, although this time, unlike in the times when Chairman Mao wanted to export the communist revolution, ideas are in the background. Although some argue that China intends to expand ideologically and politically outward, it is clearly not about encouraging others to follow the Chinese path or even impose the Chinese economic and political model, but about economic reasons. Yes, in some regions of the New Silk Road, like in the countries of Central Asia (where by the way this old Silk Road beautifully thrived and left its imprint centuries ago) the system with Chinese characteristics may seem more tempting than Western liberal democracy, but in Central and Eastern Europe, it hardly inspires anyone.

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Chinese politicians and economists emphasise the imperative of continuing globalisation and there is nothing strange about it because it benefitted them more than anyone else. At the same time, they emphasise the need to change the character of the current course of the globalisation process. That is why so much is heard about the “transformation of globalisation,” which should be inclusive and fairly distribute the fruits of supranational cooperation in all fields: from the economy and the natural environment through security and technology to science and culture. In this context, the instrumental significance of BRI is being highlighted. This initiative is intended to help transform the globalisation from its current form, rejected by many, into a globalisation which will be socially more useful on a global scale than what the West has proposed. And that is why some countries, rather from outside the West, place a lot of hope in it, while others, in the West, voice certain apprehension. The former are curious about what this “globalisation with Chinese characteristics” could bring them, the latter probably would prefer not to experience it, and others are watching with interest what will come out of it. The second “i,” interests, clearly moves to the forefront. Big business, because as regards its size, it is a great project, although its scale is still not fully known, neither in Beijing. It is said that BRI encompasses 65 Asian, European, and African countries inhabited by more than 60% of the world’s population over 38.5% of its area. The trade between these countries accounts for 35% of the world turnover; their gross product is 30% of global production, and household consumption is 24% of what the whole of humanity consumes.

79.2 Belt and Road Initiative as an Instrument of Inclusive Globalisation As the Chinese authorities emphasise, BRI creates great cooperation opportunities in five fields: . cultural exchange through the promotion of interpersonal relations and cooperation . policy coordination through planning and supporting large infrastructural development projects . financial integration through strengthening the monetary policy coordination and bilateral financial cooperation . trade and investment through encouraging cross-border investments and cooperation in supply chains . facilities connectivity by creating facilities enabling contacts along the belt and road. Although the name of the project is the word “road,” it is by no means clearly delineated by the authors. There are no official maps showing where this road is supposed to lead, therefore there exist large flexibility in their charting; a specific

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cartography is being developed. Of course, in the countries that are meant to be covered by the project, the road must lead through their territory. There are also 12 African ports on the BRI map, of which 10 are located outside Egypt, which is the only country from this continent included in the project. And that is the point: who included whom and on what basis? Of course, it was China that included them, although the rules are not entirely clear. This is a fascinating geopolitical and geo-economic game, the goals of which are not clearly defined, and the rules are not entirely clear. There are many players; cards have been supposedly handed out, but nobody knows if all of them. And whether the game is played only on the table, or whether some cards are passed under it. Who is risking what and in the name of how high hypothetical win? Political declarations sin through vagueness and, of course, are full of assurances of the good will of the initiator, but in many places of Eurasia and elsewhere they arouse various reflections, doubts, suspicions, anxiety. The economic goals are still drawn with a thick line and it is impossible to form a concrete opinion about what and why, where and when, for whose money it will be built and how it will be managed. And that is how this kind of open-end game is going on. The invited participants are looking forward to it, hoping that joining a project in this phase will not cost anything, and maybe some, maybe even significant, economic benefits will be brought thereby over time. Reputation is not endangered either, because despite the exacerbating attacks coming from the West towards China, cooperation with it is something obvious. Thus, nobody has refused to participate in the project, even the countries that have not had the best relations with the Middle Kingdom lately, such as Vietnam or the Philippines. It must be strongly emphasized that only China can afford such a huge project, announced and initiated in a way that it specified on its own. If the United States proposed something similar under the name of, let us say, Great Americas and pulled out a map with an area stretching from Alaska to Tierra del Fuego, this plan would be a false start, because certainly some of the Caribbean and Latin American countries, such as Haiti and Venezuela, would not benefit from such dictum. If the European Union announced, let us say, a Euro-African project, without proper arrangements made ex ante some of the post-colonial countries might not take part in such an enterprise. Only China can afford something whereby Pakistan and India, Poland and Russia, Israel and Syria, Myanmar and Bangladesh, Saudi Arabia and Iran, Nepal and Bhutan would more than willingly and without any pre-conditions join their project. When looking at the map, the geographical criterion strikes the eye first. Almost all the countries of Asia, all of Central-Eastern Europe have been drawn to the project, and Egypt too, as what kind of road it would be if the Suez Canal was not en route. Almost all of Asia, because for political reasons the two Korean countries and Japan have not been included. It happened to the former because it was not possible to sign up only South Korea while sharp sanctions have been imposed on North Korea, so China have chosen to avoid accusations that they are cooperating with the regime in Pyongyang. The latter one, meaning Japan, was left out because relations with rich Japan are not the best, and it would be necessary to negotiate BRI with it, for which,

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unfortunately, there is no conducive atmosphere. Finland and Greece are absent from the edge of the map because they are Western European countries, and on the other side, Papua New Guinea is missing, because it is already “Australia and Oceania.” Therefore, due to the specific political correctness and simplicity of including in the map the countries through which the New Silk Road is supposed to run, i.e., its land and sea belt, such countries as East Timor or Bahrain, Macedonia and Estonia are featured, although most probably no camels will roam that way, nor a single junk will sail nearby. China basically did not ask anybody whether they wished to be included in this project. First, they signed up whoever was needed and, apart from the exceptions mentioned above, they subsequently announced it. However, if someone is not on the list, it does not mean that they are omitted at all, like Greece. Greece is not a member of NATO and the European Union, yet the port of Piraeus, which is largely in the possession of Chinese capital, is marked.6 Formally, the Latin American countries have not been invited to BRI, but the hosts refer to them as a “natural extension” and “inalienable participants” of the venture. In other words, China is carrying on as usual, investing more and more in Latin America and encouraging its companies to penetrate those markets, unlike their neighbor from the north, who quite frankly discourages such movements through Donald Trump’s behavior, offending some, especially Mexico and El Salvador. At the same time, when the American president in his typical style says that he said something different than de facto he said—this time at the World Economic Forum in Davos a year later than the Chinese president—Chinese Foreign Minister Wang Yi appeared at a meeting of all 33 countries belonging to the Commonwealth of Latin America and the Caribbean, CELAC (Spanish Comunidad de Estados Latino americanos y Caribeños) advocates against trade protectionism and offers the region “a strategy of mutual benefits and mutual profits” (Economist, 2018). In fact, nobody knows exactly how much, where, when, and how the Chinese intend to invest in land as well as sea routes when implementing the New Silk Road project. The amount of four trillion dollars appears in circulating information, which must impress everyone, even in the most affluent countries, which are a bit further, at the end of the road, in France and Great Britain, because it is more than their GDP. No wonder that in both of these countries celebration surrounded the arrival of a freight train from China which travelled a long way, using the already existing infrastructure, but also signaling the need for its modernization and expansion, which is what the New Silk Road concept is all about. It was similar in Poland, when in June 2016 a freight train arrived from China to receive a welcome on the platform in Warsaw from the presidents Andrzej Duda and Xi Jinping who was on an official visit to the banks of the Vistula river. It comes as no surprise either that Western European politicians who visited Beijing in early 2018 (in January French President 6

This is another paradox, but it is the pressure of the West, especially the so-called Big Three, i.e. the European Commission, the European Central Bank and the International Monetary Fund, that Greece should improve its fiscal situation also by privatising state property, prompted the government in Athens to sell the port of Piraeus. The investor turned out to be China COSCO Shipping Corporation.

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Emmanuel Macron, a month later the British Prime Minister Theresa May) talked about trade and investments more than about security and international relations. Everyone wishes to be on the receiving end of a four thousand-billion-dollar trickle, even a little bit. In underdeveloped countries, China contributes a good deal for the infrastructure strengthening human capital, for schools and universities, for health clinics and hospitals. For this purpose, they use a soft loan instrument, which is often partially redeemed and turns into grants. On the occasion of the implementation of projects, powerful Chinese construction companies are often involved, so it is not surprising that they are becoming global tycoons. When looking at the geopolitical map of the world from this perspective, it is fairly easy to notice that China is particularly active where the West failed. Once, in colonial times, instead of helping, the West conducted exploitation, then, in neo-colonial times, when instead of cooperating, it cheated, and recently, in times of globalization, when sometimes instead of creating areas of positive synergy, it marginalized. Interestingly, they are also active where the Soviet Union failed, especially Russia as its core. This let-down is still casting a long shadow over politics and economy, as well as over culture and mentality in Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan. Geography and history may have gone their way, but contemporary interests have their own agenda, which is clearly visible in the area of these post-Soviet Central Asian republics. In this very interesting region, and one by no means automatically set to maintain political stability and sustainable development, we have a unique mix, as it is the crossroads of deeply rooted features resulting from Russian, Asian and Islamic influences, as well as Soviet legacy. Now the impact of the Chinese is added to all of these along with Western influences. The latter is due to, on the one hand, the significance of the region in the fight against international terrorism, whose tentacles reach these lands, and, on the other one, because of the rich energy resources which are relevant in the global accounts. By the way, it is worth noting that the geographical location, which economy and politics do not choose, may be a blessing, as in the case of Switzerland sandwiched between Germany, France, Italy and Austria, or may be a curse, as experienced by Iraq lying between Iran, Turkey and Saudi Arabia. It is upon the political skill and ability to implement beneficial national strategies for socioeconomic development to determine whether the post-Soviet Central Asian republics, which occupy a prominent place on the New Silk Road route, will also use this aspect of their position to their own advantage or whether others will take advantage of them. If someone is located in the zone where China and the United States or the European Union and Russia are vying for influence, there is a lot to lose just as quite a lot to win on that. For this to happen, however, in the first place one cannot allow themselves to be antagonized either with one another or in the relations with these great global players.

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79.3 “Global Expansion” of China Although, obviously, Chinese activity contributes to poverty reduction and supports socioeconomic development, also for this reason China is suspected and even accused of bad intentions, ideological indoctrination and of political corruption. If that was the case, even partially, it would not change the fact that such a strategy helps other economies being at a lower level of advancement in their struggle for emancipation. And if it threatens the balance of influences, then instead of unproductive criticism of Chinese expansion, it is better to increase one’s own support from the rich West, and pragmatically reorient the ways and directions of international organizations remaining under the prevailing influence of the West. There is nothing ill-advised (actually quite the opposite) if alongside the export of capital and goods, China also “exports” some of its good skills from the sphere of soft infrastructure. These are precisely the good practices that we are so keen to talk about in the management science (Cie´slik, 2016). As in China itself, even the fastest trains cannot run without proper traffic regulations, or more educated personnel do not automatically ensure socioeconomic progress, so even more so it cannot be successful in the economies being backward compared to China. Therefore, they can and should learn from them. Knowledge and skills are currently a particularly valuable “commodity.” I put this word in quotation marks on purpose, because it is not literally about a commodity, meaning a product of human labor intended for market exchange, because in this case it is often a matter of non-financial transfers. By using scholarships, tens of thousands of foreign students reside in China, obtaining knowledge in the fields that are preferred from the point of view of China’s external expansion. When I lectured at the Beijing Normal University for a group of 40 foreign scholarship holders, they all came from “developing” countries, amongst which the most developed ones being Turkey and Kazakhstan. Almost all of them, with the exceptions of a Polynesian from Tonga and a Caribbean man from the Bahamas, were citizens of countries that have found themselves on the New Silk Road or, lying in Africa, for similar reasons remain in the sphere of the Middle Kingdom’s interest. There are no coincidences here. China also uses its presence and growing activity in international organizations, especially the World Bank, the International Monetary Fund, and the Asian Development Bank, to influence institutional solutions, directions, and instrumentation of development policy in the countries to which these organizations channel their financial assistance and expert advice. By no means did they prevail, especially in WB and IMF, over Western influences, but increasingly often in the economies undergoing emancipation one can observe Chinese experts sent there by this or that international organization and increasingly often one can sense the “Chinese spirit.” In the wake of all of these follows a diplomatic offensive. Currently, Beijing hosts 166 embassies and has as many of its own ones worldwide. The United States has one more, 167. Soon, however, they will be overtaken in this regard, as soon as another country that has so far recognized Taiwan as the representation of China changes their mind. A remnant of the Cold War, the first one, there are still 20 embassies of Taiwan:

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as befits an island, six in the island Pacific countries and five in the Caribbean, five in Central America and one in South America, two in small African countries and in the Vatican. In time, when Taiwan is reunified with the People’s Republic of China (because it shall happen), it will be China that has the most numerous diplomatic representation in the world. Currently, taking into account not only embassies but also all diplomatic posts, China has 268 of them, and the USA have 273. For comparison, it should be mentioned that in the case of Russia, the figure is 242 posts, and France, 266. China is the largest or the second largest trading partner for around 80 countries. Therefore, it is no wonder that what is happening there largely determines what is happening elsewhere in the global economy. When it comes to Chinese exports amounting to USD 2.2 trillion the addressee number one is the United States (18.2%), followed by (without taking into account Hong Kong where the PRC sells 13.8% of exported goods) Japan (6.1%), South Korea (4.5%) and not much less to Germany. As for imports—about $425 billion less—the number one is South Korea (10.0%), followed immediately by Japan (9.2), Germany (5.4) and Australia (4.4%). Only then, with export to China being less than Australian, do the United States rank. Note, because it is interesting, that on the New Silk Road route the two neighboring countries, South Korea and Japan are absent, from which account for up to a fifth of Chinese export. To some extent it is so also because they are highly developed and have their own advanced infrastructure. Dependence on the Chinese economy is multi-threaded and goes far beyond direct export and import. In the subject literature, even a neologism has been coined: the sinodependency index, i.e., an indicator reflecting the changes in the S&P 500 stock index,7 which depends on the ranking of 135 companies included therein and earning revenues from operations in China (Economist 2012). The Chinese economy is growing, stock exchange quotations are rising, and vice versa. When in 2009–2012, marked by the global crisis, the sinodependency index increased by nearly 130%, the S&P 500 index increased by just over 50%. In other words, if it had not been for the continuation of the Chinese boom, the economic situation and stock exchanges which mirror it in many other countries, including the most developed ones, would have been much worse. Therefore, someone who wishes China ill, means harm to themselves.

79.4 Conclusion Advocating globalization while at the same time pointing to the imperative of its greater inclusion, recognizing the indispensability of reducing the scale of commercial and financial imbalance in the global economy, caring even more than some 7

S&P 500 is a stock exchange index managed by Standard &Poor’s, the value of which is determined by the quotations on the New York Stock Exchange and NASDAQ 500, the largest from the point of view of capitalisation of enterprises, mainly American ones.

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highly developed countries for ecological balance (although they contributed to its earlier disruption), China slowly takes the path of economic policy suggested by the new pragmatism (Kołodko, 2014; Bałtowski 2017; Galbraith, 2018). Neoliberalism hardly exists there, corrupt capitalism is gradually decreasing (albeit too slowly), and the notions related to new pragmatism are multiplying (Hu, 2018). China can essentially help in shaping the desired face of the future, limiting the growing global threats and the risk of a great catastrophe reaching far beyond the economic sphere. And this threat is real if, on the one hand, it was possible to re-direct the economy onto the neoliberal tracks business as usual and on the other hand if it was impossible to control the escalation of new nationalism. However, one can hope that none of them will happen, and this is largely thanks to China.8

References Bałtowski M. (2017), Evolution of Economics and the New Pragmatism of Grzegorz W. Kolodko, TIGER Working Papers, No. 136 (http://www.tiger.edu.pl/Baltowski_Evolution%20of%20econ omics%20and%20the%20new%20pragmatism%20of%20Grzegorz%20W.%20Kolodko_III% 202017.pdf). Cie´slik J. (2016), Entrepreneurship in Emerging Economies: Enhancing its Contribution to SocioEconomic Development, Palgrave MacMillan, Houndmills, Basingstoke, Hampshire. Economist (2012), Teenage Angst, The Economist, August 25th (http://www.economist.com/node/ 21560890). Economist (2018), China Moves into Latin America, The Economist, February 3rd, https://www. economist.com/news/americas/21736192-asian-giant-taking-advantage-other-powers-lack-int erest-region-china-moves. Galbraith J. K. (2018), “Backwater Economics and New Pragmatism: Institutions and Evolution in the Search for a Sustainable Economics,” TIGER Working Papers Series, No. 138, January 2018, Kozminski University, Warsaw (http://www.tiger.edu.pl/TWP%20No.%20138% 20--%20Galbraith.pdf). Hu B. (2018), “The Belt and Road Initiative and the Transformation of Globalization,” Distinguished Lectures Series, Kozminski University, No. 26, http://www.tiger.edu.pl/publikacje/dist.htm. Huang Y. (2017), Cracking the China Conundrum: Why Conventional Economic Wisdom Is Wrong, Oxford University Press, New York. Kolodko G. W. (2014), The New Pragmatism, or Economics and Policy for the Future, Acta Oeconomica, Vol. 64, No. 2, s. 139–160. KraemerK. L.,Linden G., Dedrick J. (2011), Capturing Value in Global Networks: Apple’s iPad and iPhone, PCIC Working Paper, Personal Computing Industry Center, University of California, Irvine, July, http://pcic.merage.uci.edu/papers/2011/value_ipad_iphone.pdf. Morris I. (2010), Why the West Rules—for Now: The Patterns of History and What They Reveal about the Future, Profile Books, London.

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The article was based on excerpts from the book “Czy Chiny zbawi˛a s´wiat?”, (Will China Save the World?) Prószy´nski i S-ka Publishing House, Warsaw, 2018.

Chapter 80

China: A Resilient Nation to Embrace the World Ong Tee Keat

During the seven decades since its founding, the People’s Republic of China has been subjected to severe tests, some of which were unparalleled and unprecedented in magnitude and duration. This is especially true during the first 30 years when China had to grapple with crippling domestic economy plagued by pervasive poverty, as well as to resist the continuous isolation imposed during the Cold War by the Western powers. The 1978 opening up and reform policy, spearheaded by the late Deng Xiaoping, marked a watershed moment in modern China’s progress. Forty years later, the PRC managed to transform itself into an economic powerhouse, in addition to assuming world leadership in such sectors as manufacturing, infrastructure and technological innovation. China’s success in alleviating 850 million of its citizens out of abject poverty is a feat unrivalled in human history. The China story is an inspiration to the world, as well as an ideal model to emulate, as we strive to advance global governance.

80.1 Statistics Speak Volumes To feed a populace of 1.4 billion (approximately 1/5 of world’s population) is by all accounts, an incredible challenge. And doing so under the constraints of the Cold War has indeed made it truly remarkable. To increase China’s GDP by quantum leaps from USD 156 in 1978 to USD 9771 in 2018 (tantamount to a growth of 63 times) is miraculous by any measure. This has enormously outpaced the GDP growth of US (4.9 times), Japan (3.5 times) and India (8.9 times) within the same period. O. T. Keat (B) Centre for New Inclusive Asia ( CNIA ), Selangor, Malaysia e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_80

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In 1978 before the opening up and comprehensive economic reform, China’s per capita GDP was as low as USD 156, compared to USA’s USD 10,587 and Japan’s USD 8822. China was even dwarfed by India’s GDP of USD 203 then. Four decades later in 2018, China posted an incredible surge of 61.6 times in its GDP (as compared to 1978), amounting to USD 9771. While USA’s growth in GDP remained strong at USD 62,641 (growth rate of 4.9 times as compared to 1978), Japan and India posted a respective GDP of USD 39,287 (growth of 3.5 times) and USD 2,016 (growth of 8.9 times). China’s turnaround from a weak planned economy burdened by a massive population to become the world’s second largest economy cannot be attributed solely to its admission to WTO, as some China critics would claim. They cannot ignore the fact that China’s success is the result of the Chinese technological advance and the development of a form of governance that is responsive to the people’s needs.

80.2 BRI Embracing Globalisation Since the 1990s, free trade and multilateralism have been framed as the cornerstone of globalization. But the world market is never a level playing field as the developed nations set the rules, with little regards for the economic disparity of the poorer nations. These have been blamed for the widening wealth gap, as the powerful economies forced open, and exploited the developing world markets. The third world linked to the global supply chain remains poor and undeveloped. This gives rise to many countries falling back on protectionism and unilateralism, to safeguard their respective national interests. On this account, China’s Belt & Road Initiative (BRI) serves as a new model of economic collaboration with emphasis on mutuality, namely: mutually consultative, mutually operational, and mutually beneficial (共商, 共建, 共享). This is a contrast to the prevailing US-led modus operandi, widely deemed as predatory, prioritizing the West’s security and economic interests. The China-led BRI is a new chapter in globalisation, underpinned by the principle of shared prosperity and shared destiny. The spirit of openness and cooperation is key to advancing connectivity through infrastructural development. Six years since its launch, the BRI has gained sufficient learning experience to strengthen and improve its implementation. And one critical need is for China to explain more clearly the BRI vision and mission to the world at large. This is to counter the growing vilification and negative narratives emanating from the West. In addition, China has to improve its engagement capabilities with the outside world, especially when dealing with countries with diverse ethnic, cultural and civilizational composition. To that end, more efforts should be directed towards public diplomacy, focusing on Track 2 diplomacy such as think tanks, NGOs, and academic exchanges. At the same time, Chinese enterprises involved in the BRI should undertake more CSR (Corporate Social Responsibility) initiatives to address local concerns and interests. These enterprises are the foot soldiers at the frontline, representing the

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corporate image of China Inc. Any misperception of China-centrism among the local community would provide fodder for the BRI critics, reinforcing their claims of China hegemony. The vision to forge “A Community of Shared Future for Mankind” (or a community of shared destiny) is no Utopian rhetoric. This is because the fate of all nation states is increasingly intertwined in this borderless digitalized world, more so in face of increasing global exigencies threatening the existence and survival of humankind. Amidst such an unprecedented scenario, China’s leading role, through the BRI, with its symbiotic modus operandi and value orientation should be extended to address the challenges pertaining to global governance. Over the years without doubt, Chinese technological advancement has helped to improve the quality of life of many in China and the world, though it still has to operate in the hostile environment of a unipolar world order. Together with its remarkable success in poverty eradication, China’s willingness to provide leadership in the next phase of globalization (globalization 2.0) through the BRI should be welcomed positively by the international community. In addition to the importance of connectivity in the developing and underdeveloped countries, China’s success in poverty eradication is a good model for the world to emulate. This is one example of China’s successes that could help address some of the prevailing global exigencies. While the US is blocking market access to China’s cutting-edge technologies such as 5G telecommunication and drones, the world should instead embrace an inclusive ethos, to promote innovations that could enhance the quality of life of all humankind.

80.3 A New Test Ahead In the present perspective, China’s growing global influence is unstoppable. To enhance cooperation and communications between nations, inter-civilization interactions and dialogues are imperative and should be given priority in order to forge a global community of shared destiny. This would constitute the foundation on which to cultivate tolerance and understanding across cultures, and to prepare an environment conducive to international collaboration. As a rising power in a multipolar world, China is expected to assume a leading role in this endeavor. To that end, the May 2019 Asian Civilization Dialogue held in Beijing was an apt example. This should be replicated in other countries, and even further expanded as an inter-continental initiative. These would put China’s soft skills and soft power to a new set of acid tests, which differ from the earlier technological challenges of which China has proven to be of world standards.

Chapter 81

China’s Capacity to Consolidate Economic Globalisation Jasna Plevnik

81.1 Introduction Good afternoon to everyone. I am honoured to speak at globally respected the Hongqiao International Economic Forum on the occasion of China’s 70-Year Development that has been achieved by work of many generations. China’s economic growth has made a unique contribution to development and stability of the world. And it is true that is one of the defining facts of our time. The Geoeconomic forum was established in Croatia in 2004 and at our first conference keynote speaker was Prime Minister Tun Mohamad Mahathir who talked on how financial aspects of globalisation were dangerous for Malaysia and its financial flows in 1997. However, after twenty-two years, the financial side of economic globalization resumes to destabilize the world economic order. The global financial system has continued to be subjected to US regulations and the US financial system, and here the US finds levers for its unilateral policies centered on ruining the Iran nuclear deal, ignoring the WTO, and controlling and limiting the global reach of Chinese companies. The economic globalisation is at a defining moment. The topic of my speech is China’s approach to the economic globalisation and transformation of its position through the process of constructing economic interdependence with the world since 2001–2018. Within that context will be discussed China’s ability to strength the economic globalisation through reforms and its global diplomacy. Many aspects of economic globalisation are boasted as great achievements yet, we are witnessing a strong differentiation of the world between rich and poor, with the J. Plevnik (B) Geoeconomic Forum, Zagreb, Croatia e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_81

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rapid degradation of the condition of working people not only in poor countries but developed as well. These trends drive political populism that explains that economic globalisation is the main cause of such conditions. However, economic interdependence, the other name for economic globalizsation, must go on because it has been one of the great strategic successes in connecting the world of the last three decades and has besides brought us to beautiful China and Shanghai.

81.2 China and the Economic Globalisation Since 2001 to 2018 China’s economic interdependence with the world has been developing gradually, which has resulted in expanding and bringing attention to China’s national wealth changing its position in the economic world order hierarchy. In 1978, China’s opening to the world has been understood as an instrument for attracting foreign investments and expanding the range of markets for Chinese products. Shenzhen and other Chinese manufacturing and innovative hubs have been also the results of China’s embrace of the economic globalisation. China has globalised itself accepting new global rules developed after the end of the Cold War and embracing standards of classical global governance institutions established in 1944, and 1945, under American leadership that were made to keep the peace and develop the world. A significant event in China’s history of building economic interdependence with the world was entering to the World Trade Organization (WTO) on 11 December 2001. China’s approaching to the WTO was a long complex process of compliance with the WTO rules and protocol that the European Union (EU), and the United States, imposed upon China.1 The EU has engaged similarly strictly with the Balkan countries, the candidates for the EU membership, putting on them heavier and more unrealistic economic and political obligations than had the countries that entered the EU in 2004 or before. The requirements for outsiders to become members of the WTO or the EU has become more demanding than were for founders who posted the rules for global institutions or economic regional blocks at time of their establishing. And in that way, it is unfair, but it has been and is reality. China and other countries have been globalised mostly inside the framework of the economic globalisation shaped by the United States’ standards and rules. The US had a key role in helping China to connect with the world, but it was China’s decision to open itself. China has followed its own interests according to its capacity and needs supervising its processes of building transnational market focused connections, that which has enabled it to develop its manufacturing base and increase its involvement in high technology sectors. 1

Qingjiang Kong, China and the World Trade Organization: A Legal Perspective, Imperial College Pr;, F First Edition edition, September 1, 2002.

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China has allowed the state to play a decisive role in its economic integration with the world and that approach to the economic globalisation protected China’s interests better than market forces. Southeast Europe countries have globalised themselves, associated with the process of “end of the state” that was popular “theory” in the writing on economic globalisation before global financial crisis in 2008, when it disappeared, and state came back. The results were a decreasing of their national wealth, selling their flagships companies, not making them global, and banking sectors to Western banks.2 Since 2005, China has transformed itself from an importer of capital to global investor through its direct investments and programmes of aid. In 2001, these investments amounted to a mere of $6.9 billion. In 2012, China had the position of the top third global investor, behind the United States and Japan, when its investments abroad amounted to $87 billion. At the end of 2014 the Ministry of Commerce introduced many measures to support Chinese companies. Therefore, since 2015, licenses for investment abroad were no longer necessary except in cases of vulnerable countries and areas or industries. The guidelines for overseas entrepreneurship and plans for key industries and sectors, as well as for avoiding risk, have been in line with the spirit of the policies of the 19th National Congress of the Communist Party of China. Chinese regulators have continued to limit certain investments in sports or entertainment industries. Some forecasted a slowdown in Chinese investments abroad but China’s influence in global foreign direct investment continued to be significant despite decline in its US–centric direct investments. In 2018, China was the world’s second largest overseas investor, second to Japan. The country’s accumulated overseas direct investment (ODI) reached US$1.98 trillion in 2018, ranking China third after the United States and the Netherlands.3 In 2008, China assisted greatly in resolving the global financial crisis through the G20 yet there have still been attempts in neorealist based approaches to interpret its inclusion in global governance as ambition to change the world order into direction of increasing China’s hegemony.4 Since 2013, China’s role as a subject in the economic globalization process has been further improved when President Xi Jinping launched the Belt and Road Initiative with aim to foster economic interdependence among Asia, Europe, Africa, and South America.5

2

See Jasna Plevnik, The Price of the New World Order: World Challenges to National Interests, Zagreb: Golden Marketing—Tehniˇcka knjiga, 2009, pp. 129–157. Jasna Plevnik, “Hrvatska i globalizacija,” Ekonomski pregled, no .50, 1999, pp. 1608–1629. 3 According to the Ministry of Commerce China’s outbound, direct investment (ODI) fell 9.6% to US$143.04 billion in 2018. See 2018 Statistical Bulletin of China’s Outward Foreign Direct Investment, https://www.hzs.mofcom.gov.cn/. 4 What makes China special global power see Jasna Plevnik, Stjepan Mesi´ c, “China a Special Power”, in China in the Balkans, Zagreb: Plejada, 2013 pp. 111–119. 5 Jasna Plevnik, The Belt and Road Initiative and its Implications for Southeast Europe, Belgrade: Center for international relations and sustainable development, 2016.

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In 2017, Chinese President Xi Jinping explained in detail China’s concept for the world Community with a Shared Future for Mankind in his keynote speech at the UN headquarters in Geneva on 18 January 2017. China’s strong economic interdependence with the world and its position of second economic global power has made it to think of constructing one world with a common future but not with intention to replace the United States and to continue with old structure of unipolarity in international order but to change it towards multilateralism and multipolarity. It is not hard to see that currently China has radically different requirements from the international system than it did in 1949, when it was not a member of the United Nations, World Bank, the International Monetary Fund, and vice versa. After 70 years of development, especially in the 40 years of reform and opening up, China stands as the leading nation in terms of trade, the second strongest economic power in the world, and in 2018, the second in terms of its investments abroad. That international position has further enhanced its global influence. The process of China’s globalisation is not over. Increasing of the Yuan’s circulation in the global financial system has an important role to play in further improving China’s position in financial globalization that is currently insignificant in relation to its role in global trade. China’s global reach even expanded towards Southeast Europe where China’s economic diplomacies and companies were relatively unknown before China’s government launched 17 plus 1 and the Belt and Road diplomacies. The Chinese companies in Croatia are introducing new technologies in building Pelješac Bridge and investment in a green project, the construction of the 156 MW wind farm near city Senj on the Adriatic coast. Chinese companies in Europe have accommodate its own standards to EU norms and that compliance captures the idea of economic globalisation on building one global economy. The relations between China and Southeast Europe countries are developing as a historically new kind of economic integration into the direction of Asia that might have power to move the European region into a new phase of economic globalisation. Their experience with economic globalization governed by the West over the past two decades has been mostly negative because it was not based on more justice or a win–win approach.

81.3 Challenges to Economic Globalisation We live in time of different kinds of exits: from the EU, UN agencies, and even from the economic interdependence of the world that is the most visible “product” of the ideology of economic globalisation that has dominated in post-cold world order. Since the global financial crisis to now many consulting firms specialised in assessing of global political and economic risks put at the top risk of anti-globalisation

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and the United States as a serious macro-factor for such a risk, given its internal economic and political problems that encourage protectionism.6 Although current global economic relations could still be framed by the term “economic interdependence,” there are significant differences between the current economic globalisation and that in the 1990s. Then global institutions supported unrestricted liberalization in trade, investment, and finance and celebrated export. America’s former President Bill Clinton (1993–2001) encouraged and praised the globalization of China. America was opening up to China and to different forms of mutual interconnectivity whilst since 2001 to 2016, it asked of China to work together on the developing of a multilateral system of “global governance.” In President Obama’s Administration were many experts on China. Zbigniew Brzezinski proposed developing of a new informal G2 in which America and China could address global challenges of bilateral interest. The idea of shared global leadership in a certain way was based on predictions about the division of the world into two areas: Euro-Atlantic dominated by America and an Asian dominated by China. President Obama was interested to include China more strongly in the world governance in the areas of economics, ecology and resolving of the effects of the financial crisis. China benefited from America’s pro-globalization diplomacy and the WTO, but it also returned to America and others what it gained through entering the trade system.7 Much has changed since then. In 2018, the US administration reduced its global role at the multilateral level and appeared confrontational towards its traditional trade partners China and the European Union. It has challenged the WTO’s existence and the economic world order that creates a degree of lower confidence in global governance, global trade, and markets.8 Further process of economic interdependence of the world has been challenged by the US trade war on China that started in June 2018. Beijing while negotiating with Washington continues to define common goals with the USA. Building a stable and multilateral economic world order for the twenty-first century is hardly thinkable without Washington. The current American administration is openly centered on the short-term; unilateral economic interests are crippling the economic world order and international organizations credibility. What we need to know about President Trump is that he is a politician dedicated primarily to internal affairs.9 6

See “Eurasia Group President Ian Bremmer Announces Top Risks and Red Herrings for 2008,” 7 January 2008, https://www.eurasiagroup.net/media/eurasia-group-president-ian-bremmer-announ ces-top-risks-and-red-herrings-for-2008. 7 This theme is elaborated in detail in Jasna Plevnik, Mesi´ c Stjepan “Odnosi Amerike i Kine” in Doba ekonomske diplomacije. (Zagreb: Plejada, 2011). 8 Jasna Plevnik, “Hurting China is Causing Damage to the World,” China Global TV Network, Opinion, 12:32, 24 May 2019, https://news.cgtn.com/news/.../share_p.html. 9 Cameron Munter, CEO & President of The EastWest Institute, estimates that President’s Trump measures are not fundamentally concern “Muslims or China—it is all about domestic politics.” See

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In the current Administration are some experts for China that in the broader America’s academic community are not accepted as China experts.10 However, American global financial and industrial companies continue to support economic globalisation as a central driving force behind their economic growth.

81.4 The Future of Economic Globalisation The future of economic globalisation depends on in which direction the U.S. and China relations will develop in the next decade.11 The continuity and sustainability of economic globalisation primarily depends on political decision of their leadership. China and the United States are most important pillars of today’s global economy and differences between the two powers are significant. The tissue of economic interdependence between China and the US has become strong to degree that some see it as “one economy and two systems”. China has associated its economic progress, of course, not absolutely, with economic globalisation. It has not decreased its interest in strengthening of economic interdependence and developing of multilateralism in global governance but economic ties between China and the world are changing. “China’s dependence on the world economy is relatively declining, and the world’s dependence on the Chinese economy is relatively rising.”12 The United States has become sceptical towards a further deepening of economic interdependence with China long before its current Administration proclaimed that its great national interest is unilateralism, protectionism, and borders. America is a country that possess a valuable virtue of planning its future and of the world. It was concerned two decades ago what would happen to America if China would become competitive in high value services as it was in production of consumer goods. Technology consultancy Forrester Research predicted in November 2002 that by 2015, the US would lose three million jobs in the domestic service industry, and the information technology industry would lead that exodus. In 2004, Paul A. Samuelson believed Chinese development could endanger not only the existing comparative advantages of the US and the EU, but also in the areas

Aleksandar Miladinovi´c, “Intervju petkom—Kameron Manter: Se´canja na Srbiju—deset godina kasnije”, BBC-Srbija, 1 November 2019, https://www.bbc.com/serbian/lat/balkan-50235131. 10 Melissa March, “Trump’s Top China Expert Isn’t a China Expert,” Foreign Policy, March 13, 2017, https://foreignpolicy.com/2017/03/13/peter-navarro-profile-national-trade-council-don ald-trump-china-expert/. 11 On relations between China and the United States see, Henry Kissinger, On China (Penguin Press HC, 2011). 12 For a very fine recent explanation of what this could mean, see “China and the world,” Full report, McKinsey, June 2019, https://www.mckinsey.com “media” Mckinsey “China” mgi-china-and-the.

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where they had a strategic dominance!13 In that context is easier to understand what happened to Huawei. The cost of rupturing China-US economic interdependence would have damaging effects on both countries, the world economic order, and global economic institutions. We think stressing of that point could make anti-globalisation policies and measures to be less and less accepted over time. To suggest that is to say that an important force behind economic globalisation is a huge tissue of economic interdependence that also protects the world economic order from chaos.

81.5 China’s Driving Forces Behind Economic Globalisation China occupies a second position in the economic world order and that requires its participation in the management of international economic relations as it did in 2008 when China significantly assisted in resolving the global crisis and with its growth stabilised the global economy. China’s relatively new pro-globalisation approach was launched in 2013, with the Belt and Road Initiative that is focused on building more economic interdependence between China and the world regions. Here might not be hyper to claim China with the Belt and Road has shown its new role in economic globalisation governance. The BRI stands as a long-term strategy capable to improve economic globalisation through multilateral economic development. China plans to push for the inclusion of the yuan in its trade and financial relations with the countries along BRI, both as a way to promote the increased internationalization of its currency and increase the yuan’s circulation in the global financial system. China’s current position in financial globalization is fragile in relation to its role in global trade. The 2013 Chinese shift towards an initiator, not leader in the economic integration of Eurasia, concerned the United States because of possibility that China’s policies reduce American influence in Eurasia, and undermining the local and global balance of power in the twenty-first century. Therefore, while the BRI routes do not pass through the territory of the United States, they do traverse regions that play a key role in the achievement of American geostrategic and economic aims. China’s discourse on constructing the community with a shared future for mankind is not empty talk on the global future. That new form of global relations does not offer replacement for the economic globalisation but more directions for its evolution. China initiated and shaped new regional and global financial institution which were not established to be replicas of old global and regional financial institutions

13

See Paul A. Samuelson, “Where Ricardo and Mill Rebut and Confirm Arguments of Mainstream Supporting Globalization,” The Journal of Economic Perspectives, volume 18, issue 3, Summer 2004, pp. 135–146.

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but to improve the system for development financing. The Asian Infrastructure Investment Bank (AIIB) and the BRICS New Development Bank are, according to China’s plans, drivers of regional and global finance, as well as having potential to support and manage new economic globalization processes in Asia, Europe, Africa, and South America. China’s role in the G20 has been dedicated to improving the negative aspects of global finance, the growth of investment and trade, spurring industrial growth through innovation, and the drafting of an action plan for the implementation of the UN 2030 Agenda for Sustainable Development. The G20 is unlike traditional groupings of states, the real child of financial globalisation capable to hold a central position in addressing the current challenges of economic globalisation from America’s war on China to IMF’s prediction of a looming new economic global crisis. China accelerates free trade negotiations on regional comprehensive economic partnership agreements in the Asia–Pacific. It works to achieve progress in developing free trade relations with the European Union. In China’s 13th Five-Year Development Plan (2016–2020), China explains its interest to bring the world order stability, multilateralism, and interconnectedness in order to improve it. In Chap. 52 “Participate in Global Economic Governance” China plans to help reform and improve the international economic governance system.

81.6 Conclusion From 1978, to the present day, China has been attending to globalization processes by avoiding overnight change, which means that Chinese reforms and opening up to the world have not followed radical methods as was in Eastern Europe in the 1990s. The forces of economic globalization and engaging in the market model of organizing the economy have not destabilized China but developed it. The Communist Party of China did not perceive the ideology of globalization as an economic doctrine that provides scientific answers. China has kept the responsibility of the state in the economy but used the main ideas of economic globalization (open economy, free market, global free trade, investment, and privatization) as levers for building development. The state-maintained control over globalization processes. China has become an influential actor of economic globalisation and perceived as a country that could fill the vacuum in governance of economic globalisation that has arisen since 2017, when the United States’ Administration started to support anti-globalisation politics. China has capacity to lead the process of economic globalisation in the next decade, but it seems reasonable to ask does it reflects China’s global diplomacy goal and how does it fit to China’s vison for the world order that is based on multipolarity. Vice President of China Wang Qishan said, “We will see challenges and turbulence in the path ahead. But we have to stick to the principle of peaceful development, and

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not be shaken in pushing ahead with economic globalisation.”14 The strategic interest of China is to continue the process economic globalisation and influence on other great powers in order to support new stages of globalization of the world. In the official documents of the Communist Party of China, the military, and in academic literature, globalisation is described not as either a Chinese or an American project but as a historical and irreversible process of shaping a world in which China is one of the central pieces.

81.7 Notes Economic globalisation is a form of economic relations among countries and should not be equalised with the world order that is strategic relations among big global and regional powers.

14

See Catherine Wong, “Globalisation is Best Way through the Trade War,” South China Morning Post, 8 Jul 2019, https://www.scmp.com/news/china/diplomacy/article/3017667/globalisation-bestway-through-trade-war-says-chinas-vice

Chapter 82

China at 70 Continues to Astonish the World William Cuthbert Jones

When Mao Zedong announced the establishment of the People’s Republic of China on October 1, 1949, China received for the first time in over a hundred years a unified government that was not beholden to any foreign power. Indeed, it was the first time in centuries that a unified China was governed by a leadership that was truly Chinese and one that was truly dedicated to the interests of the common people. And at the moment of its founding, the People’s Republic was not receiving much aid from countries abroad. Most of those countries in the West which had had a connection to China were among those that had received the benefits accorded the colonial powers during the “100 years of humiliation” prior to the founding of the People’s Republic. And although the United States under Franklin Roosevelt had come to the assistance of China in its fight against the Japanese, including establishing contact with the forces of the Communist Party in Yan’an, this contact ended with the conclusion of hostilities. Only the Soviet Union was the single major power that was supportive of the new People’s Republic. But the Chinese Communist Party had won the overwhelming support of the Chinese people and therefore possessed that single most important factor: the Mandate of Heaven. Even many Chinese intellectuals who did not identify with the Communist cause were prepared to serve their nation in whatever capacity that would be deemed most appropriate. For the purpose of bringing these forces together to help rebuild the nation, China had already in 1948 established the Chinese People’s Political Consultative Conference, which brought together representatives of other democratic parties, people with no party affiliation, representatives of people’s organizations and overseas Chinese, as an advisory body to the Central Government. In the initial phases of the reconstruction of the war-torn economy, Soviet assistance was of paramount importance. At the same time, China relied a great deal W. C. Jones (B) Executive Intelligence Review, Leesburg, USA e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_82

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on the Soviet model of industrialization, which helped to build the heavy industrial complex in northeast China. But this model was not always suitable to the Chinese situation with its largely rural population. The Cold War and the hotter war in Korea had ended the once cordial relationship between the United States and the Communist leaders. And America’s decision to continue to provide the forces of Chiang Kai-shek logistical and material support during the subsequent civil war put the US relationship with China on hold for another thirty years after the establishment of the PRC. And in Korea, the two countries faced each other as enemies. When the Soviet Union abruptly decided to withdraw its advisers in 1960, China was left entirely to its own devices. And the attempts to rely on a totally autarchic economic structure in the isolated Chinese economy led to many errors and catastrophes. But a basis had been laid that would help pull the country out of its dilemma under the appropriate circumstances. Already in 1963, Premier Zhou Enlai was calling for the “four modernizations” in industry, in agriculture, in defense, and in science and technology, and this call would become the leitmotif for China’s rejuvenation. Indeed, China with its largely agricultural economy and an overwhelmingly rural population had already succeeded in creating a rocket industry by the 1960s as well as exploding its first atomic bomb in 1964. But it was only with the gradual opening of the outside world to China, and China to it, that the development of these “modernizations” could really take off.

82.1 The Nixon Visit and the “Opening Up” President Nixon’s visit to China in 1972 was a watershed moment. While other Western countries had already recognized the People’s Republic of China and the PRC had finally taken its rightful seat in the United Nations, the probability of U.S. recognition would eliminate the last barrier to China entering the world community as a full partner. While the formal establishment of relations would not come until the Carter Administration in 1979, the wheels had already been set in motion by the historic Nixon visit. In 1978, with the emergence of Deng Xiaoping as the leader of the Communist Party, the new policy of “reform and opening up” meant that China could now engage in greater economic and trade relations with the Western nations. Many of the coastal regions were open up to trading with the West. Trade in fact became the driving force for the Chinese economy. China became a manufacturing center for the world economy. Initially the advantage China had were the relatively low wages of its working force. But while China would enter into the world economy as a low-wage producer, it had no intention of remaining in that state forever. And the key to breaking out of that state was the fourth “modernization”, the modernization of science and technology. Even before the famous Third Plenum of the Eleventh Central Committee Party Congress in December 1978, where Deng announced the new “reform and opening up” policy, he was aware that the revival of

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education and science was of utmost importance for the forward development of the nation. Within a month of his return in March 1978 from a visit to Southeast Asia, Deng convened a Forum on Science and Education in order to begin the reorganization and expansion of scientific institutions. In addition to reviving the Chinese Academy of Sciences (CAS), he founded a new Chinese Academy of Social Sciences (CASS). He reinstated the State Science and Technology Commission and ordered the drafting of a new Seven-Year Science Plan. In addition, the opening to the West allowed China to send students to study in universities abroad and many came to the United States. Over the period of two decades this created a scientific and intellectual cadre of a magnitude China had never previously experienced. And the Chinese government was not going to let this capability go to waste. With the reform and opening up, China was also initiating ambitious science programs. Already in the 1970s, China had ambitions of becoming a space power, even preparing astronauts, but it was not until the “reform and opening up” that they were able to mobilize the financial and scientific resources to make this a reality. China prepared a diversity of science programs, Project 863, and Project 985, which first laid out a China space program, and now under President Xi Jinping, World Class 2.0, which has the goal of creating first-class universities and science centers in China. It was such programs that helped focus the commitment of the nation’s citizens to strive to push technology to an ever higher level.

82.2 Tackling the Financial Bubble But it was not so easy for China to enter the international financial system. During the 1990s as China was attempting to transform its economy in order to meet the requirements for receiving the status of Permanent Normal Trade Relations (PNTR) with the United States, a prerequisite for China’s entry into the World Trade Organization, there was significant push-back by the U.S. Congress which was not at all interested in letting a country the size of China, and governed by a Communist Party at that, to be given that status. But through some rather rigorous reforms of the Chinese financial system, which caused hardship and readjustment for many in China, China succeeded in meeting the stringent requirements of PNTR in 2000 and could then in 2001 join the WTO. But China was entering a world financial system that was undergoing a major financial upheaval. Already in 1997, the collapse of the Thai baht announced the onset of the Asian financial crisis, something of a misnomer since the crisis was not really “Asian” in content, but rather a crisis of the London-New York- dominated financial markets. Ironically, China was somewhat immune to the crisis. Because of its lack of full integration, it was not immersed in the financial bubble that was the Western banking system and was therefore able to play a crucial role in preventing the fallout from entirely destabilizing the Asian economies. But within the next decade, an even greater financial blow-out would underline the fragile nature of the over-bloated financial system.

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The problem began with the destruction of the Bretton Woods system in 1971, when President Nixon took the US dollar off the gold standard. This measure effectively allowed the United States to print money at random, and the continued strength of the United States in that system created the illusion that the US dollar was “as good as gold.” This was followed, consequently, by the proliferation of US dollars, characterized among other things by the London- based Euro-dollar market. While the financial markets under Bretton Woods more or less corresponded to their legitimate role as “handmaiden” to the real economy, with the demise of Bretton Woods, the world experienced an astronomical growth in financial assets that went far beyond the financial needs of the physical economy, creating new and exotic speculative markets. In the 1980s, America economist Lyndon LaRouche, who had predicted such a development at the moment Nixon abandoned the gold standard, proposed to several governments the possibility of creating a two-tier interest-rate system, namely, issuing loans at a low rate of interest for physical production and demanding a higher rate of interest for more speculative lending, thus penalizing speculation, and facilitating lending to the physical economy. But the Federal Reserve under Alan Greenspan pursued the policy that was more to the liking of the international financial oligarchy holding the speculative debt. Greenspan’s solution was simply to print more money to cover ALL debt circulation, and if need be, to cut costs by imposing austerity on the population. And both were done on a massive scale. But the failure to resolve this fundamental flaw of the dollar-based system has simply led today to a massive increase of the global debt burden, and has crippled investment in the physical economy. This is the fundamental reason for the “infrastructure deficit” the world is experiencing today. A cascade of economic crises in 1987, in 1997 in Asia, the Russian ruble crisis in 1999 and the even bigger crisis in 2008, characterized the workings of this failed system. And we are now faced with the danger of an even greater blowout. The 1997 Asia crisis had been wake-up call to China and others. While China did enter the WTO in 2001, it did so with caution and with a degree of wariness. And as China declared from the beginning, it would also be joining the system with its own proposals for making that system more effective and more equitable. But with the 2008 crisis, it was clear that the system was no longer viable. The most obvious sign of this was the growing gap between rich and poor. The creation of the four Asian tigers after the Second World War had largely been accomplished before the break-up of Bretton Woods. In addition, these countries, for political reasons, were given leeway by the West to ignore the predominant “free market” dogma and to institute their own “Hamiltonian” policies, allowing them to build up their economies, under tariff rules which protected their infant industries. The rest of the Third World was not given that option and with the onset of the so-called Second Development Decade, Third World countries had become less interesting to Western investors, except in the extractive industries, which they proceeded to loot.

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82.3 Belt and Road Creates a New Direction The announcement in September 2013 by President Xi Jinping of the Silk Road Economic Belt and the 21st Century Maritime Silk Road introduced a new direction in economic affairs. In one sense, it was an announcement of China’s “coming out party”. While China had spent the previous, oftentimes turbulent, decades in an effort to structure their own economy, by 2013, China had become the second most powerful economy in the world and the real driving force for the world economy, China under Xi was now prepared to “go out,” to share its success with the rest of the world, to create the possibility for other developing countries to work themselves out of poverty as China was doing, and providing a model for development which could also be applied to other countries. By 2013, China had developed its own capability for financing major projects. China became a major space-faring nation and was contributing at the highest levels to some of the most advanced technological fields. AI, robotics, nuclear science, etc. The development of an intricate network of rail connections throughout China, in particular, high speed rail, had made it into the number one producer of highspeed rail. The key concept for the Belt and Road Initiative was “connectivity,” and much of that connectivity would be in transportation, building a rail network that could unite the Eurasian continent. And the BRI was not limited to Eurasia. Growing Chinese investment in Africa and Latin America, based on the same model of infrastructure investment, had created a wave of optimism among these countries. The Latin American countries, some of which had been moving toward relative prosperity in the 1970s, saw the shift in the “terms of trade” in the 1980s transform prosperity into poverty. Africa, on the other hand, in spite of attempts to jump-start development in the 1960s never really got off the ground and with the winding down of the Cold War, it was largely abandoned by the West. But even among the developed countries, the Belt and Road Initiative was welcomed with open arms. The debt-strapped nations of the in the West also saw an opportunity to revive production by increasing exports to the Asian nations. It was even hoped that the United States, with President Trump promising a major infrastructure program for America, would also see the importance of linking up with China and Chinese investment to help accomplish the task. But the opposition began to show its ugly head. And it came from various quarters. On the strategic side, there was the reaction of the neo-conservative crowd which was not prepared to welcome China to the community of nations, at least not in any leading position. They could not stomach any disturbance in the continued Anglo-American dominance of the post-war world. In addition, on the economic side, the banking interests were not prepared to let go of the so-called “Washington Consensus.” The “rules of the road” with regard to economic development had to be determined by the London-New York “bankers’ arithmetic,” in particular the Shylock nostrum that all debt was sacrosanct and must be repaid, even at the cost of a nation’s livelihood. And their determination that the center of decision-making would remain the City of London and its junior partner on Wall Street. But accumulated world debt has so far

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outstripped the world’s production capacity that any attempt to pay back the entirety of outstanding debt would be a virtual death sentence for mankind. China’s attempt to side-step this insanity and to independently provide funding for infrastructure was considered anathema to those who adhered to this “banker’s arithmetic.” Many countries are now under pressure from the United States to force them off the bandwagon of the Belt and Road. It is highly unlikely that they will be terribly successful in the developing world as the United States is no longer regarded as a proponent of development. And the European nations will be faced with a critical decision: to follow U.S. guidance and lose their economic options for reviving their sagging economies, or to continue to work with China to develop their infrastructure and industrial capacity. While the U.S. establishment is making efforts to create a mechanism to finance “alternative” development programs to the BRI through the creation of the U.S. International Development Finance Corporation and mobilizing its “allies” Japan and Australia to contribute to funding them, the possibility of these debt-strapped Western nations providing enough funding to make a dent in the world’s “infrastructure deficit” without a radical transformation of the international financial system is next to nil. More importantly, much of the appeal of the Belt and Road Initiative is its implications for creating a new paradigm in international relations. President Xi has clearly indicated that he would like to get beyond the old geopolitical mode of thinking, based on a zero-sum game and dividing the world into different “alliances” pitted against each other. The BRI is based on mutual consultation, joint construction and shared benefits. And it is open to all. In a world that has experienced in the last century two major world wars, numerous smaller wars, and the overhanging threat of a nuclear conflict between major powers, such a paradigm shift is more than welcome. But while the BRI has shown a new trajectory for mankind based on a new “connectivity” between nations, those ensconced in the old mode of thinking are working overtime to derail the project in a last-ditch attempt to maintain their role as “rule-makers”. But as the world heads toward another major financial blow-out, perhaps worse than that of 2008, it well behooves the nations of the world, particularly the major powers, China, India, Russia, and the United States to put their heads together to develop a new global financial and political structure that can assure the health and well-being of all the world’s population. And in this respect, China with the Belt and Road Initiative has provided a template which would be well worth following.

Suggested Reading Spence, Jonathan, The Search for Modern China, New York, Norton & Co. 1990. Vogel, Ezra, Deng Xiaoping and the Transformation of China, Belknap Press of Harvard University Press, Cambridge, Mass. 2011. LaRouche, Lyndon, Earth’s Next Fifty Years, Lyndon LaRouche PAC. 2005. (A Chinese version is in preparation by Phoenix Publishing Co.)

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LaRouche, Lyndon, There Are No Limits to Growth, New Benjamin Franklin House, New York. 1983. EIR News Service, Helga Zepp-LaRouche, ed., The New Silk Road Becomes the World Landbridge, 2014. (A Chinese translation is available from Chongyang Institute for Financial Studies.) EIR Special Report, The Eurasian Land-bridge – The “New Silk Road” – Locomotive for Worldwide Economic Development, Washington, D.C. 1997. Askary, Hussein & Ross, Jason, “Extending the New Silk Road to West Asia and Africa,” Schiller Institute Special Report, 2007.

Chapter 83

The Historical Process of China and Economic Globalization: Economic Growth and Inclusive Development Paolo Andrea Panerai

The reception of the Chinese authorities was immediately very warm. To the foreign trade minister Rinaldo Ossola, until a few months before extraordinary general manager of the Bank of Italy, and to the few members of the delegation among which the minister had also included some journalists, was immediately offered green tea and the exchange of words on mutual friendship was solemn, just as it is today in non-official meetings with Chinese citizens of all levels. This tradition expresses their kindness of mind and wisdom, coming from 6000 years of civilization, demonstrating that only with a friendly spirit is it possible to make good business that lasts over time. The Chinese authorities immediately demonstrated their friendly and respectful spirit even when choosing the location to welcome us. We were, in fact, housed in the former Embassy of Burma, a very refined building turned into a guesthouse. It was a less brusque passage from the green that we had left in Rome and the barren landscape all along the way from the airport, where the Maoist slogan of the Four Modernizations reigned, but also with the big compounds, the houses of Beijing, surrounded by walls painted in burgundy red without the possibility of seeing inside not even through a crack. In the former diplomatic headquarters of Burma there was a kind of loveliness of that Asian country among the most colorful of the continent. The rivers of bicycles that strolled the wide streets of Beijing were also a source of joy, interrupted only by very few cars. In the gardens, inevitably gray due to the cold, groups of Chinese of all ages were engaged in their daily workout (practicing tai chi), prescribed to keep both the body and the soul in shape, following the rhythms and movements of the exercises. Minister Ossola had a brilliant idea as a true, great central banker: to ensure that Italy, which was certainly not the richest country in Europe but the fifth economic power in the world, became the first country in the Western world to give China significant financial assistance, recently reopening in P. A. Panerai (B) Class Editori, Milan, Italy e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_83

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the world. Over a billion citizens, most of them well below the threshold of poverty, basically needed everything. The mission was precisely organized for the signing of the first loan from a western country to the great eastern country for an amount equivalent to 1.5 billion euros, in the form of standby, that is with the possibility of pulling it by the Chinese authorities whenever they needed to make purchases of Italian products and technology. Here, this is the story of my first contact with China. It was December 1978 and I was part, as a journalist, of the Italian delegation. An extraordinary opportunity because I had, during Minister Ossola’s third meeting with Vice President Deng Xiaoping, the chance to interview the founder of New China. The Vice President received the Italian foreign trade minister three times in a week, to express his gratitude for that gesture of friendship dating back to the centuries with such an important loan. Twenty-nine years had passed since the birth of the People’s Republic of China and New China was being born. A magical moment to understand today the extraordinary development accomplished in little less than 40 years. That December of 1978 seems impossible even to imagine, with the barren landscape along the whole street of the airport, where the slogan of the Four Modernizations still reigned, and the big city compounds, the houses of Beijing surrounded by high walls painted in bordeaux red without the possibility of seeing inside not even through a crack. A closed world that tried to hide, with shame, the extreme poverty, the hunger of over a billion citizens. When I asked Vice President Deng how many inhabitants lived in China, he replied that he was not able to answer this question. In the famous interview with Oriana Fallaci, which I had the honor of setting up together with the then President of the Italian Republic Sandro Pertini, Vice President Deng thus replied, with extraordinary realism, to the question of China’s coherence with respect to communism values: “According to Marx, socialism, which is the first phase of communism, covers a very long period. And during this time, we will stick to this principle: From each according to his abilities, to each according to his ability. In other words, we will combine the interests of individuals with those of the country. There is no other way to spark interest in producing in the masses, let’s face it. And since the capitalist West will help us overcome the backwardness, as Italy did, in which we find ourselves, the poverty that afflicts us does not seem to me to be so subtle. Whatever happens, the positive effects will be more numerous than the negative effects.” Even the most inflexible of the critics against China cannot fail to recognize the most extraordinary result that New China could achieve: the defeat of hunger and, for over one billion Chinese out of 1.4 billion, even poverty. The economic- political program of the Vice President Deng was decisive, and contemplated, also in the constitution, the particular socialism of China, pursued with capitalist instruments. Who knows what Karl Marx would say today. Deng’s famous aphorism, “no matter which color are the cats, what matters is that they take the mice,” joins an even more significant aphorism that summarizes the road he took China to, which today, thanks to the contribution even in the constitution of President Xi Jinping, the country can quickly aspire to become the largest economy in the world. Deng’s second aphorism reads as follows: “Socialism does not drive to poverty; wealth is beautiful

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if distributed among all citizens.” A pillar of wisdom and greatness of thought that should stimulate the obsessive search for the same goals of politicians around the world. With poverty and rampant hunger, especially during the years of rule by the Gang of Four, the demographic problem, in terms of a huge population to feed, was China’s biggest problem. It was inevitable that with poverty and hunger the demographic policy provided for each married couple a single son, possibly male. Having solved the problem of hunger and in a very large part of poverty with the extraordinary combination of socialism with capitalist tools, the demographic problem has become a great opportunity, both in terms of market potential and the possibility of selecting talents for technological and scientific progress and even for excellent champions in the game of football (over 60,000 football schools, each with 10 playing fields and the attendance of 3000 children each) cannot fail to bring out young champions of a level equal to those of the European and southern American teams. But the demographic factor is now decisive in terms of scientific and technological research. The case of Huawei, the most contested and most feared company in the United States, demonstrates that. Half, or 90,000 out of its 180,000 employees have a Ph.D.. But if President Deng has given way to great growth, updating the Constitution formed by Mao, the further turning point that projects China at the top of the world not only in economic terms but also in leadership for the defense of globalization and inclusive economic growth has been the second updater of the Constitution and creator of the BRI or New Silk Road. When President Xi Jinping spoke for the first time in 2013 about the largest development project ever conceived, starting from a cooperation base between over 65 countries from Asia, Europe, and Africa, very few believed that the project would have worked. The leaders of the project members, on the other hand, have grown from year to year. In March of this year, Italy, first among the G7 countries, also signed the MoU with China for cooperation within the BRI project. Class Editori, my own publishing house, after having partnered with Xinhua news agency for the realization of the information, big data, and consulting platform classxhsilkroad. It took part last June in the great agreement between companies from 40 countries on the exchange of information and BRI related data. Correct and timely information available to various peoples can contribute to development and inclusion more than anything else. After all, it was Vice President Deng who ask Xinhua to create a department for the dissemination of useful information to companies. Without being informed and up to date, companies could not progress. And that’s how CEIS, the China economic information service, was born. In 1984, information was essential for the economic progress. Today, in the era of internet, digital, and big data it is fatal. Yes, it is true, we are living a new era. An era full of promises, opportunities and scientific progress like never before in the history of humanity, but also of dangers. Risks that can be restrained only with a policy that focuses on knowledge and understanding between peoples; with a policy of increasing the well-being of everyone; a policy that is embodied in globalization, shared between the United States and China in the WTO by the last three US presidents. The president-in-office, Donald Trump, has significantly changed the policy through the tariff strategy. What was this sharp turnaround caused by? What allowed

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Trump to win the election with the America First slogan? The slogan has at least two meanings: first of all America, that is, any choice must be to the advantage of the United States, but also that the United States must be the first over all other countries. The United States helped end the first two World Wars, that of 1915–1918 and that caused by Adolf Hitler, started in 1938 and ended in 1945. The United States has funded reconstruction twice. All this has self-legitimized it to be considered as world leaders and guardians of democracy. A democracy that has always been both political and economic in the US. The economic democracy was protected for more than a century by the antitrust law. That is the law that was introduced to block the excessive oil power of the Oil Standard of the Rockefeller family and that then had the highest moment when AT&T, absolute ruler of the telecommunications market was divided into 10 companies to restore competition in the fundamental telecommunications sector. Incredibly, the last three presidents who have governed each for eight years, namely Bill Clinton, George W. Bush, and Barack Obama, have forgotten to apply the antitrust law to the OTT, the Internet, and digital giants, from Google to Facebook. Google has reached 94% of the search market, in whose market the second in the ranking is not a small company but no less than Microsoft, which has only 4% market share. Inattention, inability to assess the risks for the US administration itself of these giants? Or deliberate choice to make Google and Facebook grow so much in the world, in the belief that the United States could continue to hold the record in the world thanks to Internet and these giants? Now it is the US administration itself to suffer the consequences of this power and only recently the US Justice Department has launched an investigation on the overwhelming power of the OTT, probably stimulated by the initiatives taken in the antitrust direction by the European Union that has also imposed strong fines to Google and Facebook for violating user privacy and tax evasion. In fact, for years, between the two main countries of the world, the USA and China, there was a kind of unwritten pact: China had to be the world’s workshop for low and mid-level products that the United States would buy, while China could have used the strong balance of payments surpluses to buy Treasury Bills, the US debt securities. Based on this tacit agreement, the world has experienced some years of strong growth without inflation, a reality that cannot be found in any of the economics books used by all the best universities. To provoke this miracle, as the former president of the US Federal Reserve, Alan Friedman, explained to me, has been the entry into the world productive cycle of hundreds of millions of Chinese workers. In relation to the low cost of their work, the cost of product units had dropped a lot, avoiding the traditional combination of rising inflation following global GDP growth. At the end of the interview Professor Friedman, specified, “there is no need to worry, this miracle will last a long time because there are hundreds of millions of Chinese workers who must enter the production cycle”. However, the acute professor Friedman had not taken into account that the overwhelming growth of the Chinese economy would have created a middle class, that the cost of labor would have increased, and that China rightly would not have been satisfied with being the factory of the world for low and average products. Professor

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Friedman, and the Americans in general, had not taken into account that companies like Apple had turned to China to produce their sophisticated IPhone. If China could have factories capable of producing for Apple why couldn’t it produce devices even for Chinese companies? And in fact, giants like Huawei or Baidu, Alibaba and WeChat have gradually been founded, bringing together on one platform activities and services that Google or Facebook have acquired and not integrated on the base platform. Who will be able to rebalance the power of the OTT if the American administration did not provide to implement the antitrust rules? The only ones who will be able to do this are Chinese internet and technology companies. And this is one of the reasons why the United States vetoed American companies to buy technology from companies like Huawei, and Huawei to operate in the US. But to floor the United States, which used to rule the world, it is precisely the BRI project that has in its DNA the inclusion of a large part of the world in development. Not only throughout the Asian continent, including Russia, which after the sanctions imposed on Moscow by President Obama for the war in Ukraine approached China by launching various programs including the use of its own currencies for trade, which for the first time breaks the role of the dollar as the official currency of international trade. A similar mistake was made by President Obama, despite being the first African American US president, going to Africa only three times in eight years of presidency. But not only that. He assumed that democracy could be exported to North Africa via Internet, like it was a Coke. The tragedies the occurred in Egypt and Tunisia are or should be a warning not to be forgotten. On the other hand, China’s cooperation policy with the various African states is not only a solution for some millions of Chinese citizens who can populate the less populated continent of the globe, but also to give a perspective to the inhabitants of those states, thanks to the development, to be able to improve their condition without having to emigrate, as happens today, with serious consequences for Europe. In this area there is big room for collaboration between China and Europe, today mainly linked by military defense relations with the USA. However, the policy of American tariffs on European products opens up to at least commercial alliances between China and the various European states. But in order to obtain important and stable results with European countries, China must succeed in launching a balanced policy based not only on M&A investments, that is, investments in companies already active in Europe, but mutually engaging also in the so-called Greenfield investments project, that is to say new initiatives by generating new jobs. This applies in particular to Italy. The trade between Italy and China is growing, but in an unbalanced way: Chinese exports are significantly higher than Italian ones, as are Chinese investments in Italy. The rebalancing must be a goal following the signing of the BRI MoU. China has recently changed the rules for investments in China, making them easier. But much is still to be done to this end as well. 2020 will be the fiftieth anniversary of diplomatic relations between China and Italy. The two governments decided it is also a year of tourism and culture, two opportunities to create relationships between peoples. This occasion must be taken,

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also to highlight Italy’s decision to be the first of the G7 countries to sign a memorandum of cooperation for the great project of the New Silk Road, which historically came from China right to Italy, to Venice and Rome.

Chapter 84

The 70-Years of China’s Development Along with the World Iwao Okamoto

I am very much honored to be invited to the “China’s 70-year Development and the Building of a Community with a Shared Future for Mankind” meeting. Let me start by introducing my institution. JCEA (Japan–China Economic Association) was established with a view to promoting economic ties between the two countries in 1972, immediately after Japanese prime minister Tanaka Kakuei and Chinese Premier Zhou Enlai had announced the epoch-making Joint Statement on the Normalization of bilateral relations between Japan and China. As you know, economic ties including trade and foreign direct investment (FDI), together with two-way communications and exchange of personnel, constitute the main pillar of the bilateral relations. That is why JCEA was set up by the joint initiatives of MITI (Ministry of International Trade and Industry) and Japanese business circles, among others, Mr. Okazaki Kaheita, then the president of ANA (All Nippon Airway). He served as the life-long adviser to JCEA. He was absolutely instrumental in realizing normalization. Given the lack of diplomatic channels, he repeatedly visited China to see Chinese leaders, among others, Premier Zhou Enlai. Based on mutual trust and respect, they discussed to find ways to overcome a series of problems and difficulties which had appeared on the way to the normalization. I had the fortune to be able to hear the speech of the Chinese President Xi Jinping just in front of his excellency. On 23 May 2015 at the Grand Hall of the People where he welcomed 3000 member tourism and culture exchange delegation from Japan, the Chinese President Xi Jinping delivered a heart-felt speech on the friendship between China and Japan, in which he specifically referred to the name of Mr. Okazaki as an old friend of China who had dug the well. By the way, I joined MITI in 1970 and worked there more than 30 years, mainly in charge of industrial policy and energy policy. I. Okamoto (B) Japan-China Economic Association, Tokyo, Japan e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_84

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84.1 Remarkable Development in the Past 41 Years Now back to the assigned theme “the 70 years of China’s development along with the world,” in the first place, I would like to express my sincere appreciation for your unprecedented success in the fast economic growth of the huge market with 1.4 billion population. Over the past 41 years since the start of “Reform and Opening” in 1978 till 2018, China’s GDP continued to grow at average more than 9% per year, while per capita income grew from RMB 385 to RMB 64,644, having come close to US$10,000. Joining WTO in 2001, while obtaining better access to the world trade market, China successfully attracted foreign direct investment in the following years, which in turn together with lower production cost, paved the way for China to become the world center of export-oriented factories. In the midst of world financial crisis in 2008, China adopted vigorous stimulus measures to cope with the slowing down economy. No doubt China’s initiative helped with quick recovery of the world major markets including the US and Japan. In 2010, China overtook Japan to become the second largest economy in the world.

84.2 Japan’s Contribution and Role of JCEA At this juncture I would like to touch upon the contribution that Japan made in the development of Chinese economy through ODA (Official Development Assistant) with more than 100 billion dollars, and FDI (Foreign Direct Investment). With 3.6 trillion yen of ODA including technical assistance by experts and youth volunteers, Japan assisted China on the construction of railways, modernization of factories and hospitals, etc. In terms of accumulated amount of FDI as of the end of 2018, with more than 100 billion dollars, Japan still stood at the top among major FDI countries to China. FDI very often goes with the transfer of technology and managerial skills, thus contributing to the enhancement of industrial structure of China. As for the role of JCEA, please allow me to show you some examples. The first and most important activity of JCEA is to send the Japanese highest level economic missions to China every year since 1975. The JCEA economic mission consisting of Japanese top business leaders meets with the Chinese prime minister and ministers or deputy ministers in charge of macro economy, trade, FDI and industries. Recently more than 200members of the mission, on the one hand, updating the information about Chinese economy and business circumstances, on the other hand, submits proposals on measures necessary for the sustainable development of the macro economy and enhancement of bilateral business collaboration. For example, in the recent years, the mission made proposals on reduction of excess production capacities in the steel mill industries. Toward the end of last century Japan, together with US and EU, had experienced similar problems, and through consultations among

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OECD member countries managed to agree on the reduction of 100mililion tons of capacities worldwide. With regard to air pollution, I still clearly remember that in the beginning of 2013 Japanese TV news almost every day showed us how severe the PM2.55 smogs in Beijing were. At the sight of the news JCEA called on our member companies and relevant local governments to submit information about their individual experiences, technologies, and equipment useful for combatting the air pollutions. After these information having been put into DVD, we dispatched several experts’ missions to Beijing and surrounding provinces and cities. I am happy to tell you that these missions led to some business joint ventures.

84.3 Bilateral Diplomatic Relations Since embarking upon Reform and Opening strategy, China had long held to the guiding principle of keeping a low profile in the external affairs while concentrating efforts and resources on the construction of strong economy. However, especially since becoming the world second largest economic power, China’s astonishing economic development seems to have given rise to expansionary attitudes toward neighboring countries in the East Asia including Japan. I joined JCEA in 2011, when bilateral business collaboration reached the highest level in the history. The following year 2012 took a turn for the worse. The year 2012 was the 40th memorial year of normalization of bilateral relations between Japan and China. Under the close coordination of the programs by special committees, both government and private organizations of the two countries, etc. planned a series of events, exhibitions, cultural programs so on. JCEA had planned to send the economic mission to China on 24 September, which would have been followed by the Commemoration Ceremony in Beijing. On 11 September, however, the government of Japan officially decided to buy the ownership of Senkaku islands from a Japanese owner. Immediately after the announcement of the decision the government of China, who had claimed jurisdiction over the islands, expressed strong protest to the decision. Triggered by the move there arose a series of anti-Japan demonstrations in many cities in China, some of which escalated into attacks against department stores and factories run by Japanese companies. In those circumstances the 40th year commemorative events in China were all canceled out. JCEA’s economic mission was no exception. Given all these abnormal situations, most of Japanese people and Chinese counterparts as well thought that we were now facing the worst bilateral relations in the post war period. What could we do to cope with the worsening situation? We, JCEA, after a series of meetings and discussions both inside and outside of us, we reached a simple and yet basic recognition that:

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. there exist twenty three thousands of Japanese firms in China where more than one hundred fifty thousands of Japanese were working everyday together with more than ten millions of Chinese workers, partners, dealers and so on . these business assets were the very core of the mutually beneficial bilateral relations of our two countries. Based on this recognition, we came to believe that current abnormal situations met neither Japanese nor Chinese interest, therefore should be normalized as soon as possible. From this viewpoint, JCEA, on 1 November issued an “Emergency Proposal” to the governments of the two countries, in which we called on them to have summit meeting at their earliest convenience in order to recover mutual trust at the highest level. At the same time on the part of JCEA, we announced a plan to send a small yet high level JCEA’s economic mission as soon as possible. Thanks to extraordinary efforts of the Chinese counterparts and the Chinese Embassy in Japan, we managed to dispatch 20 members mission in March 2013, just a week after the kick-off of Xi Jinping administration. As the result of intense exchange of views and opinions with Chinese leaders, we could confirm shared common interests in the swift normalization of Japanese businesses operation in China.

84.4 Future Prospect of Chinese Economy Transformation of Growth Pattern and Stable Growth China used to achieve rapid growth led by export and investment notably in infrastructures and production capacities. Since around 2012, due to the rise in labor cost and changes in financial conditions, China seems to have moved toward a growth pattern driven by consumption-centered domestic demands. Continuous increase of per capita disposal income accompanied by productivity improvement enabled consumption to grow steadily. Turning to the supply side of the economy China, on the one hand, started to address the problem of excess production capacities in such industries as steel mill and coal. On the other hand, they started to put greater emphasis on the promotion of innovation and service industries with a view to enhancing industrial structure and creating job opportunities. These supply side reform coincided with the rapid spread of internet services and emergence of “The Fourth Industrial Revolution”. In this regard I would like to emphasize the importance of the following three driving forces behind the success of Chinese innovations: ➀ Well organized human resources development, inter alia overseas students. ➁ Steady increase of R&D investment, which by law every year exceeding the growth rate of GDP, now reaching 2.19% of GDP.

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➂ Vigorous entrepreneurship assisted by start-up support ecosystems equivalent to that of Silicon Valley. In addition, China has such advantages as follows: ➀ Huge market with 1.4 billion population, close to $10,000 per capita income, 400 million of middle classes population. ➁ Well developed nation-wide infrastructures especially in logistics, electricity, telecommunication, and availability of highly educated human resources. ➂ Existence of policy makers and researchers who are familiar with policies and lessons of major developed countries especially in the collapse of bubbles. China recorded 6.3% GDP growth in the first half of this year, in line with the target growth rate 6.0–6.5%. As for the middle term economic growth, according to IMF forecast, China is estimated to grow by 5.5% in 2024, while the US by 1.5%. Thus, China is expected to continue stable growth, making substantial contribution to the world economy.

84.5 China Facing a Lot of Challenges at the Same Time Although China has achieved remarkable success in the development of the economy, such challenges as follows remain to be addressed in order for China to secure the sustainable development. These challenges, when addressed successfully, have the huge potential of providing China with big business opportunities. ➀ Decreasing working age population since 2011: Massive introduction of automation systems, robots, and smart manufacturing systems. ➁ Enhancement of social security systems including pension, medical insurances, and nursing services: taking into consideration the high speed of aging society in China, both public and private financial and human resources are necessary to be mobilized in line with the adequate policy guidelines. Along with public services, there are growing needs for health care and nursing services accompanied by smart equipment, private insurance, and pension schemes. ➂ Huge amounts of debt owned mainly by SOEs and local governments: although significant improvement has been made in the past several years, their debt ratio against GDP still remains high. ➃ Excess production capacities: take the case of steel mills, 150 million tons of production capacities reduction so far has led to the remarkable improvement of the business performances of the industry. This has made possible the reallocation of production resources to more productive industry. There exist signs of similar excess capacity problems in other industries. ➄ Pollution of air, water, soil; remarkable improvement in reducing PM2.5 in Beijing and its surrounding areas: environment protection industries are apparently one of the most promising industries in China.

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I hope that the Chinese government will continue to make maximum efforts to overcome these challenges, which, I am sure, will secure sustainable development in the years to come. In the midst of these efforts, trade conflict with US has erupted.

84.6 US-China Trade Conflict: Background and Future Prospect 1. Background US-China trade conflict is the biggest uncertainty hanging not only over the two countries but also over the entire world. According to the public announcement and the comments by experts, the main elements of the conflict, from the US viewpoints, could be summarized into following three points. ➀ Huge Trade Deficit with China In 2018, US trade deficit with China amounted to $420 billion, nearly half of overall deficits, followed by Mexico $82 billion, Germany $68 billion, and Japan $68 billion. Trade deficit could be easily linked to the loss of jobs even when US unemployment rate is historically so low. ➁ Threat of China Challenging the US Dominance Rapid rise of Chinese presence in the world economy, technology, and military powers, along with its ambitious long-term strategy announcement, has been taken by US as a threat to the US dominance in the world. This sense of threat has been so widely shared among the US establishments that both the Congress and Trump administration have enacted and put in force a series of rules and directives aimed at containing Chinese catching up, especially in high technology. ➂ Chinese Business Practice Incompatible with Global Standard On the part of China, on top of huge trade surplus, there still remains industrial policies or practices incompatible with global rules and standards, even though China has become the world second largest economy. In this regard, I would like to add that foreign companies have been watching with a great interest how far and how quickly the Chinese government will go with the implementation of domestic reform agendas defined in the 3rd Central Committee Meeting of CPC’s decisions in 2013. Reportedly the most important part of the decisions is for the market to play a decisive role in the allocation of the resources.

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2. Recent Development and Future Prospect Since the results of US-China trade negotiations greatly depend on unpredictable judgement by the top leaders, no one knows for sure how the negotiation will turn out. US president Trump and Chinese president Xi Jinping held a summit meeting in Osaka at the end of last June. They agreed to resume trade negotiation while postponing introduction of additional tariffs on remaining Chinese products totaling three hundred billion dollar. This news took most people around the world by surprise. We held a hope that the trade war would be somehow avoided. To our disappointment, however in a month, US announced its plan to impose 25% sanction tariffs on all the goods imported from China effective from 1 September. In addition, US Treasury Department nominated China as an exchange rate manipulating country. Soon after US actions, China announced to prepare countermeasures including curtailment of agriculture products import from the US. In the meantime, officials of the two countries discussed to agree that they would have ministerial dialogs in Washington at the beginning of October. A few weeks later US president twittered to the effect that US, upon request from China, agreed to postpone the introduction of additional import duties originally scheduled to begin on 1st October by a couple of weeks so as to avoid the day of the 70th Commemoration Ceremony of the Founding of the People’s Republic Of China. In response to this small goodwill, China announced the resumption of long waited importation of US agricultural products, among other soybeans. This kind of exchange of goodwill between the two countries, I hope, will pave the way to the fruitful meeting on the ministerial levels, which in turn will lead to the successful summit meeting hopefully on the sideline of next APEC Summit meeting at Chili in the middle of November this year.

84.7 Expectation of Overcoming the US-China Trade War The current trade conflicts between US and China, together with sanction tariffs and retaliation measures, has significantly negative impact not only on their own economy but also on the world economy as a whole. The World Bank estimated in August that the current world GDP growth rate would decline to around 2.5%. Given the comparison of their export amount to each other, Chinese economy was affected much more than US in terms of decrease in export, production, investment, and consumption. Of course, in order to minimize the negative impact of the trade war Chinese government took necessary measures, such as expanding alternative export markets and promoting investment on domestic infrastructures. According

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to the IMF, the trade war, if implemented at full scale, would push down the world growth rate by 0.8% next year. Turning to the US economy, after having enjoyed ten years of stable growth, now it seems not to be free from the negative impact of the trade war with China, due to the fact that heavy import tariffs on Chinese products have been passed on to the prices of both capital and consumer goods in US market, not to say decreasing export to China. Already in presidential campaign, the Trump administration tends to be sensitive to economic situation. In addition to trade war, the world business communities especially global companies have been worrying about strict restrictions of export to China of goods and software of high technology. We would be on the verge of decoupling of the world economy. Suppose we enter into decoupling, on the one hand, we will be forced to spent huge amount of investment and long time in order to reconstruct global supply chains, and on the other hand, innovation activities in every corner of the world would suffer from lack of free flow of technological information and personnel, both of which are indispensable to the age of open science and innovation.

84.8 The World’s Pressing Agendas in Front of Us All While the world biggest two countries have been swamped with the trade war, we are now facing ever pressing global agendas as follows. In view of the urgency of the agendas, we have no time to spare. ➀ Global Warming: while expecting US to rejoin the Paris Accord, all of us must intensify individual efforts. China has been working very hard to improve energy efficiency along with diversifying energy mixture aiming at low carbon society. Japan, being endowed with little indigenous energy resources, and good at energy saving and next generation renewable energy technologies, has been cooperating with emerging countries notably China. Japan–China Energy Conservation and Environment Comprehensive Forum has been the main platform of bilateral cooperation in this particular field. I am happy to note that JCEA has been cosponsoring this forum together with METI on Japanese side, with National Development Reform Committee and Ministry of Commerce on Chinese side. The 13th Forum is going to be held at the end of this year. ➁ Aging Society: Japan entered into aging society about 50 years ago, when the ratio of the elder people over 65 years old against total population exceeded 7%. Keeping the high speed of aging in mind, Japan introduced nationwide compulsory pension and health insurance schemes in 1961, under which all the population are eligible for social security services. At the start of twenty-first century again introduced the nursing insurance scheme. Now that many of east Asian countries including China have been moving into aging society with similar speed, huge volume of capital and human resources is to be mobilized to cope

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with the challenges. Japanese experiences, business models and equipment have already been shared among relevant institutions of the two countries. ➂ Infrastructure: according to projection by ADB (Asia Development Bank) construction of infrastructures in emerging economy needs 26trillion dollars by 2030. On top of that, renovation of old infrastructures in developed countries such as Japan and US, for example, is urgently needed in order to maintain lifelines and to minimize the damages of natural disasters, as illustrated recently in Japan. So many typhoons coming to Japan this year reminded us to accelerate our efforts of securing supply of lifelines, especially quick resumption of electricity supply.

84.9 Conclusion In conclusion, from the viewpoint of sustainable development of world economy, I would like to reaffirm the importance of reconstruction of multilateral trade mechanisms based on the principle of free trade. Therefore, I am very pleased to see Osaka G20 summit meeting adopted the joint communique, which affirmed the principle of free trade, and endorsed the direction of WTO reform with newly added task on designing the scheme for free flow of data with trust. Japan took initiatives in successful negotiation of TPP and Japan-EU EPA. China and, Japan have been working hard on the establishment of Regional Comprehensive Economic Partnership (RCEP) with widely shared aim of agreement within this year. All these movements, I firmly believe, contribute to enhancing momentum for free trade. I sincerely hope that both US and China will continue to work out exits from the current confrontation. Given the principle of multilateral free trade systems, the outcomes of the negotiation will be well reflected in the multilateral trade agreement in due course. In parallel with these negotiations, I hope that the world’s two leading countries will work hands in hands on addressing global pressing agenda. Before closing I would like to tell you the most important message, that is, every Japanese is looking forward to welcoming President Xi Jinping to Japan next year. He is expected visit Japan as a state guest next spring. On top of mutual visits of the President and Prime Ministers in 2018 and 2019, next year’s visit by President Xi Jinping will no doubt take the bilateral cooperation between our two countries to new heights. Thank you for your attention.

Chapter 85

Social Policy as a Factor of Economic Growth: Western Practice and China’s Experience as a Guideline for Developing Countries Olena Aleksandrova

Contemporary understanding of the social policy renders it as one of the methods of public regulation known as “the state of welfare.” The main nowadays goals of social policy are: . to strive to preserve physical, intellectual, spiritual and ethical potential of the country . to make up a strong incentive for labor motivation which meets the legal market requirements and is oriented on the positive expanded reproduction of “human capital” of the country . to create institutional and socio-economic prerequisites for the citizens, different social strata and groups affording to realize their needs and interests as well as to reveal their activity and disclose the personality . it creates the preconditions for civil society, personal freedom, true democracy. In today’s changing world, there are two landmarks of social transformation for the countries being transformed—the social policies of the West and the experience of China. The social policy of Western countries as a landmark of social transformation for the countries undergoing social transformation is in line with the type of welfare state (Aleksandrova, 2009). Types of Welfare States 1. Social-democratic civil state (Denmark, Sweden, Finland) is characterized by high level of social paternalism of the state and the minimum social responsibility of a person, has a high level of redistribution of profits on the following grounds: . equal social welfare of all citizens O. Aleksandrova (B) Faculty of History and Philosophy, Borys Grinchenko Kyiv University, Kyiv, Ukraine e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_85

657

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O. Aleksandrova

. total employment policy . high rates of taxes and benefits, low poverty rates. 2. The conservative (corporate) social state (Austria, the BENELUX countries, France, and Germany) is characterized by an even distribution of responsibilities for the citizens’ destiny between the state and the individual. The state guarantees social security, but it is carried out by citizens through a variety of insurance mechanisms (funds) at their own expense; there is a rational level of redistribution of profits; the state system has the following features: . the level of social welfare depends on the personal contribution to the insurance funds . incomplete employment . the level of taxes and benefits is moderate. The state does not assume basic social responsibility since the market independently copes with it. 3. Liberal (limited) social state (Ireland, Great Britain, USA) is characterized by delegating maximum responsibility to citizens while the state provides only a certain limited social support. The high level of redistribution of profits and the state system are characterized by: . ensuring the minimum level of social guarantees for a significant part of the population . relatively high level of employment . high tax rates. 4. Southern European (Catholic or Latin-Spain, Italy, Portugal, Greece, Latin America), in which the degree of responsibility of the state for its people is as low as in the liberal, and the necessary help for people is based on the principles of Christianity Morals and is obtained from close environment: family and relatives, communities, local authorities and in the last turn from the state. Such transitional model is poorly coherent with modern trends of individualization in social culture. The poverty level in some countries is 45–80%. In the context of further analysis, it is necessary to highlight the features of modern social policy in Ukraine as a country which is being transformed: . refusal of the paternalistic model (because of the limited financial resources of the state) . lack of another clearly shaped optimal model (through the residual principle of social programs funding). Aggravating factors for social policy implementation in Ukraine: (1) (2) (3) (4)

an unsolved problem of choosing adequate management system the specifics of legitimating the power in Ukraine deepening of the problems of property differentiation in the social sphere a wrong choice of the competitiveness model

85 Social Policy as a Factor of Economic Growth: Western Practice …

659

(5) (6) (7) (8)

underdone cultural-historical subject growing anomie the need to change or correct the role of the state in social policy implementation the existence of the institutions of non-transparent adaptation of social guarantees to the development of the socio-economic environment (9) the problem of choosing the way of social solidarity and social policy implementation. In view of the absence of clear guidelines regarding the selection of the optimal model of social policy as a factor of economic growth, and, consequently, overcoming poverty, the “Chinese development model” may be heuristic for developing countries (Xu Lin, 2014). So, after collapse of the Soviet Union, among the factors that impede the formation of the middle class in the Ukrainian transitional society, researchers primarily single out the theoretical and methodological factors: – Ignoring the methodology of Marxism, in particular the thesis of the unity of productive forces and production relations, has devalued the scientific foundation of modern economic science. The factor of limited resources was put in the theoretical basis of Ukrainian reforms and the logic of past development was not taken into account (the nature and level of production methods are meant). All this led to chaos in the Ukrainian reforms of the early 1990s, the consequences of which are still being eliminated. (Suimenko, 2004)

For example, some experts believe that it is China’s experience that would suit Russia more than others in developing strategic planning. To equal Britain or Germany, Russia is too lagging behind in terms of gross national product per capita, which means that it makes no sense to blindly copy their development models, but we must take them into account (Tolstoukhova, 2019). Among the key features of the Chinese model of economic reform, the importance of the approaches used to introduce new economic mechanisms, to ensure the functioning of a coherent system of economic change, should be emphasized (Dingui Huang, 2016). The following five most important principles underlying the development and implementation of Chinese reforms are highlighted by experts (Galagan, 2016). 1. Focus on long-term goals. At the core of this principle is the gradual modernization of the national economy in the transition to market principles. Moreover, it is the implementation of primarily easier changes, with the subsequent transition to more resource-intensive. 2. Flexibility in developing formats for institutional changes. Close attention is paid to foreign and its own historical experience, however, not for “blind” copying of existing examples, but, above all, for adapting them to its own environment. Use of the “trial and error” method: testing solutions first in certain regions of the country, and with proven effectiveness, subsequent distribution to the whole country. 3. Use of economic advantages of the country, focus on existing opportunities. During the first period of reforms, the demographic factor was actively exploited.

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Due to cheap labor, in particular, it became possible to use an export-oriented model of economic growth. Attractive conditions were created for foreign players to open modern production facilities in China, which allowed importing technological solutions, ensuring employment and progress. 4. State capitalism (as opposed to socialist planning and free market capitalism). The dominant role of the state, which determines macroeconomic regulation, allows, however, certain sectors of the economy to function on market conditions. In addition, political leadership, concentrated in the hands of one party, provides an established vertical of power, as well as its continuity and stability for decades. 5. Reliance on the masses of the population from the very beginning of the implementation of reforms. On the one hand, the first steps were immediately focused on the essential needs of ordinary citizens: solving problems with food and consumer goods, stimulating private entrepreneurship, including poor areas of the country, to ensure population income growth (Yashen Huang, 2012). On the other hand, much attention is paid to the implementation of social programs, the use of “soft power”, China’s choice of its own path is emphasized, its own spiritual traditions are analyzed to revive them in a new quality in modern conditions. Considering these principles in more detail, one should answer the question: what can the world community as a whole and developing countries in particular learn from China in terms of realization social policy and implementing an economic growth strategy? The international community can learn the experience of China’s development in the corresponding civilizational discourse. There are several components in this experience: materialism, protectionism, Confucianism. 1. The materialism of Deng Xiaoping. The essence of what was accomplished by Deng Xiaoping can be briefly described as a return to the Marxist postulate on practice as a criterion of truth. At this point, China was no longer supposed to correspond to ideas, but ideas to China (Salitsky, 2014). 2. Protectionism of the Chinese government in the context of nascent globalization. In the West, in the late USSR and the new Ukraine and Russia, they underestimated the degree of scientific elaboration of the interconnected complex of strategies, policies, and practices in the PRC, including the issues of coordinating the world economic course with economic strategy and foreign policy. At the same time, the achievements of the Chinese inventory of foreign sociology and political economy were missed. Western rhetoric about globalization, picked up by Ukrainian and Russian reformers, and which, as Immanuel Wallerstein (2001) wrote, was one of the external causes of the collapse of the socialist camp in Europe and the collapse of the USSR, much earlier, from the very beginning of the reforms in the late 1970s, demanded that China should develop appropriate tools to counteract the destructive influence from outside. Therefore, the country turned out to be more prepared for the events of the 1990s and came out of numerous challenges with honor (Chinese Civilization, 2014).

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In globalization in China, threats and opportunities were discerned from the very beginning. On the one hand, globalization was perceived as a global economic competition from which there is no escape, and on the other hand, as an interaction in which both sides benefit. From adaptation to the world economy, the country was gradually moving towards its development—in contrast to integration into the world economy in Ukraine, Russia and other countries of the post-Soviet space, which destroyed the manufacturing industry of these countries. 3. The fundamental basis for China’s success is Confucianism. The key to China’s contemporary world-wide success is the skillful combination of tradition and innovation in the modernization process. In the modern history of the PRC, the Chinese concept of globalization and the experience of a strategy for socio-economic development have heuristic potential for developing countries. The Chinese concept of globalization is based on the need to separate the economic and political components of this process. The political component is considered as currently unacceptable for China, the process fraught with increased interference by leading Western countries in the internal affairs of China. Economic globalization is seen in China as an objective and inevitable process, requiring active influence on it from China in accordance with the objectives of national development. Such an impact is in the framework of an active foreign economic policy aimed at strengthening the country’s position in the global economy. Based on its economic and political interests, China will intensify its participation in international economic organizations, multilateral consultative mechanisms, regional integration processes, primarily in the Asia–Pacific region, thereby exerting a growing influence on the development directions of world economic cooperation (Lyubomudrov, 2011). The economic strengthening of China is based on the use of not only external, but also internal development factors, the importance of which is increasing in conditions of crisis in the world economy. The example of the PRC demonstrates the advantages of this approach. The country manages to maintain high dynamics of economic development during all years of the reform policy, including the period of the global economic crisis. Among the internal factors ensuring the stable growth of China is, first of all, the presence of a long-term development strategy. Such a strategy involves an accurate assessment of development goals, resource assessment, development of a mechanism for the implementation of target settings. Other important internal factors of China’s economic strength include the high rate of accumulation and the faster development of the investment process compared to non- production costs. Although China is one of the world’s leading recipients of foreign investment, the vast majority of investment is generated from domestic investment sources. An important factor in the country’s economic growth is the presence of a huge labor force, however, the gradual aging of the population leads to an increase in the burden on young generations and reduces the importance of this factor, which provides comparative advantages for China (Lyubomudrov, 2011).

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A positive aspect of globalization and growing economic openness of an increasing number of national economies is the possibility of accelerated penetration into China of new technologies, capital, and advanced management practices. Successfully combining the model of import substitution and export orientation, China has managed to become a real competitor in world markets not only in the newly industrialized countries of Asia, but also in the most developed countries of the world. For China, one of the most important problems of socio-economic development remains urbanization and the question of the equalization of urban and rural population in the country. In China, urbanization and economic growth go together. Nowadays, according to McKinsey experts, China’s middle class has 55 million households. By 2025, their number can grow by more than four times and reach 280 million, which will make up three quarters of all urban households. Such an increase in the size of the middle class in cities will create significant markets for industry, agriculture, transport and communications and the entire spectrum of the services sector, and cities will correspond to the type that is now prevalent in economically developed countries. In regulating migration processes in the city, state policy will be of great importance, which in the conditions of the PRC is able to determine the geographical direction of resettlement, as well as the preferred forms of urbanization: small and medium-sized cities or large urban agglomerations. From the point of view of urban development technologies, China has everything it needs, since it has developed metallurgy and is a leader in cement production, as well as produces all the necessary construction equipment. As evidence of the success of the Chinese construction industry may be considered the fact that in Shanghai there are already twice as many skyscrapers as in New York. Potentially dangerous is the aging of the urban population. Young people who came to the cities in recent years during the period of economic growth and those who had previously lived in cities, strengthened their economic situation and began to buy housing. Since July 1998, the country has been implementing housing reform, which aims to stop free distribution of housing. Commercialization of this sector has led to the fact that the proportion of economical housing instead of the planned 60– 70% has fallen to an average of 20% in the country (Berger, 2009). Housing prices are the highest in the east of the country, especially in Beijing and Shanghai and coastal areas, that is, the most economically developed and attractive regions for migrants. In the future, a significant part of the urban housing stock will be populated by retired pensioners. There will be a problem where to settle new waves of immigrants from the countryside. Migrations to the city worsen the composition of the rural labor force, as young men are the first to leave the village. In the countryside and in agriculture, the proportion of elderly and women is increasing, which negatively affects productivity. At the same time, the urban labor force is better prepared than migrants from rural areas, visitors from the countryside get worse jobs. The social protection of migrants from rural areas is smaller in volume than for those registered in the city, so the flows from the village to the cities in the PRC create a complex of social problems that the authorities need to solve (Akimov, 2017).

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A significant increase in the overall economic potential, the growth of well-being of the population positively affected the political activity and public consciousness of the population. But along with the construction of a society of average prosperity and the expansion of the horizons of people, new needs appeared, a decrease in subjective satisfaction with life. China has fallen into the “trap of modernization,” marked by an increasing copying of Western consumer standards and a deviation from one of the most important ideals of modernization—equalizing the social and economic conditions of various population groups. Economic reforms, expanding the sphere of market relations, cannot but be accompanied by the spread of relevant values. Drastic changes are taking place in the public mentality, a contradiction arises between a new way of life and the culture that prevailed before (Perelomov, 2007). The market economy, asserting formal equality of opportunity, does not tolerate equal results; the pursuit of profit promotes the growth of production, but at the same time generates greed, selfishness, money-grubbing, spiritual callousness. Market competition is focused on the interests of a “strong” individual, an homo economicus, whose leading motivation is the desire to maximize personal gain. The priority of individual values is being formed and the confrontation between entrepreneurs and direct producers, the haves and the poor is growing. The market and the quasi-market have introduced a cult of money and material success into the life of Chinese society, which contradicts traditional moral principles (Kondrashova, 2014). With regard to the abovementioned, in the development and implementation of a social policy strategy as a factor of economic growth for developing countries, as well as in the potential elimination of “modernization traps” for China, the idea of a community of shared future for mankind is relevant. One of the ways to promote the idea of a “Community of Shared Future for Mankind” is presented below. 1. First of all, it is necessary to correlate the vision of “A Community of Shared Future for Mankind” with the idea of sustainable development, which is common in Western society. It is important to find their common ground and show the undeniable advantages of the idea put forward by Xi Jinping. At the moment the concept of sustainable development is at the peak of relevance in Western science. As you know, the concept of sustainable development is a universal strategy for survival in the crisis of modern civilization, the symptoms of which became apparent in the middle of the twentieth century. 2. To answer the question: what can serve as an obstacle to the implementation of a new idea? A comparison of the ideals of these two concepts reveals the existence of contradictions that cover various levels of the organization of social being, and which need to be paid attention at: . firstly, there is a group of contradictions of a universal, system-wide nature . secondly, it is necessary to highlight the contradictions caused by the specifics of the dominant social relations (primarily production relations) . thirdly, there are contradictions at the individual level, determined by the characteristics of modern culture (for example, the massive dissemination of consumer culture) (Shiryaev, 2007).

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3. The process of resolving contradictions, taking into account already existing trends towards further globalization, involves: . if possible, the creation of a visa-free space (or to simplify the procedure for obtaining visas) that promotes freedom of movement . standardization of culture . the addition of all development vectors and, accordingly, the “historical destiny” that is common to all people. This circumstance is conditioned by the impossibility to solve global problems and ensure security without combining efforts from the side of all subjects of political power. In the world of the future, there is no place for private interests that are pursued without taking into account the consequences for other states. Chinese President Xi Jinping stated during the Boao Forum for Asia in 2001 that building “A Community of Shared Future for Mankind” requires: . . . .

making sure that all countries respect each other and treat each other equally creating mutually beneficial cooperation and ways for common development striving to create a common, comprehensive, stable space for security ensuring universal participation and mutual exchange of experience between different civilizations (Brant Philippa).

The achievement of mutual understanding in this matter among representatives of different states is possible provided that the potential of tolerance, dialogue, compromise, consensus is reached in getting public agreement regarding the necessity, as well as determining common ways and methods of building “A Community of Shared Future for Mankind.”

Appendices See Tables A85.1, A85.2, A85.3 and A85.4.

1,371,522

51,935

3047

1,354,506

128,070

24,652

51,291

2899

Japan

North Korea

South Korea

Mongolia

3163

52,588

25,275

128,070

1,388,753

2025

3283

53,248

25,593

128,070

1,406,200

2030

3408

53,917

25,593

128,070

1,423,866

2035

3538

54,595

25,593

124,900

1,423,866

2040

3672

55,281

25,593

121,809

1,423,866

2045

3812

55,281

25,593

118,794

1,423,866

2050

Source Akimov A.V. “DolgosroqnyЙ globalБnyЙ demografiqeskiЙ prognoz s ispolБzovaniem operacionalБnogo opisaniR demografiqeskogo perehoda. ObnovlennyЙ variant”. M., 2014

24,962

128,070

2020

2015

China

Table A85.1 East Asia population forecast until 2050

85 Social Policy as a Factor of Economic Growth: Western Practice … 665

— 12.9 14.0

Democratic People’s Republic of Korea

Japan

Republic of Korea 18.5

33.1

— 11.4

12.4

—

13.5

47.1

45.1

—

50.0

57.2

15–59 years

41.5

42.5

—

36.5

21.5

60+ years

Source World Population Prospects The 2015 Revision Key Findings and Advance Tables United Nations New York, 2015. TABLE S.6. PERCENTAGE DISTRIBUTION OF THE POPULATION IN SELECTED AGE GROUPS BY COUNTRY, 2015, 2050 AND 2100 (MEDIUM VARIANT) (Akimov A. B., Bopicov M. G., DepЮgina I. B., Kandalincev B. G. Ctpany Boctoka k 2050 g.: nacelenie, Эnepgetika, ppodovolБctvie, invecticionnyЙ klimat. C. 127–128. Inctityt voctokovedeniR PAH.—M.: IB PAH, 2017.—288 c.)

67.5

54.1

—

15.2

21.3

17.2

12.3

61.7

26.1

The world as a whole

People’s Republic of China 67.6

2050 0–14 years

0–14 years

60+ years

15–59 years

2015

Country or region

Table A85.2 The population of East Asian countries by major age groups in 2015 and 2050, %

666 O. Aleksandrova

6,338,611

3,880,128

2,064,211

960,235

758,360

15,195

118,136

40,778

2052

Asia

East Asia

People’s Republic of China

Democratic People’s Republic of Korea

Japan

Republic of Korea

Mongolia

829

8734

8864

9832

635,424

669,186

2,278,044

3,363,656

2014

Rural population, 1000 people

572

6325

2546

7569

335,029

355,117

1,850,638

3,212,333

2050

Rural population, 1000 people

71

82

93

61

54

59

48

54

2014

The proportion of the urban population among The total population, %

85

88

98

72

76

78

64

66

2050

The proportion of the urban population among The total population, %

Source Compiled by World Urbanization Prospects, The 2014 Revision. Highlights, United Nations, New York, 2014, Table 85.1. (Akimov A. B., Bopicov M. G., DepЮgina I. B., Kandalincev B. G. Ctpany Boctoka k 2050 g.: nacelenie, Эnepgetika, ppodovolБctvie, invecticionnyЙ klimat. C. 127–128. Inctityt voctokovedeniR PAH.—M.: IB PAH, 2017.—288 c.)

3181

44,709

105,784

19,507

1,049,948

1,250,224

3,313,424

2050

2014

Urban population, 1000 people

Urban population, 1000 people

The world as a whole

Country or region

Table A85.3 The number and proportion of urban and rural population among the total population in the main countries of East Asia in 2014 and 2050

85 Social Policy as a Factor of Economic Growth: Western Practice … 667

3.8

32.3

65.8

North America

South America

Asia

71.9

63.5

68.2

59.1 10.5

62.7

66.6

4.6

3.0

8.5

25.8

52.9

56.5

59.8

25.1

56.2

17.3

2.1

12.0

34.4

57.9

44.1

2000

13.0

70.9

5.3

4.3

11.3

32.7

58.0

60.8

63.8

29.3

60.6

21.8

2.7

14.4

39.6

61.9

47.5

1992

8.0

54.4

60.9

3.9

1.9

5.9

18.3

46.7

51.2

54.8

20.5

50.4

13.1

1.6

9.6

28.6

53.3

39.9

2010

7.6

53.5

59.7

3.8

1.8

5.5

17.2

45.5

50.1

53.8

19.6

49.3

12.4

1.5

9.2

26.5

52.4

39.1

2012

6.3

49.7

54.7

3.4

1.3

4.2

13.4

40.7

46.0

49.3

16.5

44.7

10.2

1.2

7.8

22.3

48.8

36.0

2020

5.5

45

50

3.0

1.0

4.0

13.0

38.5

44.0

48.0

16.0

42.5

8.5

1.0

6.5

18.5

45.0

33.0

2030

5.0

40

40

2.0

0.8

3.5

12.0

36.5

42.0

46.0

15.0

40.4

6.5

0.8

5.0

12.5

39.0

31.0

2040

4.0

35

30

1.2

0.6

3.0

11.0

34.5

40.0

44.0

14.0

37.5

4.5

0.6

4.0

8.0

35.0

28.0

2050

Source Until 2012: FAOSTAT//FAO Statistics division 16.05.2014, http://faostat.fao.org. (Akimov A. B., Bopicov M. G., DepЮgina I. B., Kandalincev B. G. Ctpany Boctoka k 2050 g.: nacelenie, Эnepgetika, ppodovolБctvie, invecticionnyЙ klimat. C. 127–128. Inctityt voctokovedeniR PAH.—M.: IB PAH, 2017.—288 c.)

Russia

India

China

73.9

5.5

6.5

Countries

Australia

4.6

7.1

Western Europe

35.8

13.7

43.7

17.3

59.3

61.7

64.9

62.3

23.4

2.9

West Asia

63.4

Southeast Asia

41.2

14.9

Europe

66.6

67.2

East Asia

South Asia

Central Asia

52.7

18.7

North Africa

America

48.2

63.0

50.5

68.3

Africa

1990

The world as a whole

1980

Regions

Table A85.4 The proportion of the economically active population in agriculture, %

668 O. Aleksandrova

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References Alekcandpova O.C. BzapmodiR konkypenci| ta paptnepctva Rk faktop pozvitky cepednБogo klacy v Ukpa|ni: filocofcБkiЙ analiz: monogpafiR. — K.: Bid. PAPAPAH, 2009. — 252 c./Aleksandrova O.S. (2009) Interaction of competition and partnership as a factor of development of middle class in Ukraine: philosophical analysis: monograph. Kyiv. Edition PARAPAN. 252 p. (in Ukrainian). Xu Lin. (2014) Top 10 most Influential Think Tanks in China. China Internet Information Center. 2014. February 3. URL: http://www.china.org.cn/top10/2014-02/03/content_31341799_3.htm (date of circulation: 03.02.2017). Cyimenko E. I. Homo economicus covpemennoЙ Ukpainy. PovedenqeckiЙ acpekt/E. I. Cyimenko, T. O. Efpemenko.—K. : Inctityt cociologii HAH Ukpainy, 2004.—244 c./Suimenko, E.I and Efremenko T.O. (2004) Homo economicus of modern Ukraine. The behavioral aspect. K.: Institute of Sociology of NAS of Ukraine, 244 p. (in Russian). Tolctoyxova HadeЖda. CtpategiR pazvitiR KitaR moЖet leqБ v ocnovy pocciЙckoЙ Эkonomiki. PocciЙckaR gazeta. FedepalБnyЙ vypyck. 06.02.2019./Tolstoukhova Nadezhda (2019). China’s development strategy can form the basis of the Russian economy. Rossiyskaya gazeta. Federal issue. 02/06/2019. https://rg.ru/2019/02/06/strategiia-razvitiia-kitaia-mozhetlech-v-osnovu-rossijskoj-ekonomiki.html (in Russian). DingyЙ Xyan. KitaЙ: podxody i ocobennocti Эkonomiqeckix ppeobpazovaniЙ. Ppoblemy teopii i ppaktiki yppavleniR. №6/Dingui Huang. China: approaches and features of economic transformation. Problemy teorii i praktiki upravleniya. Number 6 http:// vasilievaa.narod.ru/2_6_00.htm (date of circulation: 12.03.2016) (in Russsian). Galagan A.B., Savinov Y.A. (2016). Evolution of China’s model of economic growth. Rossiyskiy vneshneekonomicheskiy vestnik (Russian Foreign Economic Bulletin). № 6. pp. 40–51. file:///C:/Users/Asus/Downloads/evolyutsiya-modeli-ekonomicheskogo-razvitiya-kitaya.pdf (in Russian). Rxen Xyan. Kapitalizm po-kitaЙcki: Gocydapctvo i biznec.—2-e izd.—M. : AlБpina Pablixep, 2012.—C. 73–134./Yashen Huang (2012). Chinese Capitalism: State and Business. - 2nd ed. - M.: Alpina Publisher. pp. 73–134. (in Russian). CalickiЙ Alekcandp, TaciЙ Bladimip. AnatomiR kitaЙckogo podБema i ego mipovoe znaqenie (kpitika civilizacionnogo dickypca)/Salitsky Alexander, Tatsy Vladimir. Anatomy of the Chinese rise and its global significance (criticism of civilizational discourse). http://www.perspektivy.info/oykumena/azia/anatomija_kitajskogo_podjema_ i_jego_mirovoje_znachenije_kritika_civilizacionnogo_diskursa_2014-5-21.htm (in Russian). KitaЙckaR civilizaciR v globalizipyЮwemcR mipe. Po matepialam konfepencii. B 2-x tt./Otv. ped.—B.G. Xopoc.—M.: IMЭMO PAH, 2014.—393 c. ISBN 978-5-9535-04089 Tom I.—M.: IMЭMO PAH, 2014.—203 c./Chinese Civilization in the Globalizing World. On the Base of the Conference Materials (2014). In 2 vol./V.G. Khoros, ed. M.: IMEMO RAS, 393 p., ISBN 978-5-9535-0408-9; vol. I. M.: IMEMO RAS, 2014. 203 p., ISBN 978-5-9535-0409-6 (in Russian). LЮbomydpov A.B. PolБ KitaR v ppoceccax globalizacii mipovoЙ Эkonomiki. DicceptaciR na coickanie yqenoЙ ctepeni kandidata Эkonomiqeckix nayk. (CpecialБnoctБ 08.00.14. BycxaR attectacionnaR komicciR PocciЙckoЙ Fedepacii). Mockva, 2011. C. 147/Lyubomudrov A.V. (2011). The role of China in the processes of globalization of the global economy. The dissertation for the degree of candidate of economic sciences. (Specialty 08.00.14. Higher Attestation Commission of the Russian Federation). Moscow. p. 147 (in Russian). https://www.mckinsey.com/featured-insights/urbanization/comparing-urbani zation-in-china-and-india Bepgep R.M. ЭkonomiqeckaR ctpategiR KitaR. M., ID «Fopym». 2009. C. 425./Berger Y.M. (2009). The economic strategy of China. M., Publishing House “Forum”. p. 425. (in Russian).

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Akimov A. B., Bopicov M. G., DepЮgina I. B., Kandalincev B. G. Ctpany Boctoka k 2050 g.: nacelenie, Эnepgetika, ppodovolБctvie, invecticionnyЙ klimat. C. 127–128. Inctityt voctokovedeniR PAH.—M.: IB PAH, 2017.—288 c. Akimov A.V., Borisov M.G., Deryugina I.V., Kandalintsev V.G. (2017). Countries of the East by 2050: population, energy, food, investment climate. S. 127–128. Institute of Oriental Studies RAS. M. p.288 (in Russian). Pepelomov L.C. Konfycianctvo i covpemennyЙ ctpategiqeckiЙ kypc KHP. Mockva. 2007. c. 219. / Perelomov L.S. (2007).Confucianism and the modern strategic course of the PRC. Moscow. p. 219. (in Russian). Kondpaxova L.I. Civilizacionnye faktopy pefopm v covpemennom Kitae C. 164 // KitaЙckaR civilizaciR v globalizipyЮwemcR mipe. Po matepialam konfepencii. B 2-x tt./Otv. ped.—B.G. Xopoc.—M.: IMЭMO PAH, 2014.—393 c. ISBN 978-5-95350408-9 Tom I.—M.: IMЭMO PAH, 2014.—203 c. ISBN 978–5–9535–0409–6/Kondrashova L.I. (2014). Civilization Reform Factors in Modern China P. 164. Chinese Civilization in the Globalizing World. On the Base of the Conference Materials. In 2 vol./V.G. Khoros, ed.—M.: IMEMO RAS, 2014.—393 p., ISBN 978–5- 9535–0408–9; vol. I.—M.: IMEMO RAS, 2014.— 203 p., ISBN 978–5–9535–0409–6 https://www.imemo.ru/files/File/ru/publ/2014/2014_019.pdf (in Russian). XipRev A. E. Utopizm koncepcii yctoЙqivogo pazvitiR. OmckiЙ nayqnyЙ vectnik. CepiR «Filocofckie nayki». 2007. - № 5 (centRbpБ- oktRbpБ). C. 85–88./Shiryaev A. E. (2007). Utopianism of the concept of sustainable development. Omsk Scientific Herald (Omskiy nauchnyy vestnik). Series “Philosophical Sciences”. No. 5 (September-October). pp. 85–88. Brant Philippa. One belt, one road? China’s community of common destiny. https://www.lowyinsti tute.org/the-interpreter/one-belt-one-road-chinas- community-common-destiny. Akimov A.B. «DolgocpoqnyЙ globalБnyЙ demogpafiqeckiЙ ppognoz c icpolБzovaniem opepacionalБnogo opicaniR demogpafiqeckogo pepexoda. ObnovlennyЙ vapiant». M., 2014./Akimov A.V. “Long-term global demographic forecast using an operational description of the demographic transition. Updated version.” M., 2014. (in Russian). World Population Prospects The 2015 Revision Key Findings and Advance Tables United Nations New York, 2015. Table S.6. Percentage Distribution of the Population in Selected Age Groups by Country, 2015, 2050 and 2100 (MEDIUM VARIANT). World Urbanization Prospects. The 2014 Revision. Highlights. United Nations, New York, 2014, table 1. FAOSTAT // FAO Statistics division 16.05.2014h http://faostat.fao.org.

Chapter 86

China and the Changing Global Monetary Landscape Gal Luft

For most of the past seventy years China has played a relatively small role in the global monetary landscape. It was inward looking, focused on its own domestic economic development and the monumental task of lifting hundreds of millions of its people from poverty. Its currency, the renminbi, was barely used outside of its borders and its banking system has been insulated from the world and heavily reliant on Hong Kong, China, the world’s third largest financial center, for raising capital and for facilitating much of its financial interactions. Furthermore, through its large volume of trade with the US and other major economies China has been able to accumulate more than $3 trillion in foreign exchange reserves. Its trade surplus with the US allowed it to purchase roughly one fifth of US foreign debt, becoming America’s number one creditor nation. As long as the two countries were in friendly terms and their economies closely intertwined there was no reason for China to question the status quo. But this is no longer the case. Thanks to the size of its market, its growing volume of trade with the rest of the world and its technological advancement China’s role in the global economy is increasing. This rapid ascendance has alarmed Washington, leading to a sea-change in its attitude toward Beijing. China is no longer viewed by the US as an economic partner but as a strategic competitor whose rise must be curbed. Republicans and Democrats are equally committed to deny China critical technologies, to transform US-China trade relations and to pressure Beijing to undergo structural changes. This means that the new approach toward China is not a passing phenomenon but the “new normal” for many years to come. The trade war, the blacklisting of Chinese technology companies and the arbitrary designation of China as currency manipulator have all brought Beijing to reevaluate its relations with the US and to rethink the wisdom of increasing its exposure to the US dollar. What could G. Luft (B) Institute for the Analysis of Global Security, Gaithersburg, USA e-mail: [email protected] Ostim Technical University, Ankara, Turkey © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_86

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make China less dependent on the American currency is the fact that it enjoys today growing international acceptance of the renminbi. Since the International Monetary Fund in 2016 formally added the renminbi to its Special Drawing Rights (SDR) basket, more than 60 countries have included it in their reserve currency portfolio and the number is growing. The internationalization of the renminbi is today a key element in China’s “going out” strategy. The share of the renminbi held by central banks’ foreign currency reserves is already two percent and growing steadily, while the percentage of the dollar has dropped from 72% in 2000 to 62 percent now.1 But the road for the renminbi to become a tier-1 currency on par with the dollar or the euro is still long and its rise would depend not only on China’s policies but even to a greater extent on the decisions made in the coming years in Washington and Brussels.

86.1 From Unipolar Currency Regime to a Multipolar One The post-World War II monetary system was formally put in place in 1944, at the Bretton Woods Conference in New Hampshire, where the victorious allied powers created financial institutions like the International Monetary Fund and the World Bank as the pillars of the post-war financial world order. More consequential was the official replacement of the British Sterling by the US dollar as reserve currency of the world. A reserve currency is a widely accepted currency that is held by central banks to allow them to intervene in the foreign exchange market when their currency needs support. It is also the currency that is most prominently used in global trade. Trading partners are often reluctant to hold too much of each other’s currencies. They prefer to use a commonly accepted currency which is both liquid and stable. Being the global reserve currency, the dollar today makes 80 percent of global trade. This gives the US some advantages. In some ways the special status of the dollar is the most important element of America’s power – even more than its military prowess. A country whose currency is recognized as reserve currency can borrow as much money as it wants at relatively low cost. This allows the US to run large fiscal deficits and accumulate very high level of debt at low interest. By virtue of having the dollar reserve currency the US is also spared costly exchange rate fees when trading with other nations. A reserve currency holder also enjoys much control over the plumbing of the global financial system allowing it to use coercive economic measures to impose its laws and its foreign policies on other countries. But no reserve currency enjoys the special status forever. Since 1450, six currencies held global reserve status: the Portuguese escudo, the Spanish peso de ocho, the Dutch guilder, the French franc, the British pound and, most recently, the US dollar. Each occupied the throne for roughly 80–100 years, corresponding with its country’s international preeminence. Since the dollar has been de facto the dominant currency 1

U.S. Treasury Department presentation, https://www.treasury.gov/resource-center/data-chart-cen ter/quarterly-refunding/Documents/q12019CombinedChargesforArchives.pdf.

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since the 1920s it is now nearing its life expectancy. Will its destiny be different from that of previous reserve currencies? The replacement of the dollar by another single sovereign currency is not likely to happen in the foreseeable future, but the decline of the dollar’s share in the global currency basket and in international trade in favor of a combination of other currencies backed by precious metals and alternative platforms of exchange can already be seen. There are several reasons the dollar’s decline is likely to intensify in the coming years. First, as the international system is shifting from a unipolar system dominated by the US to a multi-polar architecture in which several great powers are vying for influence, it is only natural that those changes will also be reflected in the monetary landscape. In other words, the dollar’s centrality will be eroded while other currencies, including those of developing economies like China and India, will assume a larger role in par with their economic and geopolitical posture. And indeed in 2018 the International Monetary Fund predicted that the global monetary system would transition from a bipolar system in which two currency blocs, the dollar and euro, dominate, to a tri-polar one, which includes the renminbi bloc.2 Second, the world is increasingly troubled by US aggressive use of coercive economic measures like secondary sanctions as well as the extraterritorial reach of its law enforcement agencies in order to impose its laws and its foreign policies on other countries. The threat of being disconnected from the dollar system has caused many governments and corporations to grudgingly accept Washington’s dictates. The most recent example is Iran. The Trump administration’s decision to unilaterally withdraw from the nuclear agreement with Iran and to impose a ban on Iranian oil exports forced all of Iran’s trading partners into compliance for fear of being targeted by America’s sanctions. Altogether, today one in ten countries are under US sanctions and the club of governments, corporations and individuals who are targets of US financial warfare is growing by the day. But it is precisely this overuse of power that grows the motivation of other countries to reject the US hegemony and to seek ways to strengthen their financial sovereignty. This is done through a strategy called de-dollarization which includes tactics like shifting bilateral trade to non-dollar currencies, diversifying foreign exchange reserves from dollars to gold and alternative currencies, re-denominating debt in alternative currencies, creating new cross-border payment mechanisms which cannot be policed by the US government and adopting fintech technologies and digital currencies.3 Russia, China, India, Pakistan, Turkey, Iran, Venezuela and even Europe have all applied some of those tactics. In addition to their domestic de-dollarization efforts those countries also inject the de-dollarization agenda into international organizations with which they are closely associated like ASEAN + 3, Eurasian Economic Union the Shanghai Cooperation Organization and, perhaps most important, BRICS. Former Brazilian 2

Camilo E. Tovar and Tania Mohd Nor, Reserve Currency Blocs: A Changing International Monetary System?, IMF Working Paper, January 2018, https://www.imf.org/~/media/Files/Publications/ WP/2018/wp1820.ashx. 3 Gal Luft and Anne Korin, De-dollarization: The Revolt against the Dollar and the Rise of a New Financial World Order, Amazon 2019.

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president Lula da Silva revealed recently that BRICS was created for developing countries to create their own currency to become independent from the US dollar in their trade relations.4 The Belt and Road Initiative also provides China and dozens of Eurasian, Southeast Asian and African countries with a new framework to enhance bilateral trade and issue debt in non-dollar currencies. The third reason so many countries wish to de-dollarize their economies has to do with America’s growing and unsustainable debt. Recently US deficit spending has reached roughly $1 trillion a year. This forces the US government to substantially increase its borrowing from the rest of the world as well as from its own citizens. It also creates impetus for the US to devalue its currency in order to manage its debt obligations more easily. But the eroding international trust in the US, especially in light of Trump’s attempts to politicize and coerce the Fed, combined with the low yield of long-term US bonds and the absence of any sign that future administrations intend to reign in the country’s fiscal deficit (to the contrary, all 2020 Democratic presidential candidates are promising more spending, some arguing that “deficits don’t matter”) are causing central bankers around the world to rethink the wisdom of increasing their dollar holdings in their foreign reserves portfolios. Fourth, commodity markets, roughly totaling $5 trillion a year, are gradually shifting away from the dollar. Since 1970s most of the oil and other commodities traded around the world have been priced and exchanged in US currency. Europe, which trades most of its energy with Russia, uses mostly the dollar rather than its own euro. The same is true for Asia, the world’s fastest growing energy market. This has been a convenient arrangement for the US. As the demand for food, energy and metals increases so does the demand for dollars, and this allows the US to finance its deficit spending by printing more and more dollars. But here too things are changing. Partly due the reasons mentioned before and partly due to the fact that the shale revolution has made the US far less dependent on imported energy and therefore it plays a smaller role in global energy trading, more and more oil contracts are being priced and executed in alternative currencies. In December 2018, the European Commission issued a blueprint to promote a stronger international role for the euro. Among its many proposals the blueprint called for intergovernmental energy agreements to be denominated in euros rather than dollars.5 In 2019 one of the world’s top oil producers and exporters, Russia’s Rosneft, ditched dollar for euros in all future deals. Asia is also going in this direction. In 2018 China introduced the Petroyuan, an oil future contract denominated in renminbi and traded in the Shanghai International Energy Exchange. This allows China, the world’s number one oil importer, to trade more of its oil in renminbi. In addition, in July 2019, China and Russia agreed to conduct a growing part of their bilateral trade, mostly oil and natural gas, in non-dollar

4

“BRICS was created as a tool of attack,” Asia Times, August 29, 2019, https://www.asiatimes. com/2019/08/article/brics-was-created-as-a-tool-of-attack-lula/. 5 “Brussels Sets out Plan for Euro to Challenge Dollar Dominance,” Financial Times, December 3, 2018, https://www.ft.com/content/58927e22-f729-11e8-af46-2022a0b02a6c.

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currencies and to develop alternative payment system.6 As more countries attempt to de-dollarize their oil trading it is likely that other commodities will follow suit, hence reducing the overall demand for the US currency. Finally, technology is also affecting the demand for the dollar. The development of the information economy has given rise to digital currencies based on new technologies like distributed ledger technology (Blockchain) and big data analytics. Those technologies enable new financial instruments operated by state and non-state actors alike, and when combined with 5G internet and quantum computing future financial platforms will be able to process over a million financial transactions per second. Over the past decade more than two thousands crypto-currencies have been introduced and tested, most of them unsuccessfully. While most crypto-currencies failed to win broad market acceptance, it is the principles behind the idea of a virtual currency which will set the foundation for future monetary architecture. Multinational corporations like Facebook, Walmart, and JP Morgan have already understood that and they are preparing to launch their own digital currencies while several central banks are seriously considering doing the same. The emergence of central bank digital currencies (CBDC) could give rise to a whole set of debt instruments that could reduce the demand for dollars both in international commerce as well as in debt financing. All these mega-trends do not bode well for the future of the dollar as reserve currency, but they do not necessarily mean that the dollar’s decline will necessarily elevate the renminbi. This will depend to a great extent on the future of the Eurozone and even more so on China’s ability to internationalize its currency while trying to maintain the strongest possible ties under the new circumstances with the US and its dollar system.

86.2 China and the New Financial Order Seventy years after its establishment the PRC is not only standing at the doorstep of a new financial world order, but it is also the country that is best positioned to shape this order. In the past it was Europe and Japan that challenged the dollar hegemony, but this is no longer the case. Europe’s economy is stagnating, and the future of the Eurozone is in question. Japan’s economy has been more or less frozen for 15 years and its public debt is the highest in the world. China is the only country whose economy is both big enough and dynamic enough to mount, together with other likeminded nations, a challenge to the dollar system. But for this to happen China must create an alternative payment system and rally as many of its trading partners to agree to trade with it in non-dollar currencies. As part of this it must expand the use of the renminbi and bring it to par with its influence and prestige as the world’s second largest economy. But this is going to be a long and challenging process. Presently the 6

“China and Russia Look to Ditch the Dollar with New Payment System in Move to Avoid Sanctions,” South China Morning Press, November 22, 2018, https://www.scmp.com/economy/chinaeconomy/article/2174453/china-and-russia-look-ditch-dollar-new-payments-system-move.

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renminbi is the world’s fifth-largest payment currency, third- largest trade financing currency and fifth-largest foreign exchange transaction currency. But these rankings should not mask the fact mentioned earlier that China’s currency barely makes two percent of global foreign exchange reserves held by central banks compared to the dollar’s share of 62 percent. In other words, the renminbi still has a great deal of catching up to do to win greater international recognition and credibility. The key to the internationalization of the renminbi lies in market acceptance, but central banks, while slowly losing their appetite additional exposure to the dollar, are still leery about adopting the Chinese currency as an alternative. In order for the renminbi to become a tier-1 reserve currency, it must be fully convertible to other currencies so that central bankers can exchange it at ease with other assets whenever they want. This is not the case now. China’s capital controls are still tight and cumbersome and it is not clear if China is ready to relinquish control over its currency. Even if China were ready to do so there are other challenges. The recent slowdown in China’s domestic economy, partly as a result of the trade war, might sap foreign confidence in the internationalization of the renminbi. Due to the depreciation of the renminbi China is experiencing capital outflows which might tempt Beijing to tighten its control over the currency rather than relinquish it. Additionally, the international landscape is becoming increasingly unstable, and this makes new currency acceptance more difficult. Whether China manages to strike the right balance between openness and control the rise of its currency will depend on two other factors. First is technology. The next revolution in monetary affairs will be a result of technological breakthroughs in the way society handles payments, credit, and banking. While it is premature to determine how innovations in the cryptocurrency and distributed ledger technology space may impact the global financial system there are first signs of an emerging competition among the major economic powers on what the new system would look like. The first country to successfully deploy a central bank digital currency and set global standards for emerging technologies will have a huge strategic advantage in shaping the world’s monetary architecture. Thanks to the prevalence of digital payments in China and the country’s investments in fintech research and innovation China is strongly positioned in this race. The People Bank of China is reportedly poised to become the first issuer of a central bank digital currency.7 Facebook’s announcement about its intention to launch a digital currency called Libra raised concerns in China that the Libra would end up strengthening the dollar’s dominance and this only boosted China’s motivation to beat the US to the punch. The second and most important factor determining the future of the dollar is the future of the US itself. The US is experiencing internal social and cultural strife the like of which has not been seen since the American Civil War. This causes it to become increasingly isolationist and politically paralyzed. It is yet to be seen whether the current turmoil and the deep partisanship is a temporary phase or whether it is a harbinger of chronic and irreversible decline of the American superpower. Should the 7

“China’s Digital Currency may be World First,” The Telegraph, September 9, 2019, https://www. telegraph.co.uk/china-watch/technology/china-digital-currency/.

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US manage to regain its leadership status, restore its friendships, stop the wholesale wrecking of global institutions and covenants, balance the relations with China and begin to put its fiscal house in order, the dollar will retain its status for many years to come. Failure to correct the current course would cause the dollar to lose its strategic status. In other words, the future of the dollar will be more dependent on the actions of Washington than on those of any of its competitors. Currency is to geo-economics what bullets are for geo-politics. To the degree that China decides to play a leading role in shaping the future international system, currency is the instrument of statecraft that it cannot afford to ignore.

Chapter 87

China and the Developing World: Past and Future Guillermo José Tolosa Silva

87.1 Introduction Only 25 years ago my generation of university students was taught that economic growth around the world was governed by dependence theory, which established that growth in developing countries was inevitably slower than in advanced countries. As a matter of fact, advanced countries’ privileged position was at the expense of developing countries and there is thus no possibility of convergence. The framework was dominant in Latin America and other developing countries, as the data appeared to provide firm support to the argument, as developing countries’ growth was failing to grow more than advanced countries. The last twenty years have seen a fundamental break with the past. Developing economies grew fast, rapidly converging to advanced economies living standards (see Figs. 87.1 and 87.2). The dependence theory is likely to be shelved into history books, and younger generations of our countries will be exposed to more hopeful theories and data. This development has coincided with the dramatic irruption of China into world trade and finance in the last two decades, which has arguably played a key role. The obvious channels through which China has been changing the fate of the rest of developing countries have been trade, and, more recently, funding. There is a third “soft” channel that has been slow in entering the scene but is bound to become an equally powerful: ideas. The lessons from its growth experience are underemphasized and should feature more prominently in the global debate. In this note we first shed light on the standard channels by which China has helped developing countries, and then focus on the

G. J. T. Silva (B) Uruguayan Centre for Economic and Social Reality Studies, Montevideo, Uruguay e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_87

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Fig. 87.1 GDP growth. Source WEO

Fig. 87.2 EM countries growing above AM average. Source WEO

latter one. We conclude offering perspectives about what the future may bring in terms of China’s role in promoting growth in developing countries.

87.2 China’s Impact on Developing Countries Trade and Finance During the last fifteen years, China contributed to a faster expansion to world growth, accounting for more than one-fourth of global growth in the last twenty years (Fig. 87.3). Chinese growth had more intense spillovers to developing countries

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than advanced economies growth, as it has been more intensive in imports. China has become the most important merchant in the world (Fig. 87.4). Chinese imports have been relatively more skewed towards commodity imports, which has derived in a steep increase in the average price of commodities, a key impulse for commodity-exporting countries. The effect of the evolution of Chinese economy in commodity prices is now quite startling, representing close to 70% of global demand in some key commodities (see Fig. 87.5). China has also contributed critically to the ease of financing of the world economy. China has accumulated huge external assets during this period (see Fig. 87.6) both as a consequence of large current account surpluses but also through scaling up its external balance sheet (leveraging higher external assets with higher external liabilities) (see Fig. 87.7).

Fig. 87.3 World GDP growth. Source World Bank

Fig. 87.4 Trade. Source Omc/Weo/Fm

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Fig. 87.5 Imports: commodities. Source Com TRAD

Fig. 87.6 External assets. Source Oxford Economics /Haver Analytics

Fig. 87.7 External asset accumulation. Source Oxford Economics / Haver Analytics

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The impact of China on world financing conditions has also increasingly benefited developing countries. The total direct exposure is still limited (see Fig. 87.8) but has increased in the last five years. During 2003–13, China focused on accumulating external assets in safe US assets (see Fig. 87.9). By depressing base rate, global borrowing costs for developing countries were kept at bay at a time a booming world economy would have pushed interest rate higher. During the last 5 years, China has shifted its external asset accumulation strategy, transitioning from portfolio asset accumulation towards lending and investing directly, to a large extent into developing and developing countries. In the last five years, China has become the world leader in accumulating loan/ deposits type of assets (see Fig. 87.10). This has been especially helpful for cashstrapped low-income countries, in which China has become main lender, above World Bank, IMF and private sector from elsewhere in the world (Reinhart et al.).

Fig. 87.8 Geographical of external assets. Source Marsh and Tolosa, Oxford Economics

Fig. 87.9 Capital outflows. Source SAFE

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Fig. 87.10 2014–2018, Accumulation of deposits and loans. Source Oxford Economics/Haver analytics

87.3 Lessons from Its Growth Path 1. The Early Stage of Growth Having achieved systematic high growth that lifted 850 million people out of poverty in just two decades, China is the most successful story of a development path, for which it offers inspiration and key lessons for developing countries. Developing countries should more actively strive to learn key elements of Chinese strategy. Chinese experience of high, steady growth offers a particularly acute contrast with our experience in Latin America, marked by boom-bust cycles, periods of high hopes only followed by despair. Excesses in good times derive in full- fledged currency, banking and/or sovereign crisis, which corrode basis for sustainable growth as they put kids out of schools, decimate confidence in the political system, push families to migrate, and turn entrepreneurs into short-term speculators. There are five key pillars the China experience to achieve such sustainable growth which we would have greatly benefited to incorporate in our policy frameworks. A key leitmotiv is that China has been aware of natural limits of each of the key pillars for growth on the basis of the different stages of development, the focus of this section is on pillars that sustained growth until at least the global financial crisis. First, common to experience of other Asian countries is that sustainable growth must rely on exports as a fundamental engine (see Fig. 87.11). Domestic markets, even of the size of China, eventually impose limits. Too many times developing countries have engaged in “import-substitution” strategies, including present-day Mercosur. In this regard, it’s not enough to reduce trade tariffs and barriers, but also to have a competitive currency, that fluctuates but is not subject to abrupt changes that introduce too much risk to export-oriented business undertakings. A second key lesson from China is to limit needs of external funding by having high domestic savings (see Fig. 87.12). And external funding that does come to support development efforts better comes primarily in the form of equity rather than

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Fig. 87.11 Trade in goods. Source World Bank

debt (as it has usually been the case in Latin America) (see Fig. 87.13). China is now one of the developing countries with less external debt in the world (see Fig. 87.14). Bondholders or bank-type flows are too fickle: discrete events like defaults implies getting timing of exit right is crucial so they lend themselves to herd-type behavior. Global bank and bond flows have been driven by search for yield. They have been volatile and massively procyclical, deepening the pain at most difficult times. Foreign direct investments are more stable, investors are in for the longer term, shoulder the risk of their investments, and their investments spill over to the local economy through technology transfer, human capital formation. A third lesson is that infrastructure is crucial. Other developing countries have fallen too easily to populist demands for current spending, sacrificing infrastructure which then becomes a bottleneck for growth.

Fig. 87.12 Investment and consumption across countries. Source World Bank

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Fig. 87.13 Average annualizes inflows. Source SAFE and Central Banks

Fig. 87.14 Gross external debt across countries. Source National Central Banks

Fourth, build-up generous buffers in the form of Central Bank reserves is crucial to provide financial and external stability and avoid abrupt currency movements (see Figs. 87.15 and 87.16). Fifth, when there is a preference from the government and society for significant public sector weight in the economy, the publicly owned enterprises play a prominent role in some sectors of the economy, they do not necessarily need to drag the whole economy with unacceptably slow productivity growth. On average, private sector does tend to exhibit higher productivity, including in China. However, when publicly owned companies are allowed to compete, open up their capital structures to allow private participation, have the effective oversight from an external agency like SASCA, China has shown important success stories. Such should be

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Fig. 87.15 International reserve assets. Source IMF

Fig. 87.16 International reserve assets across countries. Source Own Calculations based on Central Banks and IFS

a powerful lesson to our countries that have debated for too long on the exclusive axis of big state/small state, and much less on effective state/unproductive state. Setting up competition, right incentives for executives, control structure, are all crucial ingredients for success. 2. Second Phase As China accessed higher stages of economic development, new engines of growth were needed. China has been successfully administering such transitions, but challenges emerge. Infrastructure eventually hit significantly decreasing marginal returns. China’s share of investment on GDP grew significantly until 2010 (see Fig. 87.17), since then it has gradually given greater space for consumption.

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Fig. 87.17 Consumption and investment. Source NBS

China has also been transitioning from heavy industry to lighter (cleaner) industry, low-end to high-end manufacturing, from manufacturing to services (see Fig. 87.18), and from investment to consumption from domestic debt to other sources of financing. China is also successfully transitioning from exports based on foreign direct investors to exports from domestic firms (see Fig. 87.19). China, still having a far lower GDP per capita than advanced countries, has managed to become a global leader in few sectors (drones, electric cars, to name a few). More recently, China has also started to transition away from a domestic debtbased model of economic growth. While domestic debt is in a way an inevitable corollary of high propensity to save from Chinese households and is typically far safer than external debt as a source of financing, it can lead to financial instability (see Fig. 87.20 for a comparison with other crisis-stricken countries). Having exhibited

Fig. 87.18 GDP by industry. Source NBS

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Fig. 87.19 Exports: by enterprise type. Source China Customs Statistics

the capacity to grow without recurring to rapid debt growth is then a milestone in Chinese growth model (in all other cases, cooling of debt build-up took place amidst collapsing economic growth). The ability to embrace these transitions in a timely fashion before “hitting a wall” should serve as an important lesson for developing countries. One aspect to consider, however, is that fallout from these difficult transitions in overall economic activity at a time of global economic weakness has been partly mitigated by a reinvigoration of public investment (see Fig. 87.21). This process involved reverting decadeslong process of greater role for private investment in total investment. Given higher productivity of private sector investment discussed above, such development could potentially represent a drag on sustained high productivity growth going forward.

Fig. 87.20 Credit to non-financial private sector. Source Own calculations based on BIS

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Fig. 87.21 Investment in fixed assets. Source NBS

87.4 Future Perspectives Going forward, we believe the positive impact of China on developing countries will continue to deepen. China is likely to continue playing an increasingly key role supporting developing countries’ trade and funding opportunities through bilateral engagements. Developing countries are likely to continue to absorb lessons from China’s growth experience to improve policy frameworks and avoid costly crisis. China could usefully help in this process by playing a more active role in showcasing the lessons from its growth experience in order for developing countries to be better able to reap the benefits of eschewing risks of past approaches. But we will argue that the most promising effect of China on developing growth will be related to its increasingly assertive role as guardian of global trading system and globalization process. From a protracted period of time, the US built a global order based on an increasingly open trading system which served developing countries well. When openness intensified since 1990, progress intensified. The US has now decided to retrench from the world it created. China, as the largest merchant in the world, becomes the natural substitute in this role, and it is indeed taking very important steps to assume such leadership. It is also particularly suited to play it by being a living example to the rest of the world of possible achievements of opening the economy and believing in globalization. There are five angles for this role. First, the Belt and Road Initiative (BRI). Infrastructure based lending is connecting the developing world and hence most concrete contribution for global integration through roads and bridges. China’s capital flows, being mostly official, bring the opportunity of more stable flows to the rest of developing world, contributing to more stability of currencies and hence a further contribution to trade. But they also bring the challenge of over-indebtedness, bring the

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challenge of excessive debt burdens that, as discussed in previous section, need to be carefully managed for them to be supportive of growth. A second angle relates to China’s own openness to be able to continue to lead by example. Recent unilateral reduction in restrictions for FDI, reduction in trade barriers, and openness to global capital markets, go in the right direction. While international experience shows that gradual approach to openness to avoid dislocations is necessary, the direct and indirect effects for the global order for China to continue in this path are of paramount importance. A third angle is to encourage more foreigners to study and work in China. There is an asymmetry of the presence of Chinese students, professors, and professionals abroad and those that come to China. For China to be adopt an effective leadership role in safeguarding the global trading system, China would benefit from greater understanding of its culture and economic model from the rest of the world. Reducing working visa restrictions, further promote learning of Chinese abroad, and funding a greater number of foreign student scholarships in China seem natural steps. By attracting more talent progress other developing countries can more effectively learn about China’s development path. China could benefit from investing in a few centres of excellence of public policy that attract visiting top public policy leaders. Universities in the US are too focused on academic abstract thinking that is of little help to economic practitioners. Incentives of professors are skewed toward writing papers on purely mathematic abstract economics that very few people who make real decisions end up reading. There is a massive opportunity for China and other countries to provide global policymakers more applied schools of thinking that can shape up global debate. Also, it is increasingly crucial for developing countries analysts and policy makers to understand the dynamics of macroeconomic conditions in China as it has a key impact on commodity prices (see Figs. 87.22 and 87.23) and their own economic activity.

Fig. 87.22 Commodity prices and China’s economy. Source National Bureau of Statistics, World Bank

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Fig. 87.23 Crude oil price and China’s rail freight. Source National Bureau Statistics

But a fourth angle is that China must also focus its energy and attention on being a guardian of multilateralism. The rest of the world should also play a supporting role, but, given US retreat without China’s leadership the global system as we know it faces serious risks of falling apart. Putting effort in securing bilateral trade deals would imply a distraction of protecting the multilateral system that has been the basis of global progress in the post-war era. The multilateral system was gradually improving but is now under serious threat. Global institutions such as the IMF, WB, UN, had also been improving, but are now under attack. China’s is set to have a greater voice, de jure or de facto, or these institutions are likely to lose their fundamental objective. The International Monetary Fund, and the World Bank are institutions that provides fertile ground for cooperation and strengthening to bolster the Chinese vision of a shared vision for humanity. The Bretton Woods institutions do not have the mission for a global politically liberal order, it has been rather Westphalian in nature, in line with Chinese vision, abstaining from pressuring or withdrawing support to countries based on their political systems. The IMF has pushed, more narrowly, and in line with Chinese vision, for a liberal trading regime and the deepening of globalization. While originally too cavalier about risks of rapid reform, the IMF has developed, over time, more streamlined, nuanced and country-specific recommendations to foster growth. Greater Chinese influence would have probably implied greater weight of lessons from Chinese economic growth in IMF policy advice. Given the success of Chinese example, such platform of global cooperation would have ideal one for China to exert the responsibility of sharing key elements of its experience. And also, to help the IMF to continue its transition to greater focus on its conditionality. A greater Chinese voice at the IMF could have, for example, implied more focus and priority on pro-growth infrastructure spending. Far too often fiscal adjustments required by IMF focus heavily on capital spending, which is the easiest to cut, but the one with the worst long-term consequences. For example, it would have meant more

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caution with capital account openness, which far too often led to excess cross-border flows that led to extreme exchange rate volatility. A greater presence from China in the IMF would prevent the capture from key stakeholders, including for example recently manifested in unsustainable lending to Greece. China approach to international lending would prevent funding unsustainable budgets in exchange of reforms that too often end up occurring on paper but not in spirit. In particular, there is promise in China’s role in helping support conditionality in lending in exchange for multilateral trade openness at a time that rising trade tensions are raising the specter of generalized increase in protection. Being a supporter of global trade, global capital flows, being a force for tolerance about differences in political systems, means being a supporter of global peace, which will continue raise the standing of China globally. By representing ideas, the Chinese government can exert a global role in which it can successfully defend, and further develop, a system that lies at the core of its own success.

Chapter 88

China’s Public Policy Experience: Lessons, Developing Countries and the Future of the World Lloyd G. Adu Amoah

88.1 Introduction The emergence of China to global economic and political prominence in the last thirty years remains arguably one of the most remarkable examples of national socioeconomic transformation of a hitherto poor society. There exists broad consensus in the literature that China’s reform and opening up (gaige kaifang) policies, which took off in 1978, played a pivotal role in her transformation process. The socioeconomic indicators for China over the period attest to the momentous changes that have swept through the world’s most populous country in contemporary times. Explanations abound on how China turned the development corner so decisively. Some of these explanations include a neo-classical economic approach (encompassing institutional economics as well) marked by an emphasis on the role of the market mechanism, a focus on industrial strategy, and multi-disciplinary discourses. While these explanations provide valuable insights along different tracks into the developmental evolution of China, an egregious shortcoming is that the public policy formation value of China’s development empirics have not been effectively appropriated for the purpose of elaborating a theory of the policy process of relevance to the historical, socio-economic, and geo-political realities of developing polities. The aim of this work is to fill the lacuna in the public policy theory literature regarding the reflection of and sensitivity to the experiences and realities of developing countries. The experience of China which shares similar development circumstances historically (a compelling fact) with developing countries. Significant themes can be gleaned from China’s development process (in the last three decades) of potential conceptual value in crafting a developing world theory relevant to the policy process. My argument will be in three parts. First a review of the literature L. G. A. Amoah (B) Centre for Asian Studies, University of Ghana, Legon, Accra, Ghana e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_88

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on the theories of the policy process is undertaken. In the second part, the empirics of China’s development policy formation experience are discursively employed in bringing forward what we regard as some of the salient themes. In the last part, hints suggestions be provided for crafting a theory of the policy process of relevance for developing countries.

88.2 Public Policy Analysis and the American Connection Sabatier lays out succinctly a crucial distinction between public policy research and political science when he asserts that while political science is preoccupied with understanding the way political institutions operate and function, public policy research on the contrary concerns itself essentially with the impact of the actions and decisions of government as encapsulated in policy. In other words, political science with its inordinate focus on institutions such as the legislature, judiciary, local government, interest groups and the executive among others and with it the behavior, interests and preferences of the actors therein tends to lose sight of the broader policy environment and the key factors impinging upon it. In making such a distinction, Sabatier goes on to make a compelling case for, as he terms it, “reasonably clear, generalizable, and empirically verified theories of the policy process” (1991: 145). The overriding concern, therefore, is attempting to explain policy change over time across different policy arenas. That the United States has come to exert a decisive influence on policy analysis in modern times is a historical fact. In the United States, the emergence of public administration (the parent field of policy analysis) as a self-conscious discipline must be traced to the seminal writing of Wilson. Wilson highlights themes such as the linkages between politics and the bureaucracy, the facts—value distinction and the nature of public administration, which have occupied key positions in the work of successive generations of public administration scholars. The American influence on public policy analysis must be linked to the emergence of evaluation studies (after the debacle of the Great Society and War on Poverty programmes of the Lyndon Johnson era of the 1960s) as an attempt to better understand the impact of public policies. Concurrent with and subsequent to this development, various American scholars have tended to focus their work on various stages of the stylized policy process (referred to in the literature as the stages heuristic) viz agenda setting, policy formulation, policy implementation, policy evaluation, policy change and policy termination. The dominance of this approach has arguably held sway throughout the last quarter of the twentieth century. It is this segmentation of the policy process which triggered the search by some public policy scholars for overarching and generalizable theories of the policy process.

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88.3 The Search for Theory Paul Sabatier, an American scholar, was one of the leading public policy scholars who made a robust case for the necessity of developing theories of the policy process. His reasons for making such a call were two fold. Firstly, Sabatier argued that existing attempts at theorizing about the policy process while useful and significant, had proved inadequate in offering holistic, logically consistent and empirically verifiable explanations of why policies change at all. In this regard he critiqued the stages heuristic, which he considered the “dominant paradigm,” essentially because it was not a causal theory. Secondly, Sabatier argued that the stages heuristic failed to account for longitudinal change in policy over a period of a least a decade and across different policy arenas and ignored pertinent policy concepts such the role of policy elites and technical information in policy formation. In effect the stage of heuristic had overstayed its welcome. The public policy research arena has therefore been witness to attempts to craft new public policy theories in the last two decades. Theories of the policy process such as the Advocacy Coalition Framework (ACF), Institutional Analysis and Development (IAD) Framework, Multiple Streams (MS) Framework, Social Construction Framework (developed by Helen Ingram and Anne Schneider) and Punctuated-Equilibrium Theory (developed by Frank Baumgartner and Bryan D. Jones) arguably remain, in contemporary times, exemplars of the dominant paradigms in the field. We will not be detained unduly in this work by providing a detailed discourse on the central themes of these theories. Suffice it to say that, for our purposes, the key concern is the fact that these theories share in common two progenitors: American environment and Western philosophical assumptions about human behavior and socio-economic and political organization. The American environment is construed here as the inescapable historical, socio-economic, political, and cultural context informing and within which such theories were developed. The ACF, for example, is developed from extensive research on environmental issues in California in particular and in the U.S. in general. John Kingdon’s MS is the product of research on the American health and transport sectors. For Ingram and Schneider, their constructivist framework of policy formation is played out in interactions between policymakers and target populations which include flag burners, cultural elites, and the moral majority. In other words, a decidedly American reality and experience suffuses such theories and brings to the fore the difficult to ignore and critical question of the generalizability of such theories. It is worth stating that the preceding discourse highlights the importance of context specific theorizing about public policy and the limitations of universalist pretentions. In that sense Ingram and Schneider’s flag burners need not be a public policy issue in say Vietnam or Ghana. This challenge had been brought to the attention of American scholars by their European and as well fellow North American counterparts. Grace Stogstad (419), in a perspicacious article, notes the American theoretical contribution to public policy analysis internationally but adds, correctly, that “nonetheless, the extent to which theories and models are portable across institutional, ideological, cultural, social and economic boundaries is an important question.” Stella Theodoulou, for her part,

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expresses disquiet about the American connection of such theories and the absence of European policy ideas in American policy discourse even though American and European policy analyses have tended to develop contemporaneously. Sabatier’s response to such critiques was to allow room for the articulation of a European public policy process theory in his last major work and to modify the ACF to account for policy formation along a pluralist-corporatist-authoritarian continuum. That the theories referred to above reflect deeply held Western philosophical tenets about human behavior is not an accident nor does one need to dwell on this point. A pertinent question, however, has to do with how notions such as bounded rationality, pluralism and methodological individualism will fit in circumstances that have a different interpretation of such concepts or do not consider them as central. Skogstad underscores this point when she avers that “the merits of a host of policy “theories” on offer are contingent on a host of factors. Not least of these factors is the alignment of the theory’s premises with the configuration of the society, economy, and polity under consideration.” It is this misalignment of some of the core assumptions of this menu of theories with the socio-economic, politico-cultural, and historical conditions and realities of developing polities which needs to be urgently addressed.

88.4 China’s Empirics China’s emergence in contemporary times, given its challenges in the first half of the twentieth century cannot be glossed over. Lester R. Brown of the Earth Policy Institute of Columbia University underscores the point when states that: “China is no longer just a developing nation. It is an emerging economic superpower, one that is writing economic history.” For Lee Kuan Yew “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.” China has been able to pull over eight hundred million people out of absolute poverty in a generation. In a sense, therefore, it must be added that China is making public policy history and not just economic history. China must have been getting its public policy formation processes and philosophy right to have attained such outcomes. On this basis, therefore, the enquiry at hand seeks to delineate through an analysis of primary and secondary sources of information on China’s policy experience, some of the key elements that in our estimation have driven policy change across various sectors in the last thirty years. Policy formation in China seems to reserve for the state a prominent and significant role. The state therefore has a visible and robust presence along the policy chain. This role is safeguarded legally under the first chapter of the Chinese Constitution and the Marxist-Leninist derived principles of state organization. But beyond the ideological puritanism, it is arguable that the Chinese state in its public policy role is cast in the mold of a developmental state. The implication here is that while the allocative utility of the market is recognized, the state reserves the right to intervene

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on an “as and when” basis along the policy chain. In other words, the market is not considered supreme but useful. The role of the Chinese state in the energy sector is illustrative of the latest point. We argue that the Chinese’s state’s behavior in a crucial sector such as the energy sector provides vital signals for its possible conduct in other sectors. By 1997, China had become officially a net importer of oil signaling the growing importance of sources of energy to a hyperactive Chinese economy. As a consequence, the vital importance of securing sources of energy both locally and internationally has become critical for China’s national, economic, and social security. The place of the Chinese state in this connection is instructive to the extent that it plays a central role in the China energy policy formation process from the agenda setting stage to the termination stage. China has marshaled the force of her diplomatic arsenal worldwide in a bid to guarantee her supply of oil and gas globally. Deploying oil diplomacy, the Chinese state ensures that its National Oil Companies (NOCs) viz China National Petroleum Corporation (CNPC), China National Offshore Oil Corporation (CNOOC) and China Chemical and Petroleum Corporation (SINOPEC) secure and maintain vital access to lucrative and adequate oil and gas sources especially through equity oil. Through the National Development and Reform Commission’s (NDRC) Office of the National Energy Leading Group, the agenda for China’s energy policy which is strategic in scope and character is set. This strategy is two-pronged: safeguarding China’s energy supplies by reducing reliance on shipments via the Malacca Straits and limiting her dependence on supplies from especially Western oil majors on the international oil market. Thus, in a significant sense, China’s energy policy is not merely driven by profitability but by broader geo-strategic concerns that underlie Chinese policymakers’ view of China’s place in the world. This point leads us to the place of strategy in policy formation in China. The illustration above points to the strategic concerns of China’s policy makers in the energy sector. It is our considered view that the strategy theme runs through other policy sectors as well and has been a key concern for contemporary China’s development historically. The literature on strategy is vast and dense. Suffice it to state here that in the literature it appears that it is through the strategy discourses of business management writers that the public sector began to take this concept seriously. This led to the emergence of strategic planning (initially in the U.S. and Europe in the 1960s via the Planning, Programming, and Budgeting System [PPBS]) in public policy formation which Mintzberg excoriated. For Mintzberg, strategy is a distinct process from planning (which is rather a vital aid to its formation) and encompasses the four concepts of plan, pattern, position, and perspective. Following Mintzberg, strategy in this work is construed as a pattern of flexible decisions and actions undergirded by a clearly articulated world view aimed at meeting specific goals within a given time frame to ultimately gain a position of relative competitive advantage. China’s development experience reflects unmistakably a fixation with strategy as construed here. By the 1950s, with the collaboration of the Soviets, China focused on “the establishment of a mechanism to increase saving and investment” and “effective policies to allocate that investment (including the creation of institutions that could

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be used to make allocation decisions).” China’s strategists had recognized the importance of savings and investments (essentially generated internally) and linked these to future policy objectives. In this regard the 1950s saw the introduction of the First Five Year Development plan characterized by a top priority focus on 156 projects which produced rapid results in less than four years. By this strategic maneuver, the basis for China’s industrialization and subsequent emergence as a global economic powerhouse in the future was laid. In tandem with this was a focus on human capital development. Naughton phrases this lucidly: “the investment in human capital was in some ways, even more important. It was characteristic of the 1950s that large scale investment in physical capital was accompanied by large-scale creation of institutions to develop human capital. Networks of key point universities and research institutes were founded, and there was widespread establishment of training and vocational schools” adds: The really striking thing about the development of human capital during this period was how pervasive it was. Skills were being developed simultaneously at nearly every level of expertise, and nearly through all available channels. Training of scientists and administrators was matched with training of workers and technicians; knowledge was transmitted through blueprints and designs as well as training and on site advisers.

The opening up and reform (gaige kaifang) phase must therefore be seen along a continuum of perspicacious, visionary strategic moves based on a close reading of global economic, financial, political, industrial, and technological trends. It was therefore essentially true to Chinese policy formation’s blueprint that Deng Xiaoping visited Singapore and other countries, set up the Special Economic Zones and opened up the Chinese economy to defined areas of foreign direct investment. The Jiang Zemin era’s focus on China’s scientific competitiveness globally which continued under Hu Jintao’s leadership but with a focus on social harmony and sustainable development embodied in the Scientific Outlook on Development (kexue fazhan guan) idea and currently Xi Jinping Thought reflect a Chinese policy formation process that is strategically focused and yet flexible. To these themes in China’s policy formation practice and experience, must be added ideational independence and innovativeness. Ideational independence here is understood to mean that in crafting her policies China does not operate on the dubious assumption that the concepts embodied in the experiences emerging out of other countries would necessarily fit and work for China. China learns from the experience of other countries but does so on her terms and on the basis of her concrete historical, socio-political, and cultural realities. The term “market economy with socialist characteristics” (shehuizhuyi tese de shichang jingji) which the Chinese use in describing their economic and social organization underscores this point. This ideational independence is demonstrated eloquently in China’s relationship with the World Bank (WB) during the reform period. As the World Bank itself asserts, its relations with China “given China’s financial circumstances and its appropriate development program,” “aims to be a client-driven knowledge” one. The relationship of China to the World Bank formally began when China’s representation on the Boards of both the International Monetary Fund (IMF) and the WB was moved

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from Taipei to Beijing in 1980. Bottelier informs us that by the late 1990s, China’s interactions with the WB had effectively diminished marked by selective support in areas such as “technical, institutional and conceptual innovations in development”. Clearly in sharp contrast to the situation in which the World Bank tended to foist its neoliberal market economics programmes on developing countries, China fitted its interactions with the WB within her own development agenda. Bottelier underscores the previous point when he argues that: the Bank was seen as a valuable source of technical advice, relevant international experience and information on how other countries had succeeded or failed in their development efforts. The Bank was cast in the role of a guide (emphasis mine).

Not in the role of master as the case tended to be in other developing polities. In any case China “knew what it wanted from the Bank”: technical support and financial aid and not magisterial prescriptions on how to organize its society and economy. In its policy formation China has also shown inventiveness that defies established orthodoxies especially from the West. As a consequence, China’s development policy has thus been characterized in the literature as “crossing the river by feeling for the stones” (mozhe shitou guohe). An illustrative case in point is found in China’s public sector reforms initiated by Deng Xiaoping in the 1980s. Li writes that “the China case of transforming government behavior is dramatic and defies conventional explanation.” For example, one policy instrument used was mandatory retirement based on age and education to get rid of redundant staff (and hence reduce public sector expenditures) and improve efficiency and effectiveness. While this is more or less a universal practice in most public sector reform efforts in the Chinese case, senior officers who had retired (lixiu) were allowed access to classified documents and utilization of official perks such as cars and residences. Also, government agencies were allowed to set up business firms which could employ retiring officials; this switch from the bureaucracy to the corporate world was labeled “leaping into the sea” (xiahai). By this uniquely Chinese improvisation support for reforms from bureaucrats was safeguarded and possible social dislocation from such layoffs prevented. It has been argued (by no means exhaustively) above that China’s policy empirics provide some key themes of conceptual utility that ought to be considered in the policy formation mechanics of developing countries. It is true that these themes may not be unique to China’s experience. It is also true that the limits of the universality of these themes need to be taken into full account. However, the inescapable reality of a low income, underdeveloped China emerging to global influence makes her policy formation imperatives foolish to ignore for other developing countries.

88.5 Conclusion The aim of this paper has been to draw attention to the policy formation value of China’s on the whole successful development experience. Such a call is firstly deemed

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vital given the fact that explications on China’s emergence have tended to ignore policy formation issues as such. Secondly, the virtual absence of policy theories which capture the concrete conditions of developing countries in the literature and the endemic state of underdevelopment of such countries make the need to draw attention to the ideas and concepts of China’s (at one time the most populous developing nation on the globe) policy formation practice and experience crucial. In essence, therefore, this work has attempted to make a case for the development of public policy theories inspired by the empirics of one of the most (if not the most) successful developing countries in history. The themes enumerated can be conceptually developed and offer critical ingredient for public policy theorizing relevant to the realities of the developing world. This is critical for a future world of shared prosperity and greater equity.

Chapter 89

The Historical Process of China and Economic Globalization Ahmid Lawal

This paper will discuss the history of globalization in China, including the economic, social, cultural influences that have been integrated into Chinese society.

89.1 Han Dynasty The first historical instance of China engaging in internationalism was during the Han Dynasty. The Han Dynasty was the second imperial dynasty of China (206 BC– 220 AD). At the start of the Han Dynasty, the Huns in the north were attacking the frontiers of Han and trying to obtain riches. Emperor Wu of Han wanted to gain an alliance with a country called Dayuezhi so the two countries could join together and fight against the Huns. To obtain this alliance, Emperor Wu sent Zhang Qian to the West to establish economic and cultural connections. History records that during the Han Dynasty there were four primary avenues of contact between China and Europe. They included the northern land route, the central land route, the southern sea route, and the far southern sea route. The most famous of these routes is the central land route, or the classical Silk Road, comprising a network of roads stretching from northwest China to the ports of Syria and the Black Sea, which passed through the oasis of the Turkestans and Northern Persia. The Silk Road was significant for Chinese emperors because it provided dominance over Central Asia by developing resources and provided new markets for the export of China’s most valuable resources.

A. Lawal (B) Blueprint Newspapers Ltd, Abuja, Nigeria e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_89

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89.2 Tang Dynasty The Tang Dynasty (618–907 CE) is regularly cited as the greatest imperial dynasty in ancient Chinese history. It was a golden age of reform and cultural advancement, which lay the groundwork for policies which are still observed in China today. During the Tang Dynasty there was a new age of urbanization and increased maritime commerce. For instance, Chang’an, the capital of the Dynasty, developed into one of the largest cities during that time. By 742 CE, the population had reached almost two million and census showed that 5000 foreigners lived in the city: Turks, Iranians, Indians, and others from along the road. Trade continued to flourish during this period and brought an increased number of foreigners, foreign religions, and foreign ideas in China.

89.3 Song Dynasty The Song Dynasty (960–1279) was a period of technological advances, great prosperity, population growth, and exploration, along with much warfare. The Song Dynasty transformed the focus of the Silk Road from the reliance on domestic trade to a reliance on Pacific Orientation. Trade was now supported by a large merchant marine and defended by an imperial navy and long distance routes to the Middle East, India and the coast of Africa were now more readily available. During this period, the government started to heavily regulate foreign trade due to military threats on the Northern border. In order to monitor the flow of commodities in international trade, the Bureau of Merchant Shipping was established to tax merchant ships passing through. In addition, international trade became less focused on cultural exchanges and instead was seen as a necessity for the growth of the Chinese economy.

89.4 20th Century China China’s efforts to balance the economic and socio-political tasks of education in its modern nation-building can be traced back to the struggles of the late Qing dynasty, under threat of foreign aggression for modernization and national survival. This dilemma has persisted through the establishment of the Republic of China (1912– 1949) and the People’s Republic of China, and onto that of the successors and into the modern day. Older societies have had to overhaul their institutions and world views radically in order to conform with the models of the modern nation state system, with post1949 China being the time that this reordering took place within China. After 1989, the Chinese government instituted a number of reforms that were meant to increase economic growth while at the same time stifling the proliferation of democratic

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sentiments in their country. To the Communist Party of China, democracy leads to political instability which in turn impedes economic development and this is a sentiment believed by many people inside China. In 1989 China’s population was the largest in the world but its GDP was only ninth in the world, yet 25 years later China’s economy has become the second largest after only the U.S. This major increase in economic development was not without a cost because although economic reform and globalization had brought China unprecedented wealth it also brought China a monstrous increase in carbon dioxide emissions.

89.5 21st Century China Since 2005, China has spent more than $56 billion in sub-Saharan Africa, with significant investment in oil, platinum, copper, nickel, and manganese as well as other extracting industries. China’s bilateral trade with African countries rose from $10 billion in 2000 to $125 billion in 2010 and stands to reach $300 billion by 2015, surpassing the United States as Africa’s largest trading partner. China’s trade with Latin America has also increased dramatically, rising to 1,500% between 2000 and 2010 through loans and direct foreign investment. China is one of the primary winners of the Western sanctions against Iran, as it has allowed them to become its top trading partner, purchasing 400,000 barrels of oil per day all paid for with the yuan in an attempt to elevate the global standing of the yuan against the U.S. dollar. Chinese integration into the global financial system has taken its first steps by way of the launch of the “Shanghai-Hong Kong Stock Connect” and “Shenzhen-Hong Kong Stock Connect.” The implications of an increase in Chinese integration into the global financial system are many, with positives and negatives for both the Chinese and the Western world. In Hong Kong there have been a number of political battles due to a feeling that with the increase of globalization came an increase of “Chinaization.” Expanding global commerce and the corporate control of the political process weakens the autonomy and power of local communities, which is what Jihad vs. McWorld argues. The more integrated communities become with Chinese mainland, the more prosperity they receive, but most of the advantages go to the various business tycoons and corporate elites, which can be seen as an example of the rise in income inequality in China. Since 1980, China has undergone a series of reform policies aimed at transforming its economic system from a planned economy to a market-oriented economy by combining the planning economic systems from socialism with a market mechanism from capitalism. Along with this shift came the creation of four Special Economic Zones, areas of the country that are affected by favorable business laws aimed at increasing trade, investment, and job creation. This was spearheaded by Deng Xiaoping who set out to create a more economically open China, with the results of this new liberalization and globalization of the economy being substantial. During the

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period of 1978 to 2012, China’s GDP grew about 9.8% annually and its GDP volume increased 22.5 times, while its GDP per capita grew at an annual rate of 8.5% and increased 15 times in the same period. By 2010, China surpassed Japan to become the world’s second-largest economy and at the same time it also surpassed Germany in terms of export volume, becoming the largest in the world. The massive increase of GDP in China has led to an increase of living standards for the Chinese since their incomes have doubled or even quadrupled every 10 years. Amid this economic outburst, the income distribution in China has increased dramatically, changing China from a relatively equal socialist country to a very unequal country. The economic globalization of China has transformed the nature of its national policy preferences, calling into question for the rest of the world what their true intentions might very well be. The efforts to increase the liberalization of the Chinese economy, spearheaded by the U.S., were met with mixed feelings due to China’s rapid economic progress. The bittersweet nature of China’s rise in economic power leads to questions about whether or not it will support the existing international order of things or challenge it. The undervalued Chinese yuan with respect to the US dollar has brought about questions to whether or not a move to a more flexible exchange rate would be beneficial to the Chinese economy, with most experts arguing that no dramatic change in exchange rate is needed and that the most needed policy attention is the domestic financial sector, not the international.

89.6 Cultural Shifts The Chinese desire for globalization is countered by the fear of losing their own culture, identity, and history, meaning that the suspicions towards the English language seeping into Chinese (and worldwide) cultures might be justified, if even to a small degree. English has been seen as a new form of opium to some which indicates a growing hostility towards English in China but at the same time raises questions due to English being the predominate language for international trade and communication. China faces an unprecedented multitude of problems with regard to language choice and linguistic identity, some of which are due to challenges imposed the outside world. Although English was denounced as a language for the Bourgeoisie and imperialist during the Cultural Revolution, it is viewed as a necessary tool in China’s modernization and integration with the world. In the 1990s municipal planners in a major port of China, Dalian, sought to make the city a regional hub for trade, finance, and tourism, attempting to make the city a “Hong Kong of the North.”

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Suggested Reading Killion, U. (2006), A Modern Chinese Journey to the West, New York: Nova Science Publishers, Inc. Wild, O. (1992), The Silk road, retrieved from “Archived copy”, archived from the original on 2016-03-15, retrieved 2016-03-15. G. Veeck, C. Pannell, C. Smith and Y. Huang, “China’s Geography: Rowman and Littlefield,” Lanham MD, 2007. Duara, Prasenjit (2008), “History and Globalization in China’s Long Twentieth Century,” Modern China. O’Mahoney, Joseph; Wang, Zheng (Fall 2014), “China’s 1989 Choice: the Paradox of Seeking Wealth and Democracy,” Wilson Quarterly, retrieved 2015-12-09. “China: Empire Building in the Age of Globalization - The Globalist,” The Globalist, 2013-04-17, retrieved 2015-12-09. Warner, “‘Globalisation 2.0’ - the revolution that will change the world,” Telegraph.co.uk, retrieved 2015-12-09. Wang, Zheng, “China’s New Identity Crisis,” TIME.com, retrieved 2015-12-09. Shen, Qianqi (2017), “Planning Special Economic Zones in China,” The Routledge Companion to Planning in the Global South, Routledge, pp. 104–114. Xue, JinJun; Chuliang, Luo; Shi, Li (2014), “Globalization, Liberalization andIncome Inequality: The Case of China,” Singapore Economic Review. Liang, Wei (2007), “China: Globalization and the Emergence of a New Status Quo Power?,” Asian Perspectives. Bowles, Paul (2007), “Review of Economic Growth, Transition and Globalization in China,” The China Journal. Zhao, Yong (2007), “Reviewed Work: English and Globalization: Perspectives from Hong Kong and Chinese mainland,” Language in Society, 36 (2). doi:https://doi.org/10.1017/s00474045072 30131. Jin, Liu (2012), Chinese Under Globalization: Emerging Trends in Language Use in China, Singapore: World Scientific Publishing Company. pp. 204–205.

Chapter 90

A View of the Politico-Economic Relationships Between the Western Balkans and the People’s Republic of China Milos Djindjic

90.1 Introduction The countries of the Western Balkan (WB) region have been in the process of joining the European Union (EU) for over a decade. As a result of the will of the political elites to drive these countries towards the current economic and political environment of the EU, several administrative, structural, and economic reforms are underway, although the countries have individually reached different stages of the EU accession process. At the same time, these countries are pursuing more global economic and political strategies by building or maintaining relations with other international actors (states, international and financial organizations) for their own development goals. One of the international players that has been gaining a presence in the region, mostly through infrastructure and development work in cooperation with WB countries, is the People’s Republic of China (PRC). In this paper the author explains why these countries seek assistance from the PRC or find development cooperation appealing, and whether and how this cooperation relates to the expressed policy goals of the governments in the region towards the EU accession. The paper first sets the context by providing some brief information on the scope of relations between the WB and the PRC. It then touches upon reasons behind the intensified relations for the WB countries. The paper then interprets the outcomes and the possible results, intended or not, of the intensified WB- PRC cooperation, before finally providing a perspective on how it interplays with WB-EU relations.

M. Djindjic (B) European Policy Centre, Brussels, Belgium e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_90

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90.2 Growing Relations with the WB Region The PRC has been recognized as the rising economic player in the WB region, as “the financial and economic links between China and the Western Balkan countries have intensified significantly since 2015.”1 At the policy level, some of the practical realizations of these links have been bilateral trade agreements with WB countries, including Albania, Montenegro, and Serbia2 ; relations with Serbia are seen as the most advanced, due to the strategic partnership agreements concluded between the respective governments.3 Notwithstanding individual countries’ experience, some authors argue that in slightly more than a decade, the PRC has reached the top of foreign investors’ lists in these countries,4 owing to the development projects, mostly in the field of infrastructure, carried out through direct lending to WB governments.5 Meanwhile, the EU remains the leading trade partner for all the WB countries, accounting for more than 70% of total trade for the WB region, increasing its export to the EU by 130% in the course of a decade.6 And although bilateral trade between the PRC and the WB region is growing to a certain extent, it still only represents a small part of the overall trade (import and export) for the WB countries, most of which are facing a trade deficit with the PRC.7 Overall, however, it could be said that within a decade there has been a major activation of the PRC in the WB region, mostly in economic terms: between 2007 and 2017, infrastructure projects amounted “to roughly e12.2 billion in loans for 16 Central and South-Eastern European countries” and the WB countries “accounted for the majority of funds: 29.4% alone was earmarked for projects in Serbia, 20.7% for Bosnia and Herzegovina and 7.4% for Montenegro.”8 Although there have been initiatives and exchanges in other areas, such as those of culture or people-to-people relations, economic ties have become predominant, evident mostly in the PRC’s

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Mariya Hake and Alice Radzyner, Western Balkans: Growing Economic Ties with Turkey, Russia and China, BOFIT Policy Brief, 2019 No. 1, p. 8. 2 Ibid. 3 Dragan Pavli´ cevi´c, The Sino-Serbian Strategic Partnership in a Sino-EU Relationship Context, China Policy Institute, The University of Nottingham, April 2011. 4 Mariya Hake and Alice Radzyner, Western Balkans: Growing Economic Ties with Turkey, Russia and China, BOFIT Policy Brief, 2019 No. 1, p 9. 5 Plamen Tonchev, China’s Road: into the Western Balkans, European Union Institute for Security Studies (EUISS), February 2017, p. 2. 6 https://ec.europa.eu/trade/policy/countries-and-regions/regions/western-balkans/. 7 Milan Igrutinovic, Milos Janjic, Strahinja Subotic, Chinese Strategy in the Western Balkans, How Can the EU and the Western Balkan Countries Address the Political and Economic Impact of China’s Involvement in the Region? WeBuildEurope THINK Initiative GmbH, 2019, p. 57. 8 Wolfgang Petritsch, Philipp Freund, External Actors and European Integration in the Western Balkans, Focus on European Economic Integration Q3/18, p. 62.

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financing of infrastructure, but also in an interest in the energy sector in these countries.9

90.3 The Reasons Behind and Importance of the Connection with the WB Region In order to explain the reasons behind the intensified ties between the PRC and the region, two initiatives must be considered: the Belt and Road Initiative (BRI) and the Cooperation between China and Central and Eastern European Countries, through the so-called “17 + 1 format”. While the aim of the former is “constructing a network of energy, trade and transport infrastructure connecting Asia, Africa and Europe,”10 the latter, the “17 + 1 format,” represents a regional initiative, including both EU and non-EU countries, as a way of coordinating projects and exchanges to ensure interconnectivity between the PRC and European countries,11 given that Europe constitutes one part of the globally traced BRI route. In that sense, from the perspective of BRI, the WB region represents one of the priority geo-economic areas in the overall initiative as it directly connects with the EU market. Furthermore, some authors even argue that the PRC’s approach to the WB goes hand in hand with the connectivity agenda of the EU,12 and that this approach through the BRI, is potentially a motivation for the EU to “step up its engagement” in the region.13 It has also been stated that the increased engagement of the PRC in the region has been welcomed by local WB governments, as it fills the gap of missing inflow of capital for development.14 Furthermore, it is believed that the “Western Balkans is an important transit route for Chinese goods arriving in Europe”, as it has connections with the Greek port of Piraeus (whose facilities have undergone large amount of investments by the companies from the PRC) and therefore providing an additional approach to the EU.15 9

Milan Igrutinovic, Milos Janjic, Strahinja Subotic, Chinese Strategy in the Western Balkans, How Can the EU and the Western Balkan Countries Address the Political and Economic Impact of China’s Involvement in the Region? WeBuildEurope THINK Initiative GmbH, 2019, p. 56. 10 Wolfgang Petritsch, Philipp Freund, External Actors and European Integration in the Western Balkans, Focus on European Economic Integration Q3/18, p. 62. 11 http://www.china-ceec.org/eng/zdogjhz_1/t1575579.htm. 12 This agenda aims at improving connectivity within the WB, and between WB and the EU, as a key factor for growth and jobs and benefits for the region’s economies and citizens. More at: https://ec.eur opa.eu/neighbourhood-enlargement/sites/near/files/connectivity-agenda-2018-sofia-summit.pdf. 13 Milan Igrutinovic, Milos Janjic, Strahinja Subotic, Chinese Strategy in the Western Balkans, How Can the EU and the Western Balkan Countries Address the Political and Economic Impact of China’s Involvement in the Region? WeBuildEurope THINK Initiative GmbH, 2019, p. 70. 14 Plamen Tonchev, China’s Road: into the Western Balkans, European Union Institute for Security Studies (EUISS), February 2017, p. 2. 15 Wolfgang Petritsch, Philipp Freund, External Actors and European Integration in the Western Balkans, Focus on European Economic Integration Q3/18, p. 62.

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However, in parallel to these more geo-economic reasons concerning the proximity and significance of the WB to the BRI pathways, there is a belief that purely economic factors, such as competitive prices or the adequate return on investments that the WB region offers, also play a role.16 Moreover, despite the notion that the connection with the WB region is more economic in nature, there is also an increase in the bilateral political cooperation as well “via the increased number of annual summits, diplomatic contacts, and discussions.”17

90.4 Outcomes and Potential Implications of the Growing Relations The current available literature shows that there are several points of view when one aims to assess the immediate as well as long-term outcomes and implications of these growing relations. This section gives a brief presentation of the most pertinent advantages and disadvantages of ever-closer ties between the WB region and the PRC, focusing largely on the economic aspect, transparency, as well as on the EU accession process of the WB countries. As mentioned earlier, one of the immediate benefits to the WB governments can be seen in the possibility of accessing financing for big investment projects which might not otherwise necessarily or easily available. This can in turn help them reach a certain degree of development and help their progress towards the EU.18 Besides, when it comes to immediate benefits for foreign investors, including companies from the PRC, it is believed they perceive the WB region as fruitful for investing and building a portfolio in developing European markets that are yet to be part of the EU and that are slowly aligning with its rules.19 In other words, the WB represents another link with the EU market for investment- oriented businesses from the PRC. However, from the other point of view, there are also implications that warn of potential adverse effects. Firstly, there has been growing skepticism over the ability of the WB countries to deal with amassed debts arising from access to loanbased investments, a situation that could lead to an increased and unsustainable level of debt and at least short-term debt dependency,20 especially in some countries in the region with already high levels of public debt (and debt to the PRC), such 16

Corporate China In Western Balkans. Seminar Report, prepared by: Cooperation and Development Institute—CDI, Tirana, June 2019., p. 5. 17 Milan Igrutinovic, Milos Janjic, Strahinja Subotic, Chinese Strategy in the Western Balkans, How Can the EU and the Western Balkan Countries Address the Political and Economic Impact of China’s Involvement in the Region? WeBuildEurope THINK Initiative GmbH, 2019, p. 4. 18 Mariya Hake and Alice Radzyner, Western Balkans: Growing Economic Ties with Turkey, Russia and China, BOFIT Policy Brief, 2019 No. 1, p 10. 19 Wolfgang Petritsch. Philipp Freund. External Actors and European Integration in the Western Balkans, Focus on European Economic Integration Q3/18, p. 62. 20 Mariya Hake and Alice Radzyner, Western Balkans: Growing Economic Ties with Turkey, Russia and China, BOFIT Policy Brief, 2019 No. 1, p. 11.

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as Montenegro.21 At the same time, it is argued that there are not many spill-over effects on WB economies, as the WB countries hardly use any of their own resources; implementation often relies on work, supplies and material coming from the PRC.22 Nevertheless, some of the most worrying remarks concern the implications for the WB’s EU accession process, which is the proclaimed strategic goal of these countries. They have assumed certain obligations under the framework of this accession process, as a result of agreements which have been concluded with the EU, and some of these countries are negotiating membership. Given that the WB countries have an openly declared political will to join the EU, and since significant amounts of resources have been invested to date on both sides in support of this process, it is no wonder that questions have been raised regarding the commitments of the WB countries, such as in areas of competition policy, state aid and the implementation of different social, economic, or environmental standards, especially vis-à-vis other actors’ involvement in their markets. Moreover, some of the latest polls on the region’s EU perspective suggest increased support of EU membership so the public opinion represents another aspect to be considered: according to the latest Balkan Barometer, support within the WB countries “continues to grow at an accelerated pace (from 49% in 2017 to 56% in 2018) making this the first survey instalment with more than half of all respondents viewing EU accession favorably.”23 Some say that there is in fact little reason for concern. In other words, the EU is foremost in terms of trade and foreign direct investments in the WB region,24 and there is observable complementarity instead of competition when comparing, in particular, the construction projects being carried out by the EU and the PRC.25 Nevertheless, from the perspective of the strategic direction towards the EU that the WB countries have taken it becomes important not to undermine EU accession processes of these countries since many reforms, including those on complying gradually with rules of the European single market, are ongoing. That said, some authors express concerns that externally financed investment projects in the WB can actually pose a threat to transparency and competition, as they are not necessarily under the framework of the clear regulations. In other words, as project contracts can based on interstate agreements, without requirements for fully-fledged procurements and bidding, decision makers in the WB region can lean

21

Milan Igrutinovic, Milos Janjic, Strahinja Subotic, Chinese Strategy in the Western Balkans, How Can the EU and the Western Balkan Countries Address the Political and Economic Impact of China’s Involvement in the Region? WeBuildEurope THINK Initiative GmbH, 2019, p. 31. 22 Mario Holzner, Monika Schwarzhappel, Infrastructure Investment in the Western Balkans: A First Analysis, Vienna Institute for International Economic Studies, the European Investment Bank, 2018, p. 16. 23 Balkan Barometer 2019, Public Opinion Analytical Report, Regional Cooperation Council, 2019, p. 36. 24 Mario Holzner, Monika Schwarzhappel, Infrastructure Investment in the Western Balkans: A First Analysis, Vienna Institute for International Economic Studies, the European Investment Bank, 2018, p. 15. 25 Ibid, p. 167.

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towards subcontracting based on purely political criteria.26 Recognizing the importance of such claims, however, it is also believed “they are not exclusively related to China’s projects but are also valid when it comes to the business practice with other foreign partners and are primarily rooted in domestic politics and preferences rather than in foreign influence.”27

90.5 Conclusion This paper begins with an overview of the recent rise in cooperation between the WB countries and the PRC. It goes on to discuss some of the factors that have led to what is mainly an ongoing increase in economic bilateral relations. Next, the paper sheds light on the benefits of this cooperation for both the WB countries and the PRC. It also discussed, using a selection of contemporary experts and policy literature, some of the crucial questions that have arisen in terms of the outcomes and effects on, for the most part, the WB countries. The main messages tend to focus on two different but related aspects: the impact on the economic development of the countries in the WB region; and the impact on the EU accession process of the entire WB. When it comes to the first aspect, many authors have reiterated that the financing from the PRC provides a “filling in the infrastructure gap,”28 which has enabled WB governments to focus more on development, at least to a certain extent. At the same time, concerns revolve around their ability to avoid potential roadblocks and keep out of the sovereign debt problem in the face of extensive borrowing, as well as around the possibility that they might rely more on resources at home in implementing investment projects for the benefit of local economies, without putting market competition at risk. With regard to the functioning of the market, the second aspect that frequently raises concerns relates to the EU accession process and the different requirements of the WB countries in this regard. Given that the WB “has also been immersed in the accession process throughout the past years,”29 it is of importance for them to adhere to all the principles of this process for the sake of its unhampered continuation. That said, while the EU remains the long-term strategic choice of the countries in the WB region, there is also an acknowledgement among some policy analysts that in reality the current, and future development of the WB countries “is to a large extent 26

Milan Igrutinovic, Milos Janjic, Strahinja Subotic, Chinese Strategy in the Western Balkans, How Can the EU and the Western Balkan Countries Address the Political and Economic Impact of China’s Involvement in the Region? WeBuildEurope THINK Initiative GmbH, 2019, p. 65. 27 Ibid, p. 65. 28 Experiences with Chinese Investment in the Western Balkans and the post-Soviet Space: Lessons for Central Europe? EU Frontier Policy Paper No. 16, edited by Łkasz A. Janulewicz, Center for European Neighborhood Studies, Central European University, 2018, p. 16. 29 Milan Igrutinovic, Milos Janjic, Strahinja Subotic, Chinese Strategy in the Western Balkans, How Can the EU and the Western Balkan Countries Address the Political and Economic Impact of China’s Involvement in the Region? WeBuildEurope THINK Initiative GmbH, 2019, p. 53.

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stimulated by the European Union and China,”30 which demonstrates the dynamic development environment of the WB region.

Suggested Reading 1. Mariya Hake and Alice Radzyner, Western Balkans: Growing economic Ties with Turkey, Russia and China, BOFIT Policy Brief, 2019 No. 1. 2. Milan Igrutinovic, Milos Janjic, Strahinja Subotic, Chinese Strategy in the Western Balkans, How Can the EU and the Western Balkan Countries Address the Political and Economic Impact of China’s Involvement in the Region? WeBuildEurope THINK Initiative GmbH, 2019. 3. Milan Igrutinovic, Milos Janjic, Strahinja Subotic, Chinese Strategy in the Western Balkans, How Can the EU and the Western Balkan Countries Address the Political and Economic Impact of China’s Involvement in the Region? WeBuildEurope THINK Initiative GmbH, 2019. 4. Plamen Tonchev. China’s Road: into the Western Balkans, European Union Institute for Security Studies (EUISS), February 2017. 5. Corporate China In Western Balkans, Seminar Report, prepared by Cooperation and Development Institute—CDI, Tirana, June 2019. 6. Wolfgang Petritsch, Philipp Freund, External Actors and European Integration in the Western Balkans, Focus on European Economic Integration Q3/18. 7. Dragan Pavli´cevi´c, The Sino-Serbian Strategic Partnership in a Sino-EU Relationship Context, China Policy Institute, The University of Nottingham, April 2011. 8. Alexandr Lagazzi, Michal Vít. Chinese Influence in the Western Balkans: An Annual Review, Policy Paper, EUROPEUM, March 2019. 9. Experiences with Chinese Investment in the Western Balkans and the post- Soviet space: Lessons for Central Europe? EU Frontier Policy Paper No. 16, edited by Łkasz A. Janulewicz, Center for European Neighborhood Studies, Central European University, 2018. 10. Mario Holzner, Monika Schwarzhappel, Infrastructure Investment in the Western Balkans: A First Analysis, Vienna Institute for International Economic Studies, the European Investment Bank, 2018. 11. Western Balkans, Infrastructure and Energy from a Geopolitical perspective, Conference Report, The Warsaw Institute Review, Poland, 2019. 12. Balkan Barometer 2019, Public Opinion Analytical Report, Regional Cooperation Council, 2019.

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Western Balkans, Infrastructure and Energy from a Geopolitical Perspective, Conference Report, The Warsaw Institute Review, Poland, 2019, p. 26.

Chapter 91

New Perspectives on China Going Global: Global Opinion Research on Perceptions of Chinese Companies Peter Thomas Zysk

91.1 Executive Summary Chinese businesses are expanding their operations and investments abroad at quickening pace. Brunswick Group’s survey of Chinese business leaders and the publics of 18 countries finds that perceptions of China’s global growth remain broadly positive, despite trade frictions with the US. We surveyed 7500 members of the general public across 18 countries where Chinese firms have significant investments and ambitions for growth. We also surveyed 300 senior leaders at Chinese companies that have either already expanded internationally or plan to do so soon. The rise of China’s investment in and engagement with nations along the Belt and Road is resulting in positive perceptions of Chinese business among the global public; respondents in partner countries voice many hopes about the impact of this investment, while recognizing some concerns over the political influence that may come with it. Meanwhile, the global public hold positive attitudes towards China’s innovation and technology boom. Challenges remain. With US-China trade tensions running high, American publics are divided in their outlook toward Chinese business. But this skepticism is largely contained to the US-China bilateral relationship; other markets aren’t yet pessimistic on Chinese investment. At the same time, global nationalism and protectionism are rising with no signs of abatement. There are various sticking points that need to be addressed if Chinese businesses are to realize their overseas growth ambitions. Prevailing media narratives color views of Chinese firms, leading to mixed perceptions. Meanwhile, limited engagement with

P. T. Zysk (B) Brunswick Group, London, United Kingdom e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_91

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local communities has resulted in publics that only learn toward trusting Chinese companies. There is substantial outbound momentum, and China appears to just be getting started. But Chinese firms undervalue the importance of communication, putting their global ambitions at risk. Firms need to better communicate their mission and core philosophy, fostering greater understanding of their goals and strategies, in order to thrive in the new contexts of trade friction, post-Brexit Europe and the shifting allegiances of the Belt and Road Initiative (BRI). Chinese business will inevitably take on a global leadership role as it participates more closely in this conversation. Yet a variety of barriers must be navigated in order for that leadership to be viewed favorably and with trust.

91.2 Key Findings 1. Global Ambitions Chinese business leaders see international expansion as a core pillar of their sustained growth. While they see opportunity for growing sales in the China market, they are also increasingly looking further afield, with nearly half (49%) reporting that exports and sales outside of China have become much more important in the past year. A mix of both Western markets and developing markets in Asia and elsewhere are perceived as grounds for expansion. 2. A Global Story, Told by Others Chinese companies are already global. Two-in-three (67%) of the global public have heard “some” or “a lot” about Chinese companies in the past year. However, only one in ten (12%) have seen information directly from Chinese companies. Instead, other voices are telling their story for them. Media reports, social media commentary, and word of mouth are the leading sources about Chinese companies globally. 3. “Brand China” is Strong but Poses Risks Chinese companies have a positive image globally, despite the high-profile trade dispute between the US and China. Three in four (74%) members of the global public have a positive opinion of Chinese companies, and one in three (32%) say their opinion is “very positive.” Global audiences tend to see Chinese companies through the lens of how they see China a link which risks opinions being formed about a company based on factors out of its control. 4. Nuanced Views Along the Belt, the Road, and in the West While global views of Chinese businesses are positive, outbound companies must be sensitive to nuanced regional views that carry unique reputational challenges. “Brand China” is strongest along the Maritime Silk Road, while Western nations

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(US, Europe) are more skeptical, with perceptions in Belt nations in between these two poles. South Asian nations and the Middle East report “very favorable” views toward Chinese firms at a much higher rate than in the US and European nations. 5. Emerging Leadership in Innovation Chinese businesses are recognized for their strong performance in innovation, an area of great promise that also carries risk. Four in five (82%) respondents globally say people in their country benefit from advancements created by innovative Chinese companies, yet over half (56%) say Chinese innovation is the result of illegal theft of intellectual property. 6. More Engagement Needed to Solidify Trust Earning and maintaining the trust of local communities is critical to successful global expansion. Two in three of global audiences (65%) and Chinese business leaders (63%) believe it is important for a Chinese company to be trusted where it operates locally. That trust seems to be forthcoming for the present, with three in four (74%) worldwide trusting these firms. But it is also fragile, with a perceived underperformance in environmental protection, employee treatment, transparency, and ethical conduct. 7. Say What You Do, and What You Stand For For a Chinese company to deepen support and trust, it needs to communicate its vision, values, and core beliefs to external audiences. And greater access to information creates deeper trust. Respondents who have seen “none” or only “a little” about Chinese companies over the past year have substantially less support and trust compared to those who have received “a lot” of information, among whom four in five are favorable toward (80%) and trust (83%) Chinese companies. 8. Partnership and Politics Along the Belt and Road The Belt and Road Initiative has become a crucial factor in shaping how Chinese business leaders are assessing future growth opportunities. Yet support for China as a financing partner of infrastructure and development partner varies along different parts of the Belt and Road. In many countries that see China as a top development partner, there is concern about the political influence that could come attached to financial assistance. 9. Great Power and Great Responsibility Global business leadership is not seen as a possibility for Chinese companies; it is seen as an eventuality. More than two in three worldwide (69%) and the majority of Chinese business leaders expect Chinese firms to become leaders in “most” or “many” global industries. More importantly, this impact is expected to be beneficial, with over two thirds (68%) expecting Chinese companies to have a positive impact on the lives of people across the globe.

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91.3 Detailed Findings 1. New Horizons for China’s Outbound Expansion As China’s economy continues to cool after decades of explosive development, more businesses are looking abroad for growth opportunities. This is a long- term trend that is changing the global business landscape, with implications for business owners, investors, workers, and consumers alike. Expansion abroad is generally acknowledged by Chinese business leaders as necessary. Among priorities ranked “extremely important” by Chinese business leaders, exports, and sales outside of China (48%) and overseas M&A (42%) are prioritized, with 49% and 41% reporting that these channels respectively have become much more important in the past year. The future, for many Chinese companies, is increasingly out of China. Attitudes held strong in the context of China’s ongoing trade dispute with the US. We find that trade tensions have not deterred business leaders from seeing great potential in the US market, with the highest proportion (35%) responding that the US presents the most opportunity for their business, compared to other nations. The scope of China’s global ambition is also widening, to include a mix of developed Western markets, its neighbors in Asia, and other developing economies. Beyond the US, business leaders look to Southeast Asia (30%), East Asia (22%), Australia (21%) and the UK (20%) as top growth opportunities. 2. Optimistic Views of Business Opportunity, With Strong Regional Variation Nearly every country surveyed has a mostly favorable view of China’s overseas push. Among the global public, three in four (74%) have a positive opinion of Chinese companies, and one-in-three (32%) say their opinion is “very positive.” Publics in the US and Czech Republic are the lone exceptions, and even in these markets, perceptions are split between positivity and negativity (47% and 49% favorable, respectively). Uncertainties over US-China trade disputes still dominate American views of the future trade and business relationship. Our survey shows that positivity towards China’s global expansion is particularly strong in counties positioned along China’s flagship Belt and Road Initiative, especially as contrasted to Western countries. Broadly speaking, markets on the 21st Century Maritime Silk Road (Southeast and South Asia, extending to the Middle East and Eastern Africa) have the most positive view of Chinese companies, while Western nations are more skeptical. Markets along the Silk Road Economic Belt (Central Asia, Eurasia, and Eastern Europe) are in between these two poles: positive, but not so much so as in Road nations. For example, in our survey general populations in countries in South Asia and the Middle East, and in Africa, were more than twice as likely to say they are “very favorable” toward Chinese firms (47% and 53% respectively) than the US, Europe, and Central Asia and Eastern Europe (13%, 15% and 20%). If the West is cool toward Chinese companies, and Road nations are warm, the Belt is tepid. Awareness of Chinese companies and their goals is another metric that varies regionally,

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with populations in Road markets reporting higher exposure to information than Belt nations and Western markets. When appraising their familiarity with Chinese business, Africa (74% familiar) and South Asia and the Middle East (76%) report the highest levels of familiarity, followed by Central Asia and Eastern Europe (60%), with Europe (40%) and the US (42%) in the rear. This may partially explain the positive views of Chinese expansion in Road nations, a correlation between information and trust that is a key finding of both this and our 2016 survey. 3. Getting the Message Across; Delinking Company from Country Local knowledge and exposure are the keys to a Chinese firm’s success abroad. Our survey shows there is substantially less support and trust for Chinese firms among general population respondents who have seen “none” or only “a little” over the past year, whereas four-in-five are favorable toward (83%) and trust (83%) Chinese companies among those who have received “a lot” of information about them. Opinions of Chinese companies are closely linked to opinions of China as a whole. This association is understandable, especially in Belt and Road markets where Chinese corporate expansion is being led by the Chinese government. Depending on the market, this can be an advantage or disadvantage. Globally, Chinese firms are not evaluated as positively by global publics as those from other countries, such as the UK, Japan, Germany, and France. This connection, however, risks the behavior of others, including the government, influencing opinion of Chinese companies. For Chinese companies to mitigate these effects, the means of communication are key. Chinese business leaders report using a wide variety of platforms to communicate with global audiences. Two in three (65%) use their corporate website, and more than half say they have used media interviews (54%), marketing and advertising (54%), and social media (52%) to disseminate their message to international stakeholders. Yet some of these channels do not seem to be effectively reaching their targets. While two thirds (67%) of global publics have heard “some” or “a lot” about Chinese companies in the past year, only one in ten (12%) have seen information directly from the companies. Instead, media reports (56%), social media commentary (48%), and word of mouth (35%) are their leading sources of information. Media engagement rises above the pack as an invaluable communication tool for Chinese firms. Global general population audiences rank media reports (52%) as the most trusted source of information about these companies, followed by academic research (35%), with information from Chinese companies (33%) coming third, an indication that they would welcome more active and direct communication from firms. Engaging with trusted media is also of critical importance. Chinese businesses would benefit from advice on how to shape their story, and support in getting that story to connect with global audiences. However, these business leaders do not adequately recognize the need for this type of support. In our survey they evaluated communications advisors as being the least important type of external advisor needed for successful international expansion. Yet communications consultants are important to help ensure the company’s message is on target and effective at advancing business goals.

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It is not just a question of how a company tells its story, but what that story is. Evaluating what kind of narrative most effectively drives support, nearly two in three (62%) of general population respondents say it begins with knowing what company does (products and/or services). Merely communicating about the core business alone, however, is not enough. There is a strong desire to hear about a company’s vision and values (48%), social impact initiatives and philosophy (42%), and core beliefs (42%). Respondents deem these to be more important than information about the company’s leaders (33%), employees (32%) and geographic footprint (30%). Most Chinese business leaders also recognize the importance of tapping into these themes when crafting their company’s narrative. They rank communicating their vision and values (53%) as being equally important to what they say about their products or services (52%). With alignment in the communications priorities of both ends, Chinese companies have room to develop their communications functions as they engage with a broader set of audiences, and the message of Chinese businesses as it goes global can be better framed to assuage local concerns. 4. Innovation Perceived to be Chinese Firms’ Strong Suit, But not without Risks Where are Chinese businesses perceived to be the strongest by international audiences? Innovation leads the way: nearly half of global respondents say Chinese companies are better than most at innovation (45% agree). They also see Chinese firms as having strong senior leadership and financial performance (36% agree for both), a signal of these companies’ emerging ascendance. Optimism over Chinese innovation is particularly strong. Four in five (82%) say that their country benefits from advancements created by innovative Chinese companies. Yet stakeholders are split over what they see as its driving force: equal proportions (roughly three in four) of general populations surveyed attribute Chinese innovation to: technology transfer from foreign firms operating in China; copying of existing models and products; and R&D and groundbreaking advancements developed by Chinese companies. Over half (56%), meanwhile, say Chinese innovation is the result of illegal theft of intellectual property. While strong performance in innovation is recognized, it is possible that Chinese companies are not getting enough credit for their contributions. China’s total spending on R&D was $254 billion in 2017, ranking it second in the world behind the US, and the gap is quickly closing.1 China has also been the world leader in patent applications for the past seven years, with 1.36 million patent applications filed in 2017.2 There seems to be some disconnect between the activities of Chinese companies and what is being communicated to the outside world.

1

https://www.sciencemag.org/news/2018/10/surging-rd-spending-china-narrows-gap-unitedstates. 2 https://www.telegraph.co.uk/news/world/china-watch/business/research-and-development-suc cess-in-china/.

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5. The Belt and Road Initiative: New Frontiers for China’s Global Push Launched by Chinese President Xi Jinping in an October 2013 speech, the Belt and Road Initiative has expanded the frontiers for China’s outwards investment and growth. The project encompasses 71 countries, that account for half the world’s population and a quarter of global GDP. According to the American Enterprise Institute, China has already invested more than $210 billion, with Chinese firms having secured more than $340bn in construction contracts along the Belt and Road.3 This is a sea change shared by Chinese firms: virtually every business leader says that the BRI is important in their business planning (95%) and that it will become even more important over the next five years (94%). But what are the nuances of how their business ambitions are perceived locally? Chinese companies are well regarded along the Belt and Road, but the outlook is not uniform. General publics in Africa, greater Asia and the West are divided over whether loans from Chinese companies help or hurt local populations. There is a strong preference for China’s development assistance in Africa (South Africa, Kenya, Nigeria), parts of Southeast and South Asia (Pakistan, Malaysia, Thailand), and Kazakhstan. Views are divided in Singapore, Indonesia, UAE, Hungary, and Ukraine. And there is skepticism of China as a development partner in India, Brazil, and the West (US, UK, Germany, Czech Republic). General publics in Malaysia and Pakistan say these loans hurt local populations due to the political influence attached to them. And those in South Africa, Nigeria, Kazakhstan, Hungary, UAE, UK, and US are divided over if these loans help or hurt. Many of the countries that see development assistance as helping to build necessary projects for local populations (Germany, Czech Republic, Ukraine, Singapore, India, and Brazil) are also less likely to see China as a preferred partner. Thailand and Kenya are the only countries whose general populations say financial assistance is helpful and see China as best positioned to provide this type of help. All in all, local populations along the Belt and Road, from Dhaka to Piraeus, are split between seeing the project as a harm or a benefit; the benefits are recognized, but so too is the political baggage that comes with investment. 6. Trust is a Valuable—and Fragile—Resource, Fostered by Closer Community Engagement Trust is a local resource as valuable as any other. Two thirds of both global audiences (65%) and Chinese business leaders (63%) believe in the critical importance of local trust for a Chinese company operating abroad. Is this trust forthcoming? According to our survey, Chinese companies are currently trusted to do the right thing, with three in four (74%) of worldwide publics trusting these firms –but this trust is fragile. Half (53%) say they only “somewhat trust” Chinese business to act 3

https://www.theguardian.com/cities/ng-interactive/2018/jul/30/what-china-belt-road-initiativesilk-road-explainer.

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in local interests. While few stakeholders are fully trusting, local communities are currently somewhat willing to give Chinese companies the benefit of the doubt. Such fragile trust appears to stem from perceived underperformance in community and external engagement. Global audiences say that ensuring a company is trusted by local communities (65%) is as important as delivering quality products and services (70%), and more important than growing profits and stock price (45%). They believe these companies are lagging in environmental protection (30%), employee treatment (26%), transparency (24%), and ethical conduct (23%) compared to most companies globally, and these perceived deficits stand in the way of deeper trust. Chinese business leaders are aware of some of these reputational challenges. They agree that Chinese firms underperform in areas that include environmental protection and transparency. But they do not fully recognize the vulnerabilities in how their firms are perceived: more than two in five surveyed believe Chinese companies are better than most globally in ethics (43%), communicating about business activities (46%), and explaining intent behind decisions (37%). Warranted or not, Chinese firms need to understand that opposite, sometimes negative, assumptions are often made about their conduct and business practices. 7. Shaping the Future Contours of Global Business Despite the communication challenges faced, more than two in three of worldwide publics expect Chinese companies to become leaders in “most” or “many” global industries (69%), and to have a positive impact on the lives of people across the globe (68%). Chinese business leaders are even more optimistic, with three quarters (76%) expecting Chinese firms to become global leaders, and virtually every business leader surveyed (95%) expecting them to have a positive impact. While respondents across all regions agree that Chinese business leadership will rise over time, there are key differences over their perceptions of the impact this will have for local communities. A strong majority of publics in Road nations believe Chinese firms will have a positive impact in foreign markets in 10 years (78% for South Asia and the Middle East; 82% for Africa), but only a minority in the West agrees (45% in the US; 49% in Europe), with those in the Belt nations caught between the two (61% in Central Asia and Eastern Europe). Chinese business is not just going global; it has already become global, expanding in the Belt and Road even as it consolidates its interests in the West. In this new era of China’s development, marked by disrupted growth models as much as by economic and geopolitical clout, our survey demonstrates a multiplicity of perspectives on and from Chinese companies brings both challenge and opportunity. It is an era of fresh uncertainty, but one that carries with it attendant possibility.

91.4 Recommendations Our research points to several concrete actions Chinese businesses can take to enhance their positions abroad. A failure to act on stakeholder engagement and

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communications can deepen distrust and create political and reputational risks that can damage a company’s social license to operate. Ensuring greater understanding of Chinese businesses among international audiences is key to creating more positive perceptions, and that cannot be done without more and better communication. Communications demonstrates transparency and plays a critical role in building trust for any company. If your company is operating internationally or planning on doing so, you should take the following steps to ensure your ambitions are achieved. . Understand the context: identify and understand the issues that impact your business in the local market. Opinion research can help to pinpoint expectations and concerns that need to be addressed. Anticipate concerns and develop a mitigation plan in advance rather than waiting until problems occur. . Identify your audience: understand key stakeholders and influencers for your business and their perceptions of you and your business. Mapping the goals and concerns of all who could have potential interests in your operations can help prevent an issue from becoming politicized and problematic. . Address perceived weaknesses: our research shows that Chinese firms are believed to perform poorly on transparency, corporate governance, sustainability, and community engagement. Being proactive about what your company is doing to demonstrate leadership in these areas will enhance your reputation. . Tell your corporate story: craft a clear story demonstrating your value and track record, tailored to resonate with key audiences. The value of your expansion needs to go beyond the financial rationale and explain the benefits to the local economy, employees, and society. Monitor sentiment carefully to strike the right tone and level of visibility. . Develop a communications plan: develop an engagement plan detailing when and how to engage with your stakeholders. Staying quiet will not keep you out of the news, and unwillingness to engage and answer questions can be a reputational liability. Scenario planning and crisis preparedness help if your business encounters difficulty. . Design communications materials: create compelling communications materials and websites designed to appeal to local and global audiences. Collateral about business operations should be translated into the local language and be of the same quality as leading global businesses. . Prepare and train: Prepare your company spokespeople to understand nuances of the local media, political and business landscape, and ready yourself for successful engagement with key stakeholders. . Engage the right stakeholders: build support for your business objectives in the local market by regularly engaging with relevant stakeholders (government, regulators, media, academics, etc.) who can influence perceptions of the company. . Educate political decision makers: ensure politicians have the proper understanding of your business and critical issues. Any delay to engage will increase risk that the communications vacuum is filled by other, more critical voices. Explaining

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how your company will help the local helps to insulate the company from hostile rhetoric. . Sustain engagement: Transparency builds trust. Senior leadership should have regular in-person meetings with key influencers to help avoid misperceptions. In-person contact puts a face to the organization and deepens understanding. . Evaluate: Conduct regular perception audits to assess stakeholder opinion of your company and evaluate progress of communications activities; findings should contribute to future communications objectives.

91.5 Research Methodology This report draws on survey research conducted among: . n = 300 Chinese Business Leaders: Executives and senior managers at Chinese businesses in China (private, public, and state-owned) that have already or are planning on expanding internationally. . n = 7500 Global Adults: Representative national samples were surveyed in each country. . US—n = 1000 . UK—n = 1000 . Germany—n = 1000 . Singapore—n = 300 . Thailand—n = 300 . Indonesia—n = 300 . Malaysia—n = 300 . India—n = 300 . Pakistan—n = 300 . UAE—n = 300 . South Africa—n = 300 . Nigeria—n = 300 . Kenya—n = 300 . Kazakhstan—n = 300 . Ukraine—n = 300 . Hungary—n = 300 . Czech Republic—n = 300 . Brazil—n = 300 When the global sample is analyzed in aggregate, the margin of error is ±1.13%. When analyzed at the country level, the margin of error is ±3.10% for the US, UK, and Germany, and ±5.66% for all other countries. The margin of error for the Chinese business leader sample is ±5.66%. All survey research was conducted online between October 8 and November 21, 2018.

Chapter 92

People’s Republic of China at 70: A View from the West End of Asia and East Beginning of Europe Yüksel Görmez

Over the 70 eventful years since its founding, the People’s Republic of China (PRC) has caught the attention of the world with its significant achievements, developing into an independent, prosperous, and strong country. Her children are pursuing the Chinese dream of the great rejuvenation of the Chinese nation to write a new chapter in history. What China did in the last 70 years is surely a key to understand the next century: From the Great Leap Forward to the Household Responsibility Act to Socialism with Chinese Characteristics, China has been the center of economic and political experimentation for hunting a welfare society. Let us put the result of experimentations to find the truth from the facts into a simpler context: Chinese macro-economic transformation and growth performance since the opening-up from the 1980s will be recorded in the economic history as an unprecedented miracle by all parameters. We are not only talking about taking a billion people out of the persistent risk of hunger and poverty or growing ten percent for more than three decades without any structural risk of high and volatile inflation. We will also not dig into deep how such a gigantic geographic space bigger than Europe managed to fund such a fast welfare enhancement without external debt accumulation. We will also not investigate miraculous urbanization. We will not describe how Guizhou enjoys the fruits of 21st Century architectural capacity of humanity to enjoy a much better life in the middle of a very difficult mountainous geography. As we will not address how come China managed to complete a highway and railway network, which looks like metro maps of globally important cities such as New York, London or Tokyo when drawn in a nationwide scale. Will we write about the transformation of schools and hospital into this massive change in the way of daily life for average citizen? No. We will not mention how millions of Chinese Y. Görmez (B) Central Bank of Turkey, Ankara, Turkey e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_92

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students went abroad or how many foreign students came to China to look for new capabilities to cement their readiness for the future. What is the reason for this preference? Why do we miss out so many hot topics in such a critical time? Why don’t we just place nice words to tell a lot about these extremely successful occasions to fill this article with a strong content? We have a good reason for that: We are a late comer to China and those parts of transformation can best be documented by the development experts who had a chance to be a part of those initiatives to come to Beijing in early 1980s. That time was a critical time where most of the successful initiatives that has created the current success were being designed, experimented, and developed. Surely, those were desperate times when there was urgent need to address extremely desperate questions with resilient answers with major survival risks. There was massive urgency for problems arising from extreme population growth, the risk for hunger and permanent risk for poverty where resources were not available to figure out day to day logistics of production, delivery, and consumption. Hard words were not enough to discover magic solutions to difficult problems. At those times, local, regional, and international experts were trying hard to find solutions by all means to issues begging for funding. There was also a desperate need to manage the change in a way to use all the resources available without leaving no one behind and to become open for international cooperation. Maybe an attitude to find a cat to catch mice without paying any attention to the color of the cat for those times. It became common practice to allow any cat, be it black or white, to try to catch the mice under any circumstance. This has become a symbol of Chinese pragmatism to address any question that has been waiting for a solution for some time. Many experts played critical roles to institutionalize this pragmatic approach along the years. We had a chance to meet some of those experts in different academic activities around China and enjoyed listening to their anecdotal documentation of from where China began creating direct solutions to day-to-day problems citizens suffered from reaching their optimal welfare. They took our attention to how ordinary people contributed to the massively successful leap-frog performance from hunger prevention to poverty reduction to a modestly middle income statues. There were so many bravery stories. There were so many heroes. There were so many unnamed, unrecorded, and unnoticed as many volunteered to stay silent not to ask for anything to play major roles for the success of pragmatism. We surely appreciate their contribution not only to China but to the general welfare of the world as well. In order to make a long story shorter, let us sum up: What we have in mind to write addressing the 70th Birthday of the PRC is corporatization! We want to pay a special attention to using firms or company formation as the main framework just from the initial phases of the beginning of this miraculous macro-economic performance that China proved attainable for many other emerging countries. We believe in one famous saying to mention that one hand is quite while two hands can make a big noise. Two hands in this saying refers to the foundation of a company to deliver a particular target of being served or being developed and kept as developed in the long run. It refers to the institutionalization of any economic progress. It sets aside the chance factor in a welfare gain.

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To make our point clearer, let’s make a small journey into history. Let’s take a look at what archeology and anthropology are telling us about initial social experiments of coming together(s). Let us go back to the roots of company formation from a historical perspective. It is a long history with so many relevant lessons for all of us. Does anyone remember the first ever firm or company designed and developed in the history? Put your bets for a second and let us share one news from Minor Asia with you. According to the recent archeological excavations and findings in and near the Gobeklitepe site (Near Sanlıurfa ¸ in Southeast Turkey); the earliest settlement of human beings in joint accommodation was set 12,000 years ago. Humans “came together” for spiritual activities in Gobeklitepe and that moment was the first ever origination for the rules of conduct “to live together” for a common destiny of humans for a shared future. Gobeklitepe was the first ever experiment of how people can come together beyond their family connectedness and how they can design rules of leaving together in a sustainable and reliably resilient methodology. It was the place any societal formation beyond family ties were placed into experimentation. Our first ever gatherings with so called foreigners or people somehow unknown to us totally or partially. Our argument is simple from Gobeklitepe findings: the demand for a corporate or a firm originated from those roots or from earliest experiments to come together for a common cause and to design, develop and operate a better way of life beyond individual’s time-restricted survival capabilities. Any guesses what life expectancy level was 12,000 years ago? Maybe, nowhere close to current levels but it is now proved that in very early stages, there was an open desire among humans to come together for a shared future and to somehow fight for a shareable destiny all together against the dangers arising from the untrustworthy natural causes or other dangers surrounding the living spaces. Surely, it was an inclusive strategy as well. Gobeklitepe was not singular but multi-cultural according to current discoveries from the site. Gobeklitepe surroundings kept changing constantly. Anyone from the near surroundings was given somehow access to the common grounds in one way or another. Consequently, the place was the ideal area where more than personal capacity was needed to serve all participating in spiritual activities: An initial demand for company formation. More than the origination of corporatization, the new joint way of life beyond collecting and hunting to create the first ever communal living was the source of the demand for “money” but is beyond the coverage of this particular note. But let us share some short insights. Beyond the coining of money, corporatization was a discovery of Lydian Civilization. They surely invented not money but coins as the new norm of money as Sumerians, Egyptians and Chinese all used differing tools as money historically. Lydian innovation of coins as the new form of money played an amazing role in the creation of “shops” as the earliest institutional experimentation of “companies” in the form that we have still been using in the age of digitalization: A corporate is a joint stock company to buy and sell anonymous goods and services just for the sake of profit maximization. Since the Magna Carta, there has been a gradual institutionalization of property rights to create welfare through firms and especially in the last three hundred years, all the welfare societies are the masters of company origination,

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design, development, and operation. We can make a simple argument that without a strong and sustainable corporate capacity, it will be extremely difficult to sustain any economic progress in the long run. Corporatization is the optimal way of sustaining institutionalization as a prerequisite for sustainable long run welfare enhancement. Our argument is becoming clearer now: Our understanding of the miraculous Chinese macro-economic performance relies on one main success strategy as the massive corporatization initiatives. The World never before experienced in such a short period of time to realize such a sharp success story in terms of company creation. What we see as the answer to how come China managed a transformation no one else reached anywhere close to this level is Chinese approach to firm origination, firm design, firm development and firm operation. It was not painless to discover optimal design of firms and support rapid corporatization: massive layoffs and unprecedented mergers and acquisitions have been implemented hurting many citizens starting from 1990s. We still observe efforts of merging inter-related companies. Such a massive dynamic and pragmatic approach to corporatization is giving China a capacity no other emerging countries have: Corporate China is fundamentally profitable. Why? There can actually be open clues to why China is a country where state-owned enterprises are profitable and are not a burden on central government budgets to lead issues such an original sin or crowding out as typical developing country problems: Please refer to periodical re-structuring efforts from the highest levels for any company that can possibly operate with higher profits. During the periodical overviews and periodical valuation of performances, if the decision makers can figure out a more profitable structure for any company or group of companies; a reform goes ahead almost spontaneously and instantly to give way for a brand new company of a mergers of companies or directed and managed acquisitions of interconnected companies. This short of decision making in China is slower to no other country in this world. This is a uniquely fast and sometimes very fast decision making strategy where the main aim is to figure out the optimal structure of any given company that is responsible to fulfill a particular societal responsibility. Companies are meant to serve so called “renmin” in China. And they are supposed to deliver this responsibility with a sustainably profitable way. Companies, even state-owned companies are extremely profitable against gigantic sizes with unprecedented scales of economies. Profits are supporting capital markets deepening up with massive dividend payments. Also, public finances in China compares to no other emerging countries with massive fiscal space for risk management or resolution. This should be one reason why there is no crowding out or original sin problem for Chinese renminbi. The backing of Chinese renminbi is surely the capacity of corporate China with an unprecedented scale to sustain their activities with profitability to share with individual investors as dividend payments. They pay taxes as contributions for massive structural fiscal surpluses. Isn’t this the real backing of any fiat currency after the collapse of commodity standards from 1972? What else can be a better identification for the real backing of renminbi? When China has got so many gigantic corporates with a clear track record of profitability which is regulated and supervised contemporaneously to sustain profits to a certain extend

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and make sure keep paying taxes and dividends, how come there can be any lack of unmanageable economic re-structuring tools when there comes a time to re- direct the economy from one direction into the other? All the countries need this space. A fiscal space that can be used under the economic stress. A fiscal capacity to spend when no one else within the economy is daring to spend. An ammunition that gives a massive opportunity to trigger economic sustainability in hard times. When the time comes to spend all the water that has been collected while raining. Is there any other emerging country in a better position in terms of this capacity? Let us underline one more thing as we get closer to the end of this article: what happens to the research and development activities for companies with Chinese characteristics? Should we assume simply that state administered innovation capacity is much more creative than the generally accepted free liberal markets micro- and macrostructures? Maybe, we should not go that far. Why? Because socialism with Chinese characteristics relies on the fruits of market economy price discovery mechanisms. What China uniquely managed is to create a space for market economy without downgrading the main economic governance and without jeopardizing the innovation capacity. Innovation matters in the big picture because, it brings productivity gains in production, distribution, and consumption. Every productivity gain is a prerequisite for additional profitability. Profit means more taxes or more dividends if not both. Underlying backing of a currency is, from this perspective, the profit generating productivity gains to lead more profits for being shared with investors and the state. Corporatization is one of the best enhancer for the real backing of a national currency, when valued from this picture. Long term welfare enhancement is best guaranteed with profit generating companies to spare enough resources for research and development for seamless innovation. It is a positive cycle that supports the strength of macro- economic well-being as well. Next time you visit Beijing, please take a very long walk on Chang’an Avenue through Tiananmen Square. As you get closer to the Beijing Headquarters of the People’s Bank of China, you will see many towers. Each belongs to another successful Chinese corporate’s headquarters as the real backing of renminbi. The same observation is valid for Shanghai, Guangzhou, Shenzhen, Hangzhou, Chongqing, and many other mega cities all around China where you see skyscrapers representing just another profitable company with a mega balance sheet full of profit to share with shareholders and the People’s Republic of China central and local budgets as taxes. This is not a common sight seeing in other developing countries. Corporate structure in China is much closer in China to developed countries, instead of developing countries. What is our final stake? Where do we want to bring this discussion? How can we connect these opinions into the current global financial conjecture? What is the relevance of our discussion to international monetary and financial systems? We believe that the root cause of the current trade war climate has got nothing to do with the international trade. Again, extensively gossiped currency wars will have nothing to do with currencies. If you really want to understand why we have a new economic contest for this decade, treat it as arising from contestable innovation capacity of corporatization. This is a war of innovative corporate capacity skill hunt.

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This is a war for research based innovative corporatization to increase corporate profits for higher dividends and for higher tax contributions for fiscal support. This is a war of contestable corporate capacities; and few to do with trade, investment, or currencies. This is a war to figure out before everyone else what the next cutting edge technology will be to generate most profit to distribute highest dividends and taxes to the relevant governments. It is a sort of contestable corporatization to figure out the firms of the next century to produce goods and services with the most profitable way to sustain welfare society standards and to keep fighting in the direction of becoming a welfare society. When you take out the hype of trade war terminology and replace it with “contestable” terminology, we come to competition, which is generally accepted as the best form of market structure: Congratulations to the PRC’s 70th birthday and thank you for making the world a more competitive economic place. This will surely be remembered. This will surely lead to a more optimal equilibrium for all the citizens of the world. This will support more investment on research and development. This will lead to more innovation. This will lead to more dividends and profits. This will lead to funding surpluses to export to those parts in need. This will surely lead to a better world of all the citizens of our worlds, not for only tomorrow or next month but for the following centuries as well.

Chapter 93

Meaning of the Chinese Factor for Modern World Financial System Development: Challenges and Opportunities for Russia Violetta Arkhipova

The acute phase of the global financial and economic crisis observed in 2008– 2009 and the start of global reforms initiated by the G20 predetermined the beginning of a new stage of international monetary and financial system (IMFS) development. This new stage is characterized by active Chinese factor applying for the leading positions of IMFS in the long-run, i.e., among the “core” countries. The word combination “Chinese factor” here and after refers to the success of China having been achieved in national economic progress and in the field of IMFS during the “reforms and opening” since 1978. The purpose of the research is to assess the current state of the Chinese national financial system for the possibility of China to become one of the “core” countries of IMFS and then strengthen the dominant positions. The report consists of five parts. Section 1 is devoted to the analysis of the level, the structure, and features of Chinese financial system. Section 2 includes the evaluation of national monetary effects related to currency liberalization and internationalization of the renminbi. Section 3 comprises the degree and depth of Chinese inclusion into the IMFS, its achievements in developing of the new spheres of financial relations on the example of “green” financial instruments market. Section 4 involves author’s forecast and recommendations for maintaining further quantitative and qualitative growth and economic progress. Section 5 concludes the research. We used statistical and comparative analysis of a wide range of financial indicators such as levels of financial depth, bank and non-bank assets ratios, banking concentration, volumes of lending to real sector of economy, market capitalization, real effective exchange rates, currency structure of cross-border transactions, foreign exchange market turnover, global and national “green” bond issuance, etc. To conduct comparative analysis, we generally employed the examples and data on the USA, UK and Eurozone, Japan, and Russia. V. Arkhipova (B) Institute of Economics of Russian Academy of Sciences, Moscow, Russia e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_93

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According to the results of Section 1, the Chinese financial sector is characterized by the dominance of bank assets (the model of financial sector can be named as “banking” one), relatively high level of bank concentration and relatively low degree of financial depth. These facts can be considered both as advantages and as disadvantages. On the one hand, such a model of national financial system is more convenient for state control and regulation; on the other hand, it artificially limits the ability to raise capital. Based on the second part of research the following conclusions were made. Since the “reforms and opening” from 1978 in compliance with gradualism strategy China reached a high level of RMB internationalization namely its being included into the basket of world reserve currencies in 2016. This is an important event for international financial relations because China became the first developing country to reach such significant results and started the revision process of world currency financial principles and law and rethinking of world financial organizations’ requirements (notably those of IMF). On the ground of Section 3, we identified the challenges and limiting factors for China to become one of the “core” countries in the IMFS, i.e., the features of FDI inflows and outflows referred to as “financial cycle” and “irrational investment” effect, etc. But there are very strong positive outcomes from Chinese cooperation with other countries within the “Belt and Road Initiative” (BRI) as an effect opposing to the negative ones mentioned above. Here we also refer to the problems and prospects of conjugation processes between the Eurasian Economic Union (EEU) and the BRI. Additionally, several Chinese banks and insurance company are in the list of global systemically important institutions in the 2010s. Section 3 also contains the results of research in the field of modern trends associated with the “greening” of national and world financial systems. The main factor here is China’s gradual assumption of the leading position both in terms of “green finance” and within the framework of the “green” global financial market. China’s achievements are marked mainly in three areas: (1) significant real and potential achievements of national “green” market initiatives; (2) progress in creation of effective management system for “green finance” regulation; (3) active expansion of international cooperation and comprehensive support provided to developing countries moving towards the promotion of financial “greening.” The main reasons for the popularity of “green” finance in China are the environmental problems caused by the country’s transformation into “the world’s factory” and the need to achieve the goals of “ecological civilization” and “harmonious society”. The special part of the research refers to possibilities of the Sino-Russian cooperation in this sphere. According to the parts of research within the Sections 1–3, since the mid-2000s China cannot be clearly classified as either a “core” or a “periphery” state of the IMFS. Now this country is situated in the intermediate “near-core” financial “space.” Section 4 includes the following main judgments and main recommendations which, from our point of view, could help China become one of the “core” countries of the IMFS. Firstly, it is suggested for China to make choice and place a bet on the development of new spheres of financial relations and innovative financial products’ creation and

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development thereby to find its own “niches” within the global financial system and strongly strengthen the leading positions there. The emerging examples of these “niches” in the modern world economy are the global “green” financial instruments market, the mobile payments area, segments of e-commerce, etc. Secondly, it is proposed for China during further RMB internalization, first of all, to transform it into a strong regional currency, for instance, within the Asian region already feels the active presence of “Chinese factor” on itself, and then to intensify the processes of its “globalization.” It is the regional multi-vector cooperation that helps China to entice the “periphery” of the USA-centric global financial system and thus to change the position of developing countries on a new stage of the IMFS development. Additionally, China puts forward the principles of mutual benefits and trust for international cooperation, which are much more attractive than the US “the winner takes it all” strategy and “games” with nil zero, unfair sanction regimes practice, etc. activities. Third, it is offered to lower the dependence on the US dollar by the use of national currencies for cross-border settlements, also develop and make interconnection of national payment systems. It is extremely important for those countries that nowadays face the problem of sanctions (in particular Russia) and trade wars (i.e., China). Fourth, it is provided for China to maintain the unity and coherence of the internal development goals and adherence to its reaching, i.e., to build a “financial system with Chinese characteristics.” It means that such a financial system will serve the purposes of “ecological civilization”, “harmonious society,” and “community of common destiny” creation being based on strong philosophical ground and the idea of balanced market regulation. Finally, it is proposed for China to further follow the gradualism approach while reforming the financial and economic system. This approach allows the country not only to employ and develop necessary “chains” of institutes, correct the mistakes, and effectively respond to challenges, but also to make “burst” in the future. Section 5 combines all the results obtained during the research which parts are presented and analyzed above.

Chapter 94

China’s Macroeconomic Policy Trifecta and Challenges to the Governance of the Global Trading System Mark Steven Kruger

94.1 Introduction In recent years, Chinese policymakers have undertaken a precarious balancing act. They are trying to simultaneously attain three macroeconomic objectives. However, the attainment of any one objective reduces the chance that the others will be attained. At the same time, the US is no longer supporting the global institutions that set the rules for how international trade should be conducted. This essay describes China’s difficult macroeconomic balancing act in the context of the trade war and existential threats to the WTO. It concludes with suggestion for how China might step up and provide the kind of leadership the international community sorely needs.

94.2 China’s Macroeconomic Policy Trifecta In recent years, China’s policy mix has become more challenging. For much of the last three decades, China’s primary policy objective was to achieve a high rate of economic growth. This policy imperative was driven by demographics. Between 1980 and 2010, China’s working age population increased by 411 million and policy makers needed to ensure there was sufficient economic activity to absorb these new labour market entrants. This led to the policy of “protecting eight” (bao ba), as 8% growth was seen as the minimum to ensure labour market stability. Now, with the working age population actually shrinking, the policy imperative has turned from “jobs, jobs, jobs” to raising productivity and increasing efficiency. Moreover, as M. S. Kruger (B) Centre for International Governance Innovation of Canada, Waterloo, Canada e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_94

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the incomes of Chinese citizens have risen, their concerns have broadened, and the economic policy mix has had to address such diverse issues as affordable housing, pollution mitigation, and income disparities. The changing scope of China’s economic policy and how well policymakers have fared is a complex topic and well beyond the scope of this essay. Here, we will look more narrowly at macroeconomic policy and the interplay between key macroeconomic objectives in the current conjuncture. This macroeconomic policy trifecta is illustrated in Fig. 94.1.1 The three objectives are (i) meeting targets for GDP growth, (ii) promoting financial stability, and (iii) managing protectionist pressures. It is easy to see how attaining any one objective makes hitting the others more difficult. Meeting the growth targets could imply allowing firms and governments to increase their borrowings, so as to take advantage of incremental investment opportunities. However, this additional debt could imperil financial stability. Conversely, the tighter credit conditions needed to promote financial stability make it more difficult for the economy to grow rapidly. Managing protectionist pressures could involve accepting a stronger exchange rate or lowering tariffs. However, these measures would tend to dampen growth. Similarly, managing protectionist pressures could involve accelerated financial market liberalization. More open financial markets would be good for both economic growth and financial stability in the long run. However, there is a risk that, if poorly sequenced, large two-way capital flows could, in the near term, undermine domestic financial stability.2 Now, let’s look at each one of China’s macroeconomic objectives in more detail.

94.3 Meeting GDP Growth Targets China has long had the objective of doubling its real GDP between 2010 and 2020. Figure 94.2 shows the progress in meeting this objective. Here, the level of Chinese real GDP is indexed to 2010 = 100. Through 2018, the level of real GDP stood close to 80% higher than the 2010 starting point. Growth needs to average 6% this year and next for the target to be met. Since growth averaged 6.7% over 2016–18, one would think that, in normal times, this should be an easy objective to meet. However, these are not normal times.

1

The term “trifecta” comes from pari-mutuel horse race betting. It describes a bet in which one must pick the horses finishing first, second and third in exact order. It is an extremely difficult bet to get right. However, the payoff is huge for those lucky handicappers who are able to do so. 2 A more liberal capital account regime could result in China having to intermediate a potentially huge amount of capital inflows. A back-of-the-envelope calculation suggests that if the ratio of China’s international liabilities to GDP were to converge to that of the G20 average-ex-China over a 20-year period, capital inflows would rise by close to US$500 billion per year. This would represent a doubling of inflows from their current level! For details see: Mark Kruger and Gurnain Pasricha, “What to Expect When China Liberalizes Its Capital Account”, Bank of Canada Staff Discussion Paper 2016–10 (https://www.bankofcanada.ca/2016/04/staff-discussion-paper-2016-10/).

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Fig. 94.1 The Macroeconomic Policy Trifecta

Fig. 94.2 China’s GDP growth. Source National Bureau of Statistics

In its 2019 Article IV report, the IMF warns that if the U.S. raises tariffs to 25% on the remaining Chinese imports, China’s GDP growth could fall by around 0.8% points.3 China has both the fiscal and monetary space to manage a shock of this magnitude. It has contingency plans in-place for additional spending on housing, farming, rural connectivity, and regional development. In addition, the one-year government bond rate, at 2.6%, is far from zero and banks still hold about 10 percent of their deposits as reserves with the People’s Bank of China. 3

See International Monetary Fund, “People’s Republic of China: Staff Report for the Article IV Consultation”, July 12, 2019, https://www.imf.org/en/Publications/CR/Issues/2019/08/08/PeoplesRepublic-of-China-2019-Article-IV-Consultation-Press-Release-Staff-Report-Staff-48576.

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Nevertheless, execution of these counter-measures implies further expanding either public or private sector balance sheets and some roll back of the progress of achieving financial stability. Given that the Chinese government’s balance sheet is the strongest, it seems reasonable that China should respond to a further escalation of trade tensions with central government, on-the-budget fiscal support.

94.4 Promoting Financial Stability The key risk to China’s financial stability is illustrated in Fig. 94.3. It shows that China’s debt-to-GDP ratio climbed rapidly since the crisis: from 150 to 300%. A debtto-GDP ratio of three times GDP is not particularly high. China ranks somewhere in the middle of the G20 countries in this regard. Among the G20 countries, China is relatively highly indebted given that it is an emerging market economy. Indeed, all of the G20 countries that are more indebted than China are advanced countries. However, China benefits from some advantages that most other emerging market countries do not have: its economy is growing relatively rapidly, it is an international creditor and almost all of its borrowings are in renminbi. The financial stability concern is more with how fast debt has been accumulated and the quality of these credits, rather than the level of the debt itself. Moreover, much of the new debt was contracted through the shadow banking system in which counterparty risk was opaque and liquidity risk was elevated. President Xi Jinping has taken the promotion of financial stability seriously. He has reiterated that preventing financial risks is one of China’s “three major battles” (san da gongjianzhan), along with environmental remediation and poverty reduction. China is targeting a steady and gradual reduction in the debt- to-GDP ratio and has taken measures to rein in the shadow banking system. As Fig. 94.3 shows, progress has been made in stabilizing the debt-to-GDP ratio in the last year and a half. But,

Fig. 94.3 Debt to GDP ratio

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with GDP growth slowing and pressures building for a policy response to the trade tensions, it remains to be seen if the progress in promoting financial stability can be maintained.

94.5 Managing Protectionist Pressures The US has a set of wide-ranging concerns vis-à-vis Chinese economic policy. The bilateral trade deficit, perhaps because it is easily measured, has prominence of place. We will not discuss here the reasonableness of focusing on a bilateral, rather than the overall, trade deficit. Nor will we analyze countries’ overall trade positions with respect to their savings-investment imbalances and the myriad factors that determine a country’s savings and investment. In this section, we will focus on statements made by the US Trade Representative (USTR), Mr. Robert Lighthizer, in his 2017 Report to Congress on China’s WTO Compliance.4 Mr. Lighthizer says, Since China joined the WTO, the U.S.-China trade imbalance has grown exponentially. … A trade relationship that is neither natural nor sustainable.

The US-China bilateral balance in goods and services is depicted in Fig. 94.4. It shows that the US’s deficit has, indeed, ballooned from US$81 billion in 2001, when China joined the WTO, to just over US$380 billion in 2018. However, the world has not stood still over this period. Importantly, the US economy has continued to grow. As Fig. 94.4 shows, when expressed as a percentage of US GDP, the bilateral goods and service deficit has remained remarkably stable at just under 2% over the last 10 years. A modest and stable trade deficit, as a share of the US economy, does not appear to be unnatural or unsustainable. It is also worth mentioning that this deficit, expressed as a percentage of China’s GDP, has shrunk dramatically, from close to 9% in 2005 to just under 3% in 2018. There is a strong sense among US policy makers that the bilateral deficit is, in part, the result of an under-valued currency. Indeed, in August, the US Treasury designated China as a currency manipulator, which was trying to “gain an unfair competitive advantage in international trade.”5 This was the first time since 1994 that the US Treasury has called China out for manipulating its currency. However, the US’s assessment is not widely shared. For example, the IMF Article IV report cited above says there is little evidence of foreign currency intervention by the People’s Bank of China. Moreover, despite a modest, 2½ percent, depreciation against the US dollar in the past year, the renminbi was broadly stable on a multilateral basis. The Fund’s Mission Chief for China, James Daniel, speaking on a conference call just after 4

See United States Trade Representative, “2017 Report to Congress On China’s WTO Compliance,” January 2018, https://ustr.gov/sites/default/files/files/Press/Reports/China%202017%20WTO% 20Report.pdf. 5 See US Treasury Press Release, “Treasury Designates China as a Currency Manipulator,” August 5, 2019, https://home.treasury.gov/news/press-releases/sm751.

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Fig. 94.4 Sino-US bilateral trade balance in goods and services. Source IFS, WEO

the release of the report, was quoted as saying that the Chinese exchange rate was “broadly in line with fundamentals,” not significantly overvalued or undervalued.6 Of course, the US’s concerns go far beyond the bilateral trade deficit and center, more broadly, on Chinese industrial policy. In the following paragraphs, we will contrast the statements made in the USTR’s report with the results of the 2019 survey undertaken by the American Chamber of Commerce in China (AmCham). The AmCham is a non-profit, non-governmental organization, whose membership includes the major US business operating in China, such as Apple, Cisco, and JPMorgan. The 2019 survey, which was undertaken in late 2018, was based on 317 responses. Mr. Lighthizer says, The Chinese government has continued to pursue and expand industrial policies that promote, guide and support domestic industries while simultaneously and actively seeking to impede, disadvantage and harm their foreign counterparts.

To what extent, are Chinese policies actually impeding, disadvantaging, and harming foreign companies? AmCham asks its members how foreign companies are treated relative to local companies. Their responses for 2016–2018 are shown in Fig. 94.5. In 2018, 44% said that foreign companies are treated unfairly. This is clearly not a good state of affairs—neither for foreign companies nor for the long-run competitiveness of the Chinese economy. However, the share of companies that feel unfavorably treated has been falling over time and is down 11% points from 2016. In 2018, about half the respondents say that they are treated the same as domestic firms. Surprisingly, 8% say that they were being treated even better than domestic firms. These results indicate that while the situation is not great, it is getting better. 6

See Bloomberg, “IMF Says China Should Keep Yuan Flexible as Trade War Widens,” August 9, 2019, https://www.bloomberg.com/amp//news/articles/2019-08-09/imf-says-china-should-keepcurrency-flexible-as-trade-war-widens.

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Fig. 94.5 China’s treatment of foreign enterprises and Chinese enterprise. Source American Chamber of Commerce Survey 2019

One of the US’s key concerns is forced technology transfer. Mr. Lighthizer says, The Chinese regulatory authorities … require or pressure foreign companies to transfer technology as a condition for securing investment or other approvals.

AmCham asks its members how much intellectual property they share with their Chinese partners, compared with partners in other countries. Figure 94.6 shows that 17% of the respondents say that they share “somewhat more” or “much more” with their Chinese partners, while 35% say they share “somewhat less” or “much less.” Almost half say that there is no difference. Taken together these responses indicate that either forced technology transfer does not appear to be a big problem in aggregate or that the American firms are able to manage the pressures to transfer intellectual property.

Fig. 94.6 Enterprises and China’s sharing of intellectual property compared to other countries. Source American Chamber of Commerce Survey 2019

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Another key US concern is the protection of intellectual property. Mr. Lighthizer says, China continues to pursue myriad policies that require or favor the ownership or development of IP in China.

AmCham asks its members how the enforcement of their intellectual property rights has evolved over the last five years. Figure 94.7 shows that 59% of the respondents say enforcement has improved. Only 4% say it has deteriorated and 37% say it has remained the same. Here too the picture is improving, even if the starting point does leave something to be desired. In contrast, Mr. Lighthizer believes things are getting worse, Over the past five years … the state’s role in the economy has increased, as have the seriousness and breadth of concerns facing U.S. and other foreign companies (emphasis added). For a number of years now, AmCham has asked its members about the quality of the investment environment in China. The results for the last six years are shown in Fig. 94.8. While just over a fifth of the respondents say that the investment environment is deteriorating, almost two-fifths say that it is improving. Moreover, this ratio of responses has remained fairly stable over time, providing a contrasting view to that of Mr. Lighthizer.

Fig. 94.7 Implementation of IPR protection in China over the past five years. Source American Chamber of Commerce Survey 2019

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Fig. 94.8 Quality of investment environment in China. Source American Chamber of Commerce Survey 2019

The OECD provides an interesting perspective on this question as well. It constructs a Foreign Direct Investment Index for its members as well as other major economies. Its index is composed of (i) foreign equity limitations, (ii) discriminatory screening or investment approval mechanisms, (iii) restrictions on the employment of foreigners and (iv) other operational restrictions. The time series of this index is shown in Fig. 94.9. China’s foreign direct investment regime is restrictive; in fact, it ranks 63rd out of the 68 countries surveyed (Canada ranks 55th). Nevertheless, China has made tremendous progress in reducing the restrictiveness of its investment regime in absolute terms over time. In particular, since 2014 the restrictiveness of China’s foreign direct investment regime has fallen by as much as the distance between Canada (the red line) and the OECD average (the black line). Thus, the OECD data reinforces the trend suggested by the AmCham survey responses: the business environment for foreign firms is slowly improving.

94.6 Challenges to the Governance of the Global Trading System Given the trends discussed above, we find it disturbing that Mr. Lighthizer says, Furthermore, it is now clear that the WTO rules are not sufficient to constrain China’s market-distorting behavior.

However, it seems that China does take the WTO very seriously. As Paul Blustein has noted, while the US has, in several cases, ignored or skirted negative WTO

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Fig. 94.9 Foreign direct investment time series

rulings, China dislikes being branded a rule breaker and it has a commendable track record of complying when it does lose a WTO case.7 Layered on top of the US’s concerns with China’s industrial policy is its ambivalence toward the WTO, in particular, its Appellate Body. Robert McDougall has written that these concerns are not new and date long before the Trump administration and even before the emergence of open rivalry between the United States and China.8 Jennifer Hillman, an American who served on the WTO’s Appellate Body, has written that the US is not actively engaged in trying to fix the problems it perceives and that “Mr. Lighthizer appears to prefer blowing up the entire system.” She notes that when the WTO’s General Council met in December 2018, the European Union and eleven countries, including China, Canada, Mexico, and South Korea, proposed changes to the body’s dispute settlement system to respond to the US’s complaints. They hoped their suggestions would convince the United States to allow vacancies on the appellate panel to be filled. Instead, the US rejected all the changes while refusing to put forward proposals of its own, and it has blocked the reappointments of appellate judges.9 The Appellate Body will be able to continue work on existing cases for a year or two because members whose terms have expired are allowed to continue to work on 7

See Paul Blustein, “China Inc. in the WTO Dock Tales from a System under Fire,” CIGI Papers No. 157, December 2017, https://www.cigionline.org/publications/china-inc-wto-dock-tales-sys tem-under-fire. 8 See Robert McDougall, “Crisis in the WTO Restoring the WTO Dispute Settlement Function,” CIGI Papers 194, October 2018, https://www.cigionline.org/publications/crisis-wto-restoring-dis pute-settlement-function. 9 Ms. Hillman is a professor at Georgetown Law Center, a former member of the World Trade Organization’s appellate body and a former ambassador and general counsel in the Office of the United States Trade Representative. Her comments appeared in the December 17, 2018 edition of the New York Times, https://www.nytimes.com/2018/12/17/opinion/trade-war-china-wto.amp.html.

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cases they have started. But after December the appellate body will be unable to take on new cases, effectively gutting the appellate system.

94.7 What Can China Do? The business environment for foreign enterprises in China is difficult. According to the firms surveyed by AmCham, the top challenge they face is “inconsistent regulatory interpretation and unclear laws and enforcement.” Thus, China needs to continue its efforts to make its trade and investment regime transparent and open. It is encouraging that China has recently taken positive steps in this regard. Its creation of a Negative List for investment does help promote transparency. Moreover, its revisions to this list in July will allow for more access in agriculture, mining, and infrastructure. The new foreign investment law will come into effect in January 2020. It will provide for equal treatment of foreign and domestic firms and explicitly prohibit forced technology transfer. This summer, China liberalized access to its financial sector by allowing foreign firms to take controlling stakes in Chinese banks, life insurance companies, asset management companies. As a result, UBS, Nomura, Morgan Stanley, and JPMorgan have all taken control of their securities joint-ventures. These ownership limits are to be eliminated in 2020. The prospect for continuing a rules-based regime for international trade is perhaps even more difficult. As the world’s largest trader, China has the most to lose from a breakdown of the WTO. Thus, it behooves China to take a leadership role and help fill the gap in global governance. China could do more to convince the US, and others, that its industrial policy does not distort international trade. For example, China is fully within its rights to have a large state-owned sector. Indeed, it has been able to usefully harness state-owned capital in a Keynesian, countercyclical fashion to stabilize economic activity. However, it needs to do more to show that state-owned enterprises do not provide components to exporters at preferential prices, which could give rise to unfair commercial advantages. Richard Haas, the President of the Council on Foreign Relations, calls the US’s foreign policy “The Great Abdication” as it is no longer supporting the global institutions that set the rules for how international relations are being conducted.10 As the US steps back, the world needs China to step up.

10

See Richard Haas, “The Great Abdication,” The Atlantic, December 28, 2017, https://theatlantic. com/article/549296/.

Chapter 95

Economic Growth and Inclusive Development: Some Observations from Indian Farmers’ Perspective Anji Raju Vegiraju

95.1 Introduction There is enough wealth in the world to provide everyone with a fair chance to lead a decent life, but it is increasingly concentrated among a privileged few while millions of people are barely surviving. The world’s 26 richest billionaires own as many assets as the 3.8 billion people who make up the poorest half of the planet’s population. According to a Credit Suisse Global Wealth Report in 2018, the richest 10% Indians own more than the balance 90%. This per cent is more in USA as the top one per cent own more than the bottom 90%. India stands 142nd in the per capita nominal GDP, compared to 6th in the nominal GDP in 2018 that is the extent of the inequality.

95.2 Indian Farmers India is the world’s 2nd largest producer of food grains with an annual output of 280 million tonnes (2017–18) next to China. But the majority of the poor are in rural areas depending mainly on farming. Over the years, the agriculture sector has not been receiving as much attention as services and manufacturing sectors. Agriculture accounted for 52% of GDP in 1950 but its share has gradually declined to less than 15%. However, dependency has not reduced proportionately, and three-quarters of India’s families still depend on agriculture and its allied activities. Agriculture productivity levels are very low at about 2.4 tonnes per hectare, whereas China’s yields are almost double this figure. These developments are pushing farmers into A. R. Vegiraju (B) Institute of Public Enterprise of India, Hyderabad, India e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_95

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debt trap and forcing them to migrate to urban areas for their livelihoods. This trend is very much disturbing and leading to social and economic imbalances in rural areas. This paper attempts to examine the scope of improving their incomes, taking success stories into consideration.

95.3 Government Efforts The Government of India has set a target of doubling farmers’ income by the year 2022 and constituted an Inter-Ministerial Committee to examine issues relating to Doubling of Farmers’ Income (DFI). The Committee has identified seven sources of income growth namely, improvement in crop productivity; improvement in livestock productivity; resource use efficiency or savings in the cost of production; increase in the cropping intensity; diversification towards high value crops; improvement in real prices received by farmers; and shift from farm to non-farm occupations.

95.4 Factors that Have Proved Effective in Alleviating Rural Poverty The following five crucial aspects will play an important role in enhancing the profitability of farming and reduce the rural poverty.

Participatory Implementation of Schemes The government poverty alleviation schemes for the benefit of rural poor are always well thought of but what percentage of earmarked funds are reaching to the beneficiaries? The answer is that the extent of benefits percolating to the target segment is not up to the expectations. Therefore, there is a problem with the process. Many times, programs are planned, executed, and monitored by the government machinery without involving the prospective beneficiaries neither at the level of identifying the priority needs nor at the implementation level. In the process, the beneficiaries neither understand what they are getting nor develop a sense of belongingness to the schemes. The Government machinery has targets to implement the programs in a stipulated time and therefore not in a position to concentrate on the quality. Similarly, the transfer of technologies to enhance the productivity of farming happens on broader perspective rather than location and resource specific. Farming requirements can’t be generalized as every farmer has his/her specific needs. It is highly location specific and therefore general prescription won’t work rather it would go waste.

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The participatory approaches are not new to India as the cooperative movement has made our country self-sufficient in milk and sugar. The similar concept for small saving and micro-credit through self-help groups working well. It is due to individual members’ participation and involvement on different aspects of self- management for mutual benefits. The integrated bottom up approach may be adopted even though it takes more time and energies in the implementation. Case: Hiware Bazar village lies in the drought-prone Ahmednagar district. Prior to 1989, the village was facing several problems such as migration of the villagers to the nearby urban areas due to frequent droughts and scarcity of water. In less than a decade it turned itself around into one of the most prosperous villages of the country by regenerating its natural resources with soil and water conservation, afforestation. The success is due to active participatory approach involving everyone in the implementation of schemes extended by the Government and a strong village institutional set-up. It has proved that the interactive participatory approach with planning, implementation, monitoring and evaluation with the proposed beneficiaries would not only give better outcomes but also sustainable results.

Soil and Water Conservation Human survival is basically dependent on air, water, and food, but today, all of them are either polluted or in short supply. We can see the correlation to the development and prosperities with water. If we look at the four major human civilizations began, they are alongside perennial rivers such as Nile, Yellow, Tigris and Indus for Egypt, China, Iraq, and India respectively. It is a reflection on the importance of water for the cultivation of crops and prosperity. Sir Arthur Cotton transformed the drought and flood prone Godavari Districts of Andhra Pradesh state into the “Rice Bowl” of the state by constructing Davaleshwaram Dam on Goadvari River (1947–52). The irrigation facilities gave an assured income from crops grown in the command area and people of that area flourished. Construction of tanks in dry land areas for irrigation purpose has significance and also played vital role in conserving rainwater to mitigate the effects of the drought. Over 73 million ha, which is more than 50% of the arable land is rainfed and contributing 40% of food grains and supporting more than 60% of livestock. Out of the total precipitation received only 37.5% is absorbed into soil and the balance is getting wasted in the form of runoff (45%) and evaporation (17.5%). Many times, crop failures are due to drought and depletion of groundwater. This can be moderated to a large extent with the water conservation practices and therefore Government started National Watershed Development Programs during 1970s under the Ministry of Rural Development for soil and water conservation. Case: Ralegan Siddhi village of Maharashtra is one of the widely discussed success stories of sustainable village development through soil and water conservation works. Ralegan Siddhi is in a drought-prone and rain-shadowed area of Maharashtra. In 1975, this was a place of poverty and hopelessness. The abuse of their

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natural resources coupled with water runoff and soil degradation and dry wells made it difficult for people to find drinking water during part of the year. As a result of which people started leaving Ralegan Siddhi in search for work and a livelihood elsewhere. A man named Shri Baburao Hazare after his retirement, returned to his village Ralegan Siddhi in 1975. He decided to find a solution and began interacting with the community on the water conservation and harvesting. He knew that the only way that the village could be revived was with the participation of the entire community and getting people involved in water conservation and harvesting. The active participation of villagers led to the complete conservation of water with contour bundings, check dams on streams and afforestation. Now, they have improved ground water levels for the cultivation of crops and are well-off with high income from their farming.

Post-harvest Management Post-harvest losses of agricultural products in India were estimated to be Rs. 92,000 crore as per the Food Processing Ministry report (9th August 2016). Large quantities of the fresh agro-products primarily vegetables and fruits are either found to be damaged or spoiled before it reaches the market, consumer or processing plant and thereby huge qualitative, quantitative, and economic losses. These losses are in the process of transport, high moisture at the time of the storage, bird pickings, threshing losses, rodents in the field and storage and insects in the storage. The corporate investments for agro-processing industry can play a major role providing integrated and complete package right from harvesting, handling and transportation and distribution from farm gate to the consumer. Elimination of some layers of intermediaries is possible that will support for the overall benefit of farmers when Government keeps certain monitoring mechanism. 1. Processing industry will procure directly from farmers at the village level through collection centers with loading, transparent pricing and proper weighing and minimized transaction costs to farmers. 2. They can make agreements with the farmers to grow fruits and vegetables as per their requirement and make an assured buy-back arrangements. 3. The industry will provide effective supply chain mechanism and thereby reduced spoilage and wastage. The cold chain infrastructure comprising the network of procurement, warehousing, transportation, grading and retailing of produce/food products under controlled temperature is highly fragmented. With the industry involvement, there is a possibility of improved infrastructure with storage and cold chain facilities etc. to manage the demand and supply fluctuations of agricultural products. 4. Forward linkage with consumers with value-added products is the area where the industry would certainly concentrate with rising incomes, urbanizing and changing lifestyles, consumer aspirations and the population’s age profile. Any

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value addition to the produce with food-processing will increases profitability for the farmers. Cases: Companies like PepsiCo, MacDonald, ITC, and Patanjali are having agreements with farmers and procuring their entire produce directly from farm. Palm oil promotion through trilateral arrangement between Government, Industry and Farmers is another example that benefits farmers at large. Palm oil: Palm oil cultivation with the partnership of farmers and industry is a successful model. In this case, Government identifies corporates in the earmarking of certain areas for the procurement of palm oil fruits at a pre-fixed price. Corporates have to extend the technologies, inputs to farmers and set up processing units, procure fruits, process it and market. The integrated approach right from technology transfer to procurement assures minimum remunerative income to farmers and not at the mercy of traders. Patanjali Ayurved Ltd is one of the country’s leading domestic FMCG Company working closely with the farmers in the production, procurement through buy-back arrangements, post-harvest operations, processing the products for value addition and marketing along with training farmers in the way to raise their income considerably. PepsiCo India was the first to introduce collaborative farming of potatoes in India in 2004–2005. It is working with farmers in over 9 states and more than 45% of these farmers are small and marginal. PepsiCo helped to improve the income of these farmers with assured buy-back of produce at pre-agreed prices.

Integrated Farming to Build Resilience to Climate Change The productivity of rain-fed crops continues to be low; it is one half to one third of that obtained with irrigated crops. The dry land farming remains a gamble with frequent crop failures due to deficient rainfall and their uneven distribution. Most of the times, rural livelihoods are seasonal and crop failures are pushing the farmers into debt trap and migration to urban areas. To reverse the trend, there is a need to diversify to those activities that would give round the year work and incomes. The traditional risk management strategies for drought management like practicing integrated farming with the annual crops, perennial trees, livestock, fodder cultivation for animals, mixed cropping, cultural practices with the timely operations such as soil preparation, sowing, weeding etc., effective use of natural resources like organic manures for soil fertility and botanical extracts (leaves of Pongamia, Annona, Vitex, etc.) for pest control to be revived and strengthened. Case: Nandimallagadda is a small village near Wanaparthy town in Mahaboobnagar district of Telangana state. Farmers of the village revived the traditional mixed farming concept with the perennial plantations (fruit, woody and fodder) along with the annual crops and livestock in addition to bio-inputs usage, seed production activity has been giving sustainable assured minimum incomes even under drought conditions. Villagers are getting fodder, firewood, fruits, and green manure in addition

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to food grains. The microclimate of the village improved with lots of greenery. The pre- and post-monsoon rains are effectively utilizing with improved soil and water conservation. It is generating employment throughout the year with increased incomes.

Corporate Social Responsibility Business is for profit, there is nothing wrong with having rich people as long as you’re making your money by setting up competitive businesses that make products that people want to buy and create value and socially responsible. They should also look beyond profits and deliberate on their social responsibility for its own sustainability and long term benefits. Most companies focus on more profits from year to year and neglect sharing a part of its gains to the society at large. Companies are concentrating on the employees’ welfare with a fear of higher attrition rates. But most of them are neglecting the society and less fortunate who are also having the equal rights on the resources what they are using for the industry. Only difference is that you are more enterprising than others. Does the head of a business house neglect his/her family member who has not prospered in his/her endeavors? They have to spend a portion of their profits on CSR (Corporate Social Responsibility) for the inclusive development. The Ministry of Corporate Affairs, Government of India (CSR) brought legislation and made CSR mandatory. Many companies are spending reasonable amounts and the amount spent during 2018–19 is about Rs. 12,000 Crore. The education sector received the maximum funding (38% of the total) followed by hunger, poverty, and healthcare (25%), environmental sustainability (12%), and rural development (11%). The following businesses houses are aligning their business goals with CSR rather than discrete spending through other agencies.

95.5 Hindustan Unilever (HUL) As part of Unilever inclusive efforts, HUL’s Project Shakti was a rural initiative to enhance livelihoods of women. The Project Shakti is part of their FMCG product reach to remote villages through women entrepreneurs. Shakti created women microentrepreneurs to improve their livelihoods. HUL also invested its resources in directly supplying the goods at the village outlets and also training women to run their own business. HUL has about 1 lakh Shakti outlets across 18 states with its sustainable inclusive development through their initiatives related to their own business. A large number of small farmers of tomatoes are being trained on latest agricultural practices such as drip irrigation, integrated nutrient and pest management and also sourcing their products for HUL.

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95.6 ITC Ltd ITC set up village internet kiosks, e-Choupals, which made real-time, up-to-date, relevant information on weather, price discovery, agriculture knowhow and best practices, etc. The kiosks are managed by trained local farmers who help the local agricultural community to access the information in their local language. With appropriate knowledge and services available virtually at the farm gate, farmers have been able to raise productivity, improve quality, manage risk, and earn better prices. ITC is sourcing needs of the Company’s Foods business from farmers directly through its agro-procurement infrastructure to add value to the products of farmers. They are procuring a specific variety of potatoes, one of the critical raw materials in the manufacture of the Company’s “Bingo” brand of potato chips.

95.7 Conclusion Economic growth is important, but reduction of inequalities and poverty are equally vital. The majority of the poor are in rural areas, and their livelihoods depend on farming and allied activities. This paper attempted to include certain experiential cases with sustainable agriculture development and poverty reduction. Implementation of poverty alleviation schemes of the Government with the people’s participation gave better results. Drought mitigating measures like natural resources protection like soil water conservation and integrated farming gave excellent outcomes. Corporates involvement in reducing the post-harvest losses and aligning their business goals to improve the income levels of farmers as part of their corporate social responsibility is adding value to the agro-products. Agriculture is highly location-specific, but these cases are useful to policy makers of the several countries as these indicators are largely mutual for the sustainable development of poor and to moderate inequalities.

Suggested Reading Bhalla, G S and Singh, Gurmail (2009), “Economic Liberalisation and Indian Agriculture: A Statewise Analysis,” Economic and Political Weekly, 44(52). Bhattacharya, B.B. (2003), “Trade Liberalization and Agricultural Price Policy in India Since Reforms,” Indian Journal of Agricultural Economics, Vol.58, No.3. Cecilia Marocchino, A Guide to Upgrading Rural Agricultural Retail Markets, FAO, Rome, 2009. Das Kashab (2001), Endowments and Rural Infrastructure: Issues Today, Oxford University Press, New Delhi. Dev, S. Mahendra (2008), Inclusive Growth in India, Agriculture, Poverty and Human Development. “Toma to: An Economic Analysis,” Indian Journal Of Agriculture Economics, 57(2), pp.197–200. Jalan J. And M. Ravollion (2002), “Geographic Poverty Traps? A Macro Model of Consumption Growth in Rural China,” Journal of Applied Econometrics.

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Joshi P K and A. Gulati (2003), “From Plate to Plough: Agricultural Diversification in India,” Paper presented at the Dragon and Elephant: A Comparative Study of Economic and Agricultural Reforms in China and India, New Delhi, India. Kader, A. A. (2005) (PDF), Increasing Food Availability by Reducing Postharvest Losses of Fresh Produce, UC Davis. L. Harris, W. J. Hoover, C. J. Lindblad, and H. Pfost, An Overview of the Postharvest System: The Food Grain Supply Pipeline (Determining the Interrelationship and Relative Magnitude of Losses) in Kenton L. Harris and Carl J. Lindblad, eds. Postharvest Grain Loss Assessment Methods - A Manual of Methods for the Evaluation of Postharvest Losses. American Association of Cereals Chemists, 1976. Prahalad, C.K. and Stuart L. Hart (2002), “The Fortune at the Bottom of the Pyramid.” Rao, C.H. Hanumantha, (1971), “Uncertainty, Entrepreneurship and Sharecropping in India,” Journal of Political Economy, Vol-79,N0–3. World Bank (2000), “India: Reducing Poverty, Accelerating Development,” A World Bank Country Study, Oxford.

Part VIII

Multilateral and Bilateral Relations

Chapter 96

Impact of Chinese Investments and Financing on Economic Growth and Inclusive Development in the Horn of Africa Ali Issa Abdi

96.1 Background The Greater Horn of Africa (HoA) consists of 8 countries1 in one of the African Union recognized Regional Economic Communities (RECs) in the continent. The HoA region possesses considerable advantages including its strategic location, the large size of landmass with ecological diversity and extended coastal lines, and youthful large population with diverse and rich cultural heritage, and vast agricultural and mineral resources. The region has about 7000 km of coastline2 and a population of about 275 million in as of 2018, according to the World Bank data. Average population density is relatively low, at 30 persons per square km,3 with considerable variations among the countries. These represent tremendous opportunities for business investment ranging from agriculture and agro-processing; manufacturing, tourism, transportation, and logistics; extraction of natural resources; and energy generation, transmission, and distribution, to mention some. The region’s large population size and growth, with a youth bulge also offers an opportunity. The large youthful labor with adequate education and skills ensures a productive labor force, while it also increases pressure on the environment, the job market and social services delivery.

1 The Inter-Governmental Authority for Development (IGAD) region consists of Djibouti, Eritrea, Ethiopia, Kenya, Somalia, South Sudan, Sudan and Uganda. 2 Its coastline stretches from the Indian Ocean, Gulf of Aden and the Red Sea. 3 Compared to 65 per km2 in ECOWAS (the West African Regional Economic Community).

A. I. Abdi (B) Horn Economic and Social Policy Institute, Addis Ababa, Ethiopia e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_96

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At the moment, the region is challenged by prevalent poverty, frequent droughts, insecurity in several countries, and high urban unemployment and rural underemployment, especially among the youth. The challenges faced include large numbers of internally displaced people and considerable out migration, partly driven by insecurity and droughts and partly by limited job opportunities failing to match the demands of the labor force. These are interrelated and interact with each other. Environmental degradation and natural hazards are becoming more acute because of climate change. With a high proportion of the population dependent on rain-fed agriculture, the region is highly vulnerable to climate variability and adverse change. There is a role for evidence-based policy, cooperation, and action at both national and regional levels to minimize the risks and increase the likelihood of turning the challenges into opportunities. Effectively dealing with these would take economically, socially, and environmentally sustainable economies that are equitable and inclusive The HoA economies have to be transformed. But it has huge financing requirements that are largely beyond domestic capacities both at individual country level and collectively as a region. Faced with persistent and large saving-investment gap securing multilateral and bilateral funding and attracting FDI remains important for the sub region. Not only the size but also the type & flexibility, quality, distribution, and maturity and other terms and conditions of financing also matter. Over the past two decades or so, China has emerged as a credible option not only as source of finance but also technology and know-how, entrepreneurship, relatively affordable equipment and machinery, and intermediate inputs, capacity building support, as well as markets for Africa’s products. A recent study by McKinsey concluded: In a matter of two decades, China has become Africa’s biggest economic partner. Across trade, investment, infrastructure financing, and aid, there is no other country with such depth and breadth of engagement in Africa. The Chinese “dragons”—firms of all sizes and sectors—are bringing capital investment, management know-how, and entrepreneurial energy to every corner of the continent—and in so doing, they are helping to accelerate the progress of Africa’s “lions,” as its economies are often referred to. The recent allocation of $60 billion 3-year funding for Africa under the Forum of China-Africa Cooperation enhances China’s credibility as source of development finance. However, Chinese engagement in the continent has also attracted criticisms of sorts, ranging from outright labelling of China as merely seeking resources and cherry picking the benefits of exploiting market opportunities; blaming it for using the African continent to dump cheap products; and pushing financial terms that are getting countries highly indebted. Unsubstantiated criticisms aside, the full extent of the opportunities and limitations of Chinese investment and financing, and its role and Impact on Economic Growth and Inclusive Development in the Horn of Africa (HoA) requires further review and study.

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Although some relatively important studies have been done, the depth of treatment of issues lack important regional and country variations and are not contextualized. For example, some studies focus on countries that have been major recipients/destinations of Chinese finance/investment and exclude countries that badly wanted to attract similar funding but haven’t or whose institutional or policy contexts would not allow them to replicate what the successful countries did to attract Chinese investment and finance. In this context, this assessment will focus on the role of Chinese investment and finance in the HoA countries explicitly taking into account the development strategies and priorities of two diverse sets of recipient countries: those with high economic growth rates and broad good performance and the fragile states of the sub-region.

96.2 Assessment of Chinese FDI in the HoA The review of Chinese external financing and Foreign Direct Investment (FDI) in the HoA will focus on what the recipient countries (both government and private sector) have done to fully exploit the opportunities Chinese finance and investment offer while minimizing any undesired effects in order to enhance their economic growth and inclusive development potential. In particular, the cases of select successful countries and the fragile states and the requirements for undertaking country level efforts are examined to improve collaboration, attract finance under favorable terms and conditions, and encourage financial and investment flows in high priority uses that support the countries’ economic transformation. The HoA region, includes two set of countries: the good performers and the fragile states. Thus, the region contains some of the fastest growing economies in Africa, which include the four countries of Djibouti, Ethiopia, Kenya, and Uganda. These countries in particular are very attractive to Chinese investments due to the geographical location of the region, and because of their economic growth potential, their growing consumer markets, cheap labor costs and abundance of natural resources. The real economic growth rates in these four countries averaged in the range of 5.3–7.6 % in 2017 and 2018. Among the Greater HoA, the four countries termed good performers have received large inflows of Chinese investment and finance. Djibouti has been a major recipient of Chinese investment and projects financing, including the Doraleh container terminal, the Doraleh multi-purpose port, the international free zone industrial parks operation, and rail and road projects linking the country with Ethiopia. Also, a notable example is Ethiopia, the fifth largest recipient of Chinese FDI in Africa, which attracted billions of Chinese foreign loans and investments in ambitious infrastructure projects such as the Ethio-Djibouti Railway, the Addis Ababa transit railway and ring road, modern storage facilities of Ethiopian airline, a number of inter-city road projects, and industrial parks development in many cities, to mention but a few.

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Kenya is also among the top 10 countries in Africa benefiting from China’s investments and finance. China has financed a number of large scale infrastructure projects in Kenya, namely the construction of Nairobi-Thika Superhighway, Mombasa-Nairobi Standard Gauge Railway, and Lake Turkana-Suswa power line transmission station. Uganda has received sizable Chinese investment in the last decade plus. These investments include five industrial parks developed with Chinese investment; two large dams and hydropower plants, at Karuma and Isimba; three big road construction projects, including the Kampala-Entebbe expressway; and development of oil fields in the Albertine Rift. There are major Chinese investments in agriculture, industry and tourism that have generated considerable employment in the country. China’s presence in Djibouti, Ethiopia, and the greater HoA is part of its Belt and Road Initiative (BRI) that forms part of its long term foreign and economic policy strategies to safeguard its vital diplomatic and trade interests in the wider Eastern Mediterranean region and gain unfettered access to European markets. China’s emergence as world economy power and its development and foreign relations approach is generally perceived positively in many African countries. Some observers emphasize China’s diplomacy of non-interference, mutual respect, and friendship with Africa together with its increased trade and investment as a sign that “China’s presence in Africa should be seen as that of a partner in economic development.” It is evident that China’s engagement in the HoA brought in much needed FDI and finance especially in economic infrastructure projects, which would otherwise be too costly for these developing countries and supported the region to grow their internal economic connectivity and generating new opportunities for jobs, economic growth and inclusive development. The main objectives of attracting Chinese investment by the more successful HoA countries were to strengthen their basic transport economic infrastructure, and power generation and distribution and generate higher sustainable growth. Also, of considerable interest in these countries was to have access to high technology, increase employment, acquire know-how, increase foreign exchange earnings through exports generation, and to benefit from both backward and forward linkages of the productive chain. The good performing countries have viewed China’s increased investment and financial support as a means to foster their enhanced inclusive development and poverty reduction for opening up these economies to international markets and attaining sustainable transformation. More specifically, the cooperative win-win development was envisaged to bring proportional benefits through trade flows, technology transfer, and integration in global value chains, which otherwise these countries would not have access to before entering into these new relations. Undoubtedly, Chinese investments and external financing in the well performing countries of the HoA have been indispensable part of their economies high and sustained economic growth achieved in recent years. Such investments have contributed to providing world class infrastructural development, injected much needed capital, introduced new technologies, modern management know- how, and enhanced demonstration effects into these economies.

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The countries that have benefited from these Chinese investments have been in particular those that have synchronized their own national strategies with the sought-out Chinese investments and external financing in such way as to have been committed to addressing the principal binding constraints on their national economic transformation. The productivity gains and spill over positive effects of these investments have permitted these good performing countries to leverage the contributions made by the Chinese direct foreign investment and external public financing. The broad commentary of the policy makers in the region and few academic studies reviewed in this assessment demonstrated that the good performing countries in the HoA substantially benefited from the Chinese cooperative investments and financing. The Chinese investments in the HoA appear to be properly aligned with the South-South cooperative strategies and goals, of developing trade and investment linkages that are of mutual benefit to Africa and China.

96.3 Concerns Expressed on Impact of Chinese Investments and Financing Some concerns expressed by academics and policy makers in the HOA and outside on the modalities of Chinese investment and finance flows into the region are worth noting. These exclude the run of the mill politically motivated commentary and criticism of Chinese/Africa cooperation, which are espoused by “competing interests and expressed in hegemonic narratives.” But such misguided narratives and fear-mongering commentary aside, there are objective and fact-based concerns on deficiencies noted with regard to the terms and conditions of Chinese investments and financing flows in the HoA (and elsewhere in the continent) that merit consideration and assessment, including the following: (1) China is only interested in rich African countries with abundant resources. The concern among the academic community and the policy makers of fragile African economies is that the investment and financial resources from China to Africa further aggravate the dipartites within the continent’s haves and have nots. The top African country recipients of Chinese finance and investments are relatively the more developed countries and /or those that have proven minerals or hydrocarbons in abundance. According to those expressing this concern, the income disparities within the continent would further widen and unlike the model development of China itself will not contribute to considerable poverty reduction in the continent. (2) The fragile HoA economies do not benefit from access to Chinese investment and finance. The principal fragile economies in the HoA include Eritrea, Somalia, and South Sudan, largely on account of prolonged economic instability and often associated with insecurity attributed to inter-state or intra state conflicts. There has been some investment in the oil and gas sector in the Sudan and South Sudan by Chinese firms, but interest in other economic sectors in the fragile countries

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has been lacking. A case in point is the long standing relationship of China with Somalia. Despite its diplomatic presence in Somalia since 1960, and evidence of Chinese aid to Somalia in many essential infrastructure projects between 1970 and 1990, Somali observers posit that China has not made any significant contribution to state recovery and reconstruction efforts in Somalia in the last 28 years of state fragility and ineffective state institutions. The evidence of fragility and ineffective institutional governance in Somalia clearly is a contributing factor to low engagement by China, but mutual benefits and joint cooperation could be explored at an early stage of recovery, as with some other bilateral engagements. (3) Envisaged technology transfer of Chinese investments ought to be strengthened. Policy makers and academics have argued that success of considerable home grown technological progress in China in the last 3–4 decades will permit the well performing HoA countries to tap into this know-how and associated technology in a quick manner. The over whelming evidence however is that most of the skilled labor and advanced equipment that built the base of China’s investment in Africa has remained in China and has not contributed to considerable transfer to HoA nations. A case in point is that most of the large investments in the railways industry in the HoA countries has not led to initiation of a heavy equipment manufacturing base that is essential for the sub region to develop and eventually meet its important transport requirements locally. It needs to be underlined that host countries will not be able to capture the technological transfer benefits associated with foreign direct investment until they achieve a certain threshold in terms of educational attainment, local technological capabilities, and viable industrial development, which should all be accelerated. (4) There is inadequate consideration for environmental consequences. The terms and conditions of China’s negotiation tactics of offering loans to HoA are reported to lack adequate consideration of all relevant matters and are limited in transparency and accountability with regard to adverse externalities. Observers point to inadequate and at times an overall lack of robust feasibility studies, cost-benefit analysis and environmental impact assessments on Chinese FDI in big infrastructure projects prior to loan agreements. The projects’ execution is conducted with the no external supervision, but with the entire processes from inception, technical and financial appraisals, engineering and construction, and final approval performed in house. (5) The risks of non-sustainable debt accumulation should be avoided for vulnerable economies. Some HoA countries have accumulated high levels of public debts attributable partially to Chinese loans, raising the question of how such loans may ultimately be repaid, at what cost, and what sacrifices the governments may have to make to repay these loans. Some observers consider the accumulation of such large debts as unwise and unsustainable on the part of the HoA countries and African governments at large. It is the responsibility of governments to ensure that the borrowed funds are used for productive investments that generate additional productive capacity, to add to foreign exchange earnings and add value to debt service payments. Both the lending and borrowing countries should

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maintain caution and ensure debt obligations would not lead to default and debt crisis. Certainly, they would both share the blame if projects considered “vanity” expenditures lead a country to quick and early debt distress. Responsible policy makers in the HoA countries (and elsewhere) should be wary and vigilant that access to funding and its terms and conditions should be based on a country’s capacity to maintain debt sustainability in the long run. (6) HoA countries could benefit from Chinese FDI in economic infrastructure projects of all sorts, in energy production and distribution, and in the manufacturing sector. Nevertheless, they must learn from the concerns and shortcomings of past Chinese investment and financing flows in this subregion and other countries around the globe, particularly the need to establish formal, transparent, mutually beneficial trade and economic cooperation agreements, taking into account the impact of the investment in the local economy, environment, job creation and labor conditions, immigration and, technology development.

96.4 Conclusions The purpose of this policy note is to explore the important economic relationship that has developed between China and select countries in the Horn of Africa subregion, as it relates to the impact of Chinese investment and financing on economic growth and sustainable development in these countries. The evident conclusion of this assessment is that the relevant HoA countries benefited considerably from the FDI and the financing flows that they received in terms of the improved economic infrastructure and its impact on economic growth. In particular, the countries that properly utilized the Chinese financing and FDI as an integral part of their strategic growth transformation plans have achieved considerable success in their development efforts. The China and Horn of Africa economic relationship and associated trade linkage is assessed as important for both parties, and as positively contributing to the economic transformation of the sub region. Accordingly, such linkages are envisaged to endure, provided that the objective concerns expressed by the policy makers and unbiased academics are addressed forthwith to enhance the efficacy and effectiveness of the investments and financing flows to the countries of the HoA, and by extension to other similar situations in Africa. The principal concerns to be addressed to enhance the impact of Chinese investments and financing for growth and sustainable development are: (i) China policy makers and corporations should not only engage with the better performers, but also with the fragile economies that have yet to benefit from access to Chinese investment and finance, so as to have more comprehensive impact on inclusive and sustainable development in the sub region; (ii) envisaged technology transfer of Chinese investments is modest and should be strengthened; and (iii) the risks of non-sustainable debt accumulation should be avoided for and by the vulnerable economies (Table 96.1).

766 Table 96.1 Top recipients of Chinese Foreign Direct Investment in Africa, (USD Million) in 2017

A. I. Abdi Country name

2017 FDI

South Africa

7473

Congo, Dem. Rep.

3884

Zambia

2963

Nigeria

2862

Angola

2260

Ethiopia

1976

Algeria

1834

Zimbabwe

1748

Ghana

1575

Kenya

1544

Chapter 97

He US and China Must Manage Their Competition Over Advanced Technology Cliff Kupchan

Competition between Beijing and Washington for supremacy in advanced technology is now in full swing. On September 27, Ren Zhengfei, the chief executive of Chinese networking equipment giant Huawei, claimed the company had begun producing its first 5G mobile network base stations without US parts. This was the inevitable result of the Trump administration’s decision in May to restrict access for China’s most important global technology company to US hardware and software on national security grounds. It marks an important milestone, and a key test, in what is the growing US-China Technology Cold War. While it is not yet clear whether Huawei can remain globally competitive in either network equipment or mobile handsets without easy access to US innovation, particularly the technologies and software required to stay at the cutting edge in semiconductors and mobile operating systems, Huawei seems determined to make a go of it. Even if the company manages to get some relief from the Trump administration as part of an eventual settlement in the US-China trade fight, powerful political forces are likely to drive more US and Chinese technology firms to design their products in ways that avoid each other’s technology. Washington is deeply concerned about risks to national and economic security stemming from China’s technology rise. The administration of US President Donald Trump remains determined in its campaign to decouple the US and Chinese technology sectors and to drive sensitive technology supply chains out of China. Beijing will continue to respond to US pressure by pushing for self- sufficiency in advanced technologies. This article in part draws on Cliff Kupchan and Paul Triolo, “A third-party solution to US-China tech war?” in The Straits Times, June 1, 2019. Mr. Triolo is director for geo-technology at Eurasia Group. C. Kupchan (B) Eurasia Group, New York, USA e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_97

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It’s this new tech Cold War, more than the trade logjam that’s currently dominating headlines, that will threaten global prosperity and stability for decades to come. While there’s still time, a coalition of committed nations and companies should establish a new forum to manage this new, twenty-first century geopolitical competition.

97.1 The Competitive Struggle and the Risks The US and China increasingly view prowess in artificial intelligence, robotics, quantum computing, 5G communications, and other technologies developed by their private-sector tech companies as a matter of economic and national security. Already, both sides are seeking advantage by limiting the export of knowhow to the other and by tightening restrictions on investment in their sensitive tech sectors. The prize is power in tomorrow’s international system. Control of the international marketplace is at stake because advanced technology will help run the global economy. Technology supply chains and dependencies will anchor future alliances and trading relationships. Also, leadership in technology will give an edge on the national security front. The Trump administration holds that the US innovation base and its military applications are central to protecting the country’s future security. Chinese leaders, similarly, believe that civilian technological advances go hand-in-hand with leaps in the military sphere. The Huawei episode shows that the future is upon us. The US placed restrictions on Huawei primarily because of fears the Chinese government could use the company to penetrate and disrupt vital telecommunications networks around the globe. That would undermine US national security. The US also seeks preeminence for its firms in the next wave of emerging technology applications that will be built on top of 5G networks once they are fully rolled out, a complex and expensive project that is just getting started and will take up to a decade. Washington is resisting efforts by Beijing to help Chinese firms take the lead in this enormous new field of technologyenabled economic competition, which will encompass everything from smart cities to driverless cars to new, multi-billion-dollar industries that no one yet knows of. More broadly, the Trump administration is seeking to decouple the US and Chinese economies, especially in advanced technology sectors. Washington’s moves to cut off Huawei from access to US technology and ban the use of Huawei equipment in US networks while pressuring allies to do the same are only the start. Increased US scrutiny of foreign investments in domestic companies that work on sensitive technologies, have access to critical infrastructure, or traffic in personal data is already having a chilling effect on Chinese investment in the US. Chinese FDI during 2018 was down nearly 90 percent compared to 2016 according to the Rhodium Group. Deals are being blocked, and some transactions have even been unwound as the Committee on Foreign Investment in the United States (CFIUS) takes a harder line and expands the types of deals it reviews. The next step in the US effort to tighten its grip on advanced technologies is to develop lists of “emerging” and “foundational” technologies that are subject to

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enhanced export controls. These are likely to include important semiconductor and related manufacturing and design technologies, as well as AI-related services and components. This will further clamp down on the flow of US technology know-how to China and other countries that the US deems a threat to its “national security innovation base.” This is a dramatic departure from the hands-off approach to digital technologies that has driven US innovation in the decades since the end of the original Cold War. In effect, the Trump administration has drawn a bright red line around Silicon Valley, declaring significant parts of the US innovation system off-limits to its geopolitical rivals, especially China. While the Trump administration has been driving the policy, this new, more aggressive approach to technology control is enshrined in legislation, has strong bi-partisan support in Congress and will outlast the current administration. China, in response to US pressure, is creating an unreliable entities list and will continue to enforce laws such as the 2016 Cybersecurity Law in ways that could hinder market opportunities for US firms, particularly if trade talks go back off the rails. China is also doubling down on domestic innovation. President Xi Jinping recently described China’s drive towards technology independence from the US as the beginning of another “Long March.” As attitudes on both sides harden, it will become more difficult to reverse course. The current tariff war will accelerate this tech competition. The ill will generated from that battle will speed and deepen the long-term tech confrontation. On 11 October, the US and China apparently reached a “mini-deal” under which China will buy more agricultural goods and undertake certain reforms, while the US will defer raising tariffs. But the chance of a comprehensive deal is very low, as major disagreements separate the sides on key issues. The tariff war will very likely further sour US-China relations and stoke competition over advanced technology. For other countries, the current battle over the fate of Huawei and 5G is probably a preview of the future, in that Washington or Beijing for national security or economic reasons will seek to restrict each other’s activity, not just at home, but in third-country markets. In short, nations and their firms will increasingly have to choose between the US and China for sales and purchases in the technology sector, not just for 5G, but potentially also for the whole suite of applications and services that will soon be built on top of full-standalone 5G networks. The net effect will be lose-lose for everyone. During the past three decades of the digital revolution, technology cooperation boosted the quality of innovation globally. US technology companies and consumers have benefitted enormously from the development of globalized technology supply chains that allow them to outsource increasingly complex manufacturing and final assembly to China. Sales of US semiconductors and software to China’s increasingly capable high-tech firms, in turn, generates revenue that helps fund and drive the next generation of innovative US technology products and services. The benefits to Chinese firms are also huge: They gain technology know-how, jobs, and investment that allows them to continue to move up the high-tech value chain. Over the past decade, buoyed by its enormous internal market and fierce competition between private sector technology firms, China has become the only

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other country in the world to give rise to massive digital platform companies capable of competing head-to-head with the best of Silicon Valley in fields such as cloud computing. These companies, along with a growing number of high- powered Chinese AI startups, are at the forefront of emerging applications that combine big data and AI, such as smart cities, advanced manufacturing, and driverless cars. Along with producing networking equipment and mobile handsets, Huawei is increasingly producing cutting-edge mobile chips, with the help of technologies that it buys from US and other global suppliers, who recycle the profits from these sales back into R&D. On the current political trajectory, this beneficial feedback loop will be disrupted. For China hawks in the US who believe that Beijing is working methodically to undermine US economic and national security, that is a desirable outcome. But the arguments in favor of decoupling, which tend to focus on the potential for China to commit espionage or sabotage by embedding backdoors in Western technology products or network infrastructure or assume that China is on the verge of vaulting past the US in key fields like AI, quantum computing, or advanced semiconductors, often take a too narrow a view of the potential risks and costs. They also fail to account for how today’s global innovation ecosystem actually works in Silicon Valley and other tech hubs in Europe and Asia, where US and Chinese firms are highly interdependent. The competition over advanced technology is inflicting great costs and creating new risks. US firms are already moving some technology supply chains out of China in response to US tariff and non-tariff measures aimed at Beijing: some 40 percent of US companies in China are either moving manufacturing facilities outside of the country or considering doing so, according to a 2019 study by AmCham China. As this trend accelerates, it will seriously complicate international business. Manufacturers will incur increased costs as suppliers are forced to invest in redundant manufacturing capacity and rebuild logistics networks and manufacturing processes that have been honed in China over decades. Tech advances will also become more expensive as the US and China pursue the same technologies, such as 5G, but separately, reducing economies of scale and, in the long run, potentially leading to inter-operability issues if technologies and related applications end up being built to different standards. Along with creating wasteful duplication, this will increase transaction costs in the global economy. Increasing restrictions by both sides on the flow of talented people will further impede beneficial innovation. For the US, fewer STEM visas for Chinese and other foreign students will prevent the flow of very bright tech experts to US firms. Regarding China, the government’s newly restrictive approach to granting visas means Chinese firms and US companies with research operations in China will find it harder to access US know-how. A raging US-China tech cold war could also have negative effects on global security by further reducing prospects for a coordinated global approach to issues such as AI safety or the use of AI in military applications, including lethal autonomous weapons systems. Less communication between leading-edge firms and researchers

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would increase the risk that either the US or China makes an unanticipated breakthrough in a strategic technology such as quantum computing. The risk here is not so much a quantum breakthrough per se, but one that catches the other side off-guard, undermining military and other essential encryption with immediate, destabilizing effects on global security. The temptation to engage in malicious cyber activity would also increase during a protracted technology cold war, as both sides increase the use of sophisticated offensive cyber operations to achieve political and economic objectives. Ultimately, a permanent US-China technology rift would restrict beneficial exchanges of technology, investment, and human capital that drive new technology advances. That will hurt innovation globally, leaving everyone worse off.

97.2 A Potential Solution: A New Forum to Manage Competition These downsides of the shift towards zero-sum US-China technology competition have tended to receive short shrift in the current policy debate. To avoid them, likeminded nations, drawing on the expertise of relevant firms, should establish a new forum to manage competition in this important new domain. The effort could be led by the United Nations with backing from the European Union, as support for this effort would likely be strong in both organizations. China might initially resist any “infringement on sovereignty” that this new organization might bring. But concern over strategic technology competition is deep in Beijing, and it would probably over time join the effort. The Trump administration would be instinctually opposed to any new institution, but international suasion could ease the US stance. This forum’s top priority should be to develop norms to govern policy. States should not pursue linkages between artificial intelligence and weapons, as this nexus risks the catastrophic loss of human control over weaponry. Nations should not pursue the use of quantum computing to break other states’ ability to encrypt, since the ability to protect financial and critical infrastructure-related data is necessary for nations to feel secure. Reduction of IP theft for commercial gain will also be an important goal, as the practice stokes mistrust between states. This would also be the forum to address human rights issues stemming from the use of big data, facial recognition, and other AI applications. Finally, states need to work toward a shared concept of when a technology issue is a national security relevant, and one that is not overly expansive. Nations need to curb the practice of restricting technology flows on security grounds, or beneficial forms of cooperation will dry up. This will involve acknowledging that the tremendous complexity and interdependence of modern technology ecosystems means that some important security risks, such as the vulnerability of 5G networks to hacking and sabotage, will never be

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eliminated completely. But they can be managed intelligently, though a combination of rigorous scrutiny, diplomacy, and globally agreed consequences for bad behavior. Security evaluation centers operated by the UK and Germany, in which technical experts continuously examine equipment and software for security vulnerabilities, including potential backdoors, are one promising model for enhanced supply chain security. Governments could also consider requiring companies that fail to meet certain trustworthiness or transparency criteria to pay a significant security deposit, to be held in escrow, before being allowed to supply technology used in national infrastructure. This would allow the digital economy to continue to develop without too many “Huawei episodes” that slow innovation. After building consensus on norms, nation-states should create a new institution with the power to enforce them and govern technology competition. The new body could take different forms, any one of which would be a significant advance over the current void. The “lightest” option would involve no formal institution, and voluntary membership and compliance. A coalition of nations would take the lead in convening meetings or workshops focused on defining norms, establishing best practices for supply chain and cybersecurity, and ensuring that telecommunications networks and other important digital infrastructure are built to be as resilient as possible against the full array of cyber threats. A second option would involve the creation of a formal institution, but one based on respect for sovereignty and non-interference in the domestic affairs of its members. It would have a structure and operational style similar to that of ASEAN. Nations could opt to join or not, they would create a formal institution, and decisions would be made by consensus. I support a third option, which is the most formal and binding one. The International Atomic Energy Agency (IAEA) would be the model for this new body. A UN-led international coalition should exert strong pressure on all states to join the body, which would be staffed by an international team of technical experts with unimpeachable credentials and special diplomatic status. Decision- making should occur by vote, and observance of approved norms should be mandatory. Most importantly, the institution would be empowered to police rules against illicit behavior. It would have inspection rights for suspect sites, whether operated by governments or private companies, if it has compelling evidence that a nation or company is violating agreed norms. A punishment regime involving sanctions would be available to use against violators. The IAEA is a compelling template because it operates effectively in a highstakes, politically-charged environment in which parties distrust each other and even work covertly to develop illicit capabilities. This model (call it distrust and verify) would have to be adapted to the unique problems of digital technologies: verifying that a state actor has introduced a hidden backdoor into 5G base station is a very different challenge compared to detecting whether a nuclear facility has started enriching weapons-grade uranium. It would need to be generously funded and be able to secure cooperation and transparency from both the private sector and governments. The mission of this organization would ultimately be to ensure compliance

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that leads to interoperability and reduces friction in the sphere of global technological innovation. This is strong medicine, and parts of this approach will be tough for both China and the US to swallow. But the alternative—muddling forward in ways that inexorably lead to the dismantling of the global innovation system—would be far worse.

Chapter 98

Relations Between Chile and China: Solid Political Foundations and Pioneers in Bilateral Cooperation in South America Ennio Vivaldi

In 2020, Chile and China will celebrate fifty years of uninterrupted diplomatic relations, an accomplishment in which Chile moved ahead of its region. Indeed, in the early 1970s, Chile was the first South American country to establish diplomatic relations with the People’s Republic of China (PRC) and the second in Latin America after Cuba. Along the same lines, it was also the first country in Latin America to support the entry of the PRC into the World Trade Organization and then in 2004 the first in the region to recognize the Asian giant as a market economy. Besides, in commercial terms, Chile was the first country in Latin America to sign a free trade agreement with the Asian giant. These milestones have become a fundamental part of Chinese-Chilean relations and, without a doubt, have undoubtedly contributed to consolidate China as one of Chile’s great partners. The strengthening of Chinese-Chilean relations has been favored by the adherence of both countries to the principles of respect for the principles of open trade, the promotion of multilateralism and a more multipolar world. Both countries support the cause of world peace in international organizations and participate fully in the Asia–Pacific region, which they observe as one of the main development poles of the new global governance. Among the most remarkable characteristics of the Chinese-Chilean ties is the willingness of both states to work together in the long term, understanding that cooperation favors a higher level of development in both nations. It is with this perspective that in more than four decades of diplomatic relations, Chile and China have progressively deepened their relations in all areas. The creation of institutional links and the intensification of high-level visits allowed the incorporation of new work areas. This led in 2016 to elevating the bilateral relationship to a comprehensive strategic partnership and new memoranda were signed to deepen the free trade E. Vivaldi (B) University of Chile, Santiago, Chile e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_98

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agreement that had been in force for ten years. This progress shows how the links between the two nations are diversifying and incorporating fields as far away as the field of outer space, biotechnology and the development of new materials equipped with high technology. Chile has based its foreign policy towards China on the principles of mutual respect for sovereignty and territorial integrity, as well as on an invariable support for the “One China policy.” The maintenance of dialogues through countless official visits and the generation of consultation mechanisms among the Ministries concerned, has ensured stability and sustainability to our relationship. For the past 28 years, every Chilean president, regardless of their political ideology, has made at least one official visit to China. At the same time, Chile has signed different cooperation agreements to institutionalize the relationship between the two countries (comprehensive strategic partnership agreements and free trade agreements among the most important). In the course of these last decades, we have shared in the international organizations various initiatives that promote multilateralism, the conformation of a multipolar international system, and a fair international economic order. In this regard, Chile has been actively interested in the Belt and Road Initiative as a complementary proposal for the Asia Pacific region, which allows to reduce geographical and communicational barriers through the development of greater connectivity and infrastructure. In the recent visit of President Sebastián Piñera, in May 2019, the Chilean government signed a new understanding agreement that facilitates the participation of our country in the initiative proposed by China. In few areas, the importance that this relationship is more visible than in the commercial and economic sphere. Chile has been, in Latin America, one of the countries that has benefited most from trade relations with China. The early free trade agreement (FTA) between the two nations has allowed Chile to have priority access to this Asian market, in addition to importing high-tech products at a competitive price. Since 2017, after a positive evaluation of the FTA by both parties, a deepening phase began, in which Chile seeks to continue being a provider of primary resources, but also to attract new Chinese investments, especially in infrastructure and in the technological development of the mining and agriculture. On the other hand, Chile seeks to position itself as a commercial platform for the entry of the main brands of Chinese products and services to the South American market. Thus, China has become the number one destination market for Chilean exports. In the same way as in the course of recent years, our country has become an important recipient of investments from China. According to figures from InvestChile, the Chilean government’s investment organization, the investment flows went from USD 310 M in 2016 to more than USD 1800 M in 2018. It is important to mention here a series of measures and agreements that seek to encourage trade and facilitate the financial relationship. One of them is the Shanghai Free Trade Pilot Zone. In 2015, the authorities of both governments established a pilot platform that allows small and mediumsized Chilean companies to connect directly with the Chinese market through a free trade zone established in Shanghai. This initiative, which includes logistics and port facilities, is positioned as an incentive for the liberation of the Chinese market and

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the attraction of new investments. In the case of Chile, this initiative is part of the tools available for Chile to operate as an export platform. According to the Chinese authorities themselves, this area functions as an experimental space to test new ways to promote the development of countries through international trade. Similarly, in May 2015, in the framework of the visit of the Prime Minister of China Mr. Li Keqiang to Chile, financial cooperation agreements were established between the central banks, with the aim of facilitating the use of the Chinese currency in international transactions between both countries. A series of agreements in this field have allowed the establishment of the first financial center of the Chinese currency in Latin America in Chile, positioned as a financial platform for its internationalization in the region. This initiative opens to China the possibility of increasing its financial cooperation and investment throughout the region using Chile as a bridge. This has undoubtedly been a path of successes and constructive encounters. However, they should not prevent those in the university field with the obligation to nurture a long term vision to society, from observing the new opportunities and challenges that open up to the two countries. In the commercial field we must make a leap forward. Today the need is imposed to transform the commercial exchange based on an export of Chile in raw materials into one in which Chinese investment and technology transfer facilitates a transformation of the Chilean economy. Let us say it in a clearer way. Our trade exchange is uneven. Our exports concentrate mainly in copper and fruit, raw materials that until now we have tried to insert in higher value chains with only limited success. There is a consensus among us that this pattern requires a process of transformation that avoids the trap of economic re-primarization and the “center-periphery scheme” that characterized the relationship of our economy with the industrial centers for more than a century. We need to build a new strategic vision that fully benefits from the transformative role that China is playing in the technology revolution, in matters like artificial intelligence and scientific research. In that respect, the role of scientific development and thus of the universities is essential. Chile and China have increased their scientific cooperation in a very important way. In 2015 both countries signed a memorandum of understanding (MoU) between the Chinese Academy of Sciences (CAS) and the National Commission of Scientific and Technological Research of Chile (CONICYT) in order to encourage the collaboration of researchers from Chile and China in joint initiatives, it specifically seeks to encourage the participation of Chilean physicists, engineers and specialized technicians in research projects and programs of common interest, which includes scientific cooperation in areas such as astronomy and astrophysics; physical natural disasters; polar research; and renewable energy. An example of this is the South American Astronomy Center of the Chinese Academy of Sciences (CASSACA), a platform for collaboration in astronomical research and development of technologies related to the needs of South America. In July 2018, the astronomical center opened its first office in the Antofagasta region, particularly at the Universidad Católica del Norte (UCN), with which they plan to build the first astronomical observatory with Chinese technology in Chile on the Cerro Ventarrones, which will allow, as well as with the other agreements with international

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observatories installed in Chile, to ensure 10% of the time for the exclusive use of Chilean researchers. In the same way, the first Data Center for the development of regional astro- informatics has been established. This data center is based on the cooperation agreement signed in 2015 between the Chinese Academy of Sciences, the Chilean branch of Huawei and the Technical University Federico Santa María (UTFSM) and consists of a modular data center which has a capacity of 1 PB. The creation of new cooperation instances has positioned Chile along with China as a regional platform for scientific and telecommunications development. Likewise, something similar is developing in the cultural arena. The Regional Centers of the Confucius Institute for Latin America promote and coordinate from Chile the study of the Chinese language and culture at the Latin American level. The Santiago office is positioned as a strategic platform in the processes of deepening the cultural relations of the region with the People’s Republic of China, coordinating training activities and publishing educational and cultural materials for the region as a whole. The University of Chile has been at the center of the collaboration with Chinese institutions. During the last two decades, several scientific and technical cooperation projects have been consolidated, allowing the development of close relations in various areas of knowledge, such as agriculture, international studies, economics, and public policies, among others. The cooperation in astronomy stands out, culminating in the establishment in 2013 of an astrophysical group in Chilean territory, called the “China- Chile Joint Center for Astronomy (CCJCA)”, located in Cerro Calán as a pole of Sino-South American development. Today the door is also opened to endless new interactions in with social sciences and humanities, education, arts and, at the same time, data science, engineering, technology and especially innovation, as a fundamental mechanism to move towards a better living for mankind. It must be emphasized that from the perspective of the University of Chile, it is necessary to promote a relationship that, beyond economic exchange, strengthens an association in Science, Technology, Education and Culture, generating innovative dynamics that have as a main goal finding solutions to the challenges and opportunities that our societies face. This implies associating faculties, opening new agreements, and generating opportunities so that master’s and doctoral students at Chinese universities and of the University of Chile can develop their studies in both countries and thus promote and stimulate the academic and cultural bonds. In this effort to strengthen reciprocal cooperation, the University of Chile has worked together with the Chinese Academy of Social Sciences (CASS) signing a MoU on 2016, with the purpose of exchange of academic materials, publications, and research, and also promoting the mobility of students and professors. In parallel the University has strengthened its ties with the Chinese Academy of Sciences (CAS) and has become one of the founding members of the International Alliance of Scientific Organizations (ANSO) in 2018, as part of the “Belt and Road Initiative”. Similarly, the University has proposed to inaugurate a Chinese Studies Center this year, under the Institute of International Studies; implement a postgraduate program of Chinese

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language, through the Center for Languages and Cultures of the World, under the Faculty of Philosophy and Humanities; and to prospect the establishment of joint laboratories in areas of special relevance for both countries. All these cooperation and mutual knowledge initiatives are crossed by a legitimate objective that must be, not only institutional, but national: that is, to define the interests of Chile in its relationship with the People’s Republic of China. What does our country want to achieve from its relationship with China? How can we move forward in an associative relationship that strengthens both our national capacities? The type of development we will have during the twenty-first century depends largely on the answer we give to these questions. And although the responses to these questions come from many sources, the universities have a key role in its definition and most especially ours. Let me mention some areas in which our cooperation should increase. As both nations face common problems, such as the scarcity of water in some regions, energy constraints and pollution problems, Chile should multiply its academic exchange and scientific collaboration with China, so that these instances give rise to new forces that can continue deepening our relationship. In the same way, Chile has the opportunity to position itself as a development center for research, development, and innovation projects. In the last five years, a more active Chinese foreign policy has been observed in the generation of platforms both in that country and abroad to seek solutions to global problems. In this context, there is an opportunity for Chile to position itself as a platform to capture nontraditional investments, which in turn allows technology transfer, interdisciplinary academic cooperation, and to continue opening up to the Asia- Pacific region and China. Increasingly Chile is faced with the dilemma of having to choose between remaining only a business partner and positioning itself as an integral strategic partner of China. During 2016, both nations jointly declared raising their diplomatic status to the category of comprehensive strategic partners. Although this is not a binding agreement, strategic partnerships involve a framework of multidimensional and complex cooperation that includes cooperation in different fields such as technology, security, and culture. In this context, it is worth highlighting the need to better understand the reality and transformation that China has shown and therefore it is essential to continue strengthening mutual learning through university and scientific cooperation. This anniversary not only has to be commemorated as a tribute to a friendly nation that has become a world power of enormous influence in the future of our civilization, but also as an opportunity to think deeply about a relationship that is already critical to the kind of development that Chile will need during the present century.

Chapter 99

Openness, Cooperation, and Dialogue Between the Malay and Chinese Civilizations Peter T. C. Chang

99.1 Introduction Since its founding 70 years ago, the People’s Republic of China has been transformed from an agrarian based economy into a high-technological powerhouse. This “economic miracle” turned a predominantly rural mainland into a modern urbanized country, hosting some of today’s most advance international metropolis. These are historic achievements, and the China story is undoubtedly the story of our times. China’s re-emergence as a world power has far-reaching consequences. The global geopolitical and geo-economic centre of gravity has begun to shift back to Asia. In fact, Beijing is internationalizing its model, aiming to replicate its success elsewhere. Through the Belt and Road Initiative, for example, President Xi Jinping has launched an ambitious infrastructure blueprint to drive a Pan-Asia economic rejuvenation. When implemented effectively, this mega continental and maritime connectivity undertaking could herald in a new era of growth and prosperity across Asia. Hence magnifying the Chinese Dream into an all- encompassing Asian Dream. As stated in the conference title, after 70 years of outstanding development, China is lifting its sights towards a higher plane, with a loftier end goal, namely, to construct a “community with a shared future for mankind.” The pathway to this grand vision is of course laden with challenges. One such hurdles pertain to Asia rich yet complex cultural makeups. Home to some of the world earliest and longest surviving civilizations, the Asia landscape is a tapestry of varied languages, cultural heritages, and belief systems. And these intricate diversities cut across multiple national boundaries, presenting possibilities as well as risks, as China assumes the lead to actualize an enlightened and inclusive commonwealth.

P. T. C. Chang (B) Institute of China Studies, University of Malaya, Kuala Lumpur, Malaysia e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_99

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This paper looks at the civilizational challenges confronting the proposed quest for a community with a shared future for mankind. We will examine the Malaysia experiences in sustaining a robust relationship between the Malay and Chinese world. The study begins with a historical overview of the Asian civilizations, followed by an analysis of the complex issues affecting Malaysia, a country of many races and religions. To set the Malaysian predicaments in a broader context, we will revisit Samuel Huntington’s clash of civilization thesis, to deliberate on the perplexities facing the post-Cold War reality. The paper then looks at China’s role, focusing on the Belt and Road Initiative. I will explain how this ambitious pan-Asian infrastructure project crisscrosses many civilizational boundaries, as such is laden with potentially risky fault lines. We conclude with some deliberations on the prospect and necessity for the world to work toward realizing a community of shared future for mankind.

99.2 Overview: Asia’s Diverse Civilizations Broadly understood, a civilization represents a complex society characterized by urban development, social stratification imposed by a cultural elite, symbolic systems of communication, and a perceived separation from and domination over the natural environment. Most of these human settlements were founded along fertile river valleys, and Asia is home to some of the earliest world civilizations. These Asian settlements span from the West, the Tigris and Euphrates in Mesopotamia, to the Indus in the Indian subcontinent, and all the way to the Fast East, the Yangtze and Yellow Rivers in China. Commonly ascribed as the “cradle of civilization”, these communities flourished, largely independently, into complex cultural powers and sophisticated political empires. Then, at around the eighth century BCE, in what Karl Jaspers calls the Axial Age, they began to develop a set of universal philosophical and religious ideas. And from separate locales, they transform into today’s most dominant world religions, namely, Jewish-Christian-Islamic monotheism, Indian Buddhism and Hinduism, and Chinese Confucianism and Daoism. This development paved the way for increased engagement among the previously isolated civilizations. Coinciding with a period of history whereupon empires expanded, and their underlying philosophical and religious ethos spread, bringing about accelerated cultural and social changes, from the Mediterranean to the India subcontinent, and reaching China. One significant meeting point between these civilizations was the ancient city of Malacca, in Southeast Asia. Midway along the straits that link China to India and the Near East, the Malay Peninsular was at the crossroads of the Asian civilizations. Founded in the early fifteenth century by a Sumatran Prince, Parameswara, Malacca quickly became a favored and strategic port. Believed to be of Hindu heritage, Parameswara converted to Islam, and became enthroned as the Sultan of

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Malacca. After its adoption of Islam, the Sultanate started to attract traders from across Asia such as India, Arabia, and China. It was during this time that the famed Ming dynasty admiral Zheng He made his epic voyages down the Nanyang, reaching the Horn of Africa. In these series of maritime exploration, Zheng He visited Malacca numerous times. These exchanges and interactions turned Malacca into a truly cosmopolitan centre, with Hindu, Islam, and Confucian imprints. In 1511, the Portuguese came and conquered Malacca, spelling the end of the Malay sultanate about a century after its founding. After the Portuguese, the European colonial rule of Malacca continued under the Dutch, and finally the British. It was not until 1957 that Malacca, along with the rest of Malaysia, received her independence, and thus began the slow process of reclaiming its Asian heritages.

99.3 The Complexity of Pluralistic Malaysia Modern Malaysia has been described as “Asia in miniature,” a microcosm of Asian civilizational co-existence. A multi-racial, multireligious society, the many ethnic groups in Malaysia maintain distinct cultural identities and religious affiliations. The original culture of Malaysia stemmed from its indigenous tribes, along with the Malays who moved there in ancient times. This was later supplemented by substantial input from the Chinese and Indian civilizations, which began when these Asian giants began trading with the Malay Sultanates. Other sources of influence on Malaysia cultural complexion include Persian, Arabic, and the Europeans. The Malays, identified as “bumiputra,” play a dominant role politically. According to the Malaysian constitution, all Malays are Muslims. The Chinese form the secondlargest ethnic group, and most are Buddhists and Taoists. The Indian community is the smallest of three main ethnic groups. And they brought with them to Malaysia their Hindu and Sikh beliefs. The small but important Christian minority in Malaysia are drawn mainly from the Chinese and Indian community. Widely recognized as a stable multicultural society, the separate ethnic and religious communities in Malaysia have generally shown tolerance towards each other. And other countries have looked to Malaysia as the model of a moderate Islamic country. But Malaysia is not without its predicaments. There were some occurrences of discords to be sure, a case in point being the race riot in 1969. More recently, some observers are concerned with a growing practice of a more fundamentalist form of Islam in Malaysia. The predominance of Islam and its slow spread into everyday life in Malaysia has caused worry for non-Muslim groups. And due to the linkage between race and religion, coupled with the social-economic divide cutting across ethnic lines, this is presenting critical challenges to the Malaysian government, as they work judiciously to maintain harmony in a pluralistic society.

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99.4 The Clash of Civilizations Though unique, Malaysia’s rich diversity in fact sits on a fragile cultural and socialeconomic landscape. And Malaysia’s predicament is part of a broader phenomenon. As globalization compressed the worlds civilizations into closer encounters, the risk of conflict is also increasing. The political scientist Samuel Huntington has argued that the defining characteristic of the twenty-first century will be a clash of civilizations. According to Huntington, conflicts between civilizations will supplant that of between nation-states and ideologies that characterized the earlier centuries. One of the main reasons why this is likely is because the differences among civilizations are too fundamental, especially on matters relating to religions. Disputes on subjects of faith and beliefs are less mutable. And they are not as easy to compromise and resolve as compared to political and economic contestation. Compounding this predicament is the fact that the world is becoming a much smaller place. As a result, interactions between the world religions are increasing, which intensify “civilization consciousness.” While it heightens awareness of commonalities within, it also brings into sharper focus the differences between civilizations, and these can generate animosity. In the post-Cold War world order, Huntington sees a major shift of economic, military, and political power from West to other civilizations of the world. And importantly, he identified the Islamic and the Sinitic world as the two of the most significant “challenger civilizations” to the West. In Huntington’s assessment, the Islamic civilization has experienced a massive population explosion which is causing instability both on the borders of Islam and in its interior, where fundamentalist and militant movements are becoming increasingly popular. Manifestations of what Huntington calls the Islamic Resurgence include the 1979 Iranian Revolution and the first Gulf War. In East Asia, the Sinitic civilization is seen as representing a worldview fundamentally different from the Christian West. And due to its rapid economic growth, China has become a competitor vis-à-vis the US for regional as well as global hegemony. This geopolitical challenge also has a cultural dimension, as the Chinese world assert itself, with its underlying values system. Indeed, the rise of China is assessed by Huntington as posing one of the most critical dilemmas and long-term threats to the existing Western-led world order. Without questions, four decades after the opening-up and reform era, China has regained its stature as an international actor. And the Chinese footprints can now be found across the world’s continents. Not only is this generating social-economic dynamism, but China’s outreach is similarly causing changes and upheavals along diverse spheres including the civilization frontiers. Launched in 2013, the Belt and Road Initiative is an apt example of how China’s growing global presence is facing some culture-related challenges.

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99.5 The Belt and Road Initiative and Asia Civilizational Frontiers The Belt and Road Initiative is a development strategy adopted by the Chinese government involving infrastructure development and investments in countries in Europe, Asia, and Africa. The “Belt” refers to the overland routes for road and rail infrastructure, called “the Silk Road Economic Belt,” whereas the “Road” refers to the sea routes, or the twenty-first century Maritime Silk Road. Beijing calls the initiative “a bid to enhance regional connectivity and embrace a brighter future.” This is seen by many as a push for Chinese dominance in global affairs with a China-centred trading network. Already, some estimates list the Belt and Road Initiative as one of the largest infrastructures and investment projects in human history, covering more than 68 countries, including 65% of the worlds’ population and 40% of the global gross domestic product as of 2017. These fears also extend to the civilizational domain. Will a resurgent China, like the West has done in the past, seek to impose its values and norms on the rest of the world? Lucian Pye, the American Sinologist, once mused that modern China is a civilization pretending to be a state. Pye’s perceptivity draws attention to the distinct ethnic-cultural underpinnings of the Chinese world order, namely, Han Confucianism. Indeed, as one of what German philosopher Karl Jaspers called the Axial Age traditions, the Confucians conceive themselves as champions of the Ways of Heaven, espousing principles that are universal, efficacious for all humankind. The presentday Confucius Institute project can be taken as contemporary China’s cultural outreach to the world at large. Critics, however, especially those in the West, have decried these state-sponsored institutions as Trojan horses propagating illiberal Chinese ideologies. Disconcerted with the perceived misunderstanding of its motives, Beijing has reiterated its commitment to a peaceful rise and pursuit of a harmonious coexistence of all people and cultures. These reassurances notwithstanding, the situations on the ground remain complex and precarious. As it is, the BRI not only covers a vast geography but crisscrosses fragile civilizational terrains, which are laden with ethnic and cultural pitfalls. Along the Western frontier, the historical Silk Road, once beset by marauding bandits, is today vexed by brewing Islamic militancy. Then, at the opposite end along the eastern shorts, deep-seated animosities between the Chinese and their Japanese and Vietnamese neighbors have often fomented fervid expressions of ethnic nationalism. Though the diplomatic ties are strong, the Sino-Malaysia alliance is not immune from the effects of this predicament. At the outset, China’s engagement with Malaysia, a predominant Malay and Islamic country, calls for, at best, cross- cultural and interreligious acumen. This task is complicated by the presence of a sizable Chinese minority in Malaysia, whose relationship with the Malay majority has at

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times been mired in antipathy. This edgy co-existence can have a bearing, in one way or another, on relations between Beijing and Kuala Lumpur. How China chooses to respond to overseas Chinese affairs in general, and those in Malaysia particularly remains a delicate matter of international diplomacy and politics. Any overreach on the part of Beijing could have transitional repercussions, straining bilateral ties and undermining the BRI. Indeed, spread across continental and maritime Asia are civilizational fault lines that could unravel China’s ambitions vision of common prosperity. That said, economic forces are not always subject to ethno-cultural vicissitudes. In some instances, the former can transcend and influence the latter, and Malaysia may be a case in point. If administered judiciously, the current inflow of China’s capital can generate economic uplifts that could strengthen the fragile communal fabric in Malaysia. Needless to say, the converse is also true. China’s mercantilism, if pursued without due considerations, could aggravate the already intricate Chinese-Malay race relations. Primarily an economic master plan, China’s flagship BRI is also infused with geopolitical significance and civilizational ramifications. Though not beyond the bounds, President Xi’s dream is an audacious one, with much at stake for both China and the rest of Asia. If successful, this grand vision could herald a golden era of prosperity and harmony, across Asia and beyond. Any missteps, however, could have a transnational fallout that goes far beyond economics, with reverberations throughout the geopolitical and civilizational landscape.

99.6 Quest for a Shared Future for Humankind Aside from the Belt and Road Initiative, China has advanced another grand endeavor, “a community of shared future for humankind.” First introduced by former President Hu Jintao, this concept was reasserted by President Xi Jinping during the 2018 National People’s Congress. The key objective of this vision is to build a new framework of international relations and promote and improve global governance. Some analysts regard this as a ground-breaking move in China’s foreign policy in more than four decades, shifting from being nation-oriented to focusing on whole of humankind. This community, according to the Chinese leadership, is necessary simply because ‘mankind has only one earth to live on, and countries have only one world to share’. This need has given rise in large part because of the globalization phenomenon. With the rapid advances in transportation and communication technology, the world has become much more interconnected. Though driven primarily by economics, this process of interaction has deep and extensive social and cultural aspects. As such we have become integrated in almost every dimension of our human existence. Indeed, the modern world is now a global village. While this is proving efficacious in some ways, it also means that the risks and challenges we face have also taken on a

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global dimension. For this reason, the fate of humankind everywhere is increasingly intertwined. There is no better illustration of this than the environmental crisis. The entirely human family destiny is at stake as we are confronted with the dangers of climate change, transnational air pollution, overpopulation, deforestation, biodiversity loss and species extinction. Other exigencies include challenges in the public health sphere (such as SARS), governance (relating to cybersecurity), and international security (terrorism and weapons of mass destruction). In the face of these complications, more than ever, the world has got to come together to jointly address and resolves these threats affecting humanity. No country could afford to stay aloof by taking care of its own interest alone. The international community has become a community of shared future with each having a stake in others. A new type of more equitable and balanced global order is needed. Nation- states may stay united, especially in times of crisis, to share rights and shoulder obligations, protecting and advancing the common interest of humankind.

99.7 Conclusion The twenty-first century is leading the world into historically uncharted waters. A paradigmatic shift in the global order is underway, where the present US unipolar leadership is likely to be replaced by a multipolar power structure. More importantly this is not merely an economic and geopolitical re-alignments but one with broad civilizational implication. A continent known as the “cradle of civilization,” Asia is at the centre of these changes. By and large, Asia’s variegated ethnicity, language and belief systems have co-existed peaceably, even enriching each other through cross-cultural exchanges and fusion. To be sure this pluralistic reality is not without strife and conflicts. The history of Asia is also marred by episodes of racial and religious tension. For this reason, the harmonious co-existence of the many civilizations in Asia cannot be taken for granted; it requires conscientious efforts by all. In this regard, as a rising regional, if not global power, China has a vital role. And Beijing has taken significant steps in that direction. The Belt and Road Initiative is one. And the vision of a community of shared future for humanity is the other. These are important grand endeavours, and if successful, they would indeed herald in an era of prosperity and stability, for all, across Asia and beyond.

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Suggested Reading Barnes, Gina L. (1993) The Rise of Civilization in East Asia: The Archaeology of China, Korea and Japan. London: Thames & Hudson. Bell, Daniel A. (2010) “Reconciling socialism and Confucianism?” Reviving tradition in China. Dissent 57(1): 91-99. Chang, Peter (2011) “Confucian China and Jeffersonian America: Beyond liberal democracy.” Asian Studies Review 35(1): 43-62. Chen, Ming (2009) “Modernity and Confucian political philosophy in a globalizing world.” Diogenes 56(1): 94-108. Ching, Julia (1993) Chinese Religions. Maryknoll, NY: Orbis Books. Holcombe Charles, (2011) A history of East Asia: From the Origins of Civilization to the Twenty First Century. Cambridge, UK. Cambridge University Press. Huntington, Samuel P. (1996). The Clash of Civilizations and the Remaking of World Order. New York, NY. Simon & Schuster. Iskandar, Yusoff. (1992). The Malay Sultanate of Malacca: A study of various aspects of Malacca in the 15th and 16th centuries in Malaysian history. Kuala Lumpur, Malaysia: Dewan Bahasa dan Pustaka Kang, Xiaoguang (2006) “Confucianization: A future in the tradition.” Social Research 73(1): 77-120. Schwartz, Benjamin I. (1985) The World of Thought in Ancient China. Cambridge, MA: Harvard University Press.

Chapter 100

Kyrgyzstan and China: The Role of Higher Education in Developing the New Relationship of “Dialogue of Civilizations” Peter T. C. Chang

As one of the key countries along the Silk Road, Kyrgyzstan is actively and fully participating in various projects of cultural, human, scientific and technological, social, and economic cooperation intensively promoted by the countries along the Silk Road, which have contributed to the development of Kyrgyzstan and all Eurasian countries. More importantly, they have introduced information technology and digital economy as an integral part of people’s daily lives. The Bishkek Humanities University, where I work, was founded in 1979. It was named after Bishkek, the capital of our republic. At the end of November 2019, professors and staff of this university will celebrate its 40th anniversary. At present, Bishkek Humanities University has signed 50 twinning and cooperation agreements with various Chinese universities. Within the framework of these agreements, academic mobility of teachers, students, and researchers between Kyrgyzstan and Chinese universities has been realized, and scholars can jointly carry out cultural and scientific research projects. Today, this close cooperation continues to grow and has significantly increased the quality and scope of interactions and collaborations. The number of students from Bishkek Humanities University studying in Chinese universities is increasing year by year. From 2018 to 2019, more than 300 undergraduates, postgraduates, and doctoral students of Bishkek Humanities University used government scholarships provided by the Chinese government to study in China, while a similar number of Chinese students came to Kyrgyzstan for study and academic exchanges. The Confucius Institute established at Bishkek Humanities University is the first of its kind in Kyrgyzstan and a successful international cooperation project.

P. T. C. Chang (B) Institute of China Studies, University of Malaya, Kuala Lumpur, Malaysia e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_100

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Our research and teaching staff often visit Chinese universities for various academic exchanges. We also regularly receive partners from Chinese higher education institutions. Of course, we are also encouraged by the progress that is being made in the Chinese education system, first and foremost in teaching. In the early 1950s, China’s modern education system was in its infancy, but today it ranks first in Asia and third in the world in terms of quality of education. Despite this, the Chinese government is still actively developing its educational infrastructure, with a particular emphasis on modernizing the higher education system. China now has a very efficient teacher training mechanism. We have established many joint teacher training programs with China. Several generations of educators have made unremitting efforts to advance this far-reaching and important cause: training talents for a just, developed, sustainable, and bright future. It should be stressed that the cooperation between Bishkek Humanities University and Chinese higher education institutions is based on mutual understanding, dialogue, and consultation, which has led to a number of outstanding, tangible, and concrete results. Openness and dialogue, as well as introduction and exchange, are also part of the process of harmonious coexistence and peaceful development among countries. This is evidenced by the friendly relations and cooperation between our two countries in the field of higher education. The People’s Republic of China advocates the concept of “harmony in diversity,” which has opened up broad and bright prospects for the harmonious development and long-term prosperity of human society. On the basis of political mutual trust, economic integration, and cultural tolerance, education has a unique mission in building a community of interests, a community of responsibilities, and a community of a shared future for mankind. From ancient times to the present, countries along the Silk Road have been inextricably linked to each other, and their exchanges in the field of education have a long history. The prospects for cooperation in this field are even greater in the future. This is a great opportunity for all countries to participate in the development of education and to work together to build the “Belt and Road,” which will be a great benefit to all the people along the route. In order to enhance mutual understanding, mutual learning, and complementarity among countries along the Silk Road, we should further strengthen cooperation among higher education institutions on the basis of equality, inclusiveness, and reciprocity, and jointly develop education to achieve common interests. Obviously, cooperation between higher education institutions of various countries is playing an increasingly important role in the joint promotion of the Belt and Road.

Chapter 101

Openness, Cooperation, and Dialogue with China and Implications for the EU Accession Bid of Macedonia Marija Risteska

101.1 Introduction The rise of China is one of the most important historical developments of today. Once isolated and struggling for survival, the “Middle Kingdom” now is a global superpower. As such, it poses a great challenge for policymakers, as well as social science and policy researchers virtually in every corner of the globe. Increasing diplomatic and economic activity in Central, East and Southeast Europe, including Macedonia in the last few years China has the potential of becoming a significant regional actor and game changer. Considering the EU political crises, the disintegration processes that are ongoing in the European Union1 and the new approach that is yet to be determined for EU enlargement which is of great interest to Southeast Europe and Macedonia in particular opens opportunities for the region to diversify its cooperation and dialogue with other countries, such as China. While China is often labelled as predator and used for scapegoating, the EU agenda and relations with China should not be competitive but rather compatible to each other. Yet, in the public debate in the region and in Macedonia there is very little scholarly debate on the role and impact of relations with China. The lack of knowledge and interest is of course not the case with China only. Overall public debate is region- or Macedonia-centric, expending rarely to a wider outlook of the EU and trans-Atlantic security cooperation but again only limited to the region. China is rarely a topic of public debate, there have been a few exceptions to the rule except for corruption and misuse of money and seen as normatively opposed to the orientations of Macedonia, that being following the European model of liberal democracy, this has especially 1

Brexit primarily, as the new EU strategy plans to complete the unfinished eurozone model.

M. Risteska (B) Centre for Research and Policy Making of Macedonia, Skopji, Macedonia e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_101

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come at a time when Macedonia’s government is primarily focusing on the number one foreign policy objective, and that is advancing its EU membership bid.

101.2 Cooperation and Impact of Relations with China: Mismatches and Opportunities The way to assess China’s role and impact today is the use of commonly accepted facts and figures that enable a measurement and comparison of China’s development to other, more familiar units of analysis. And the discourse on China and China’s image is nowhere more ambiguous than in the world of numbers: China tops many categories of economic prosperity, while remaining on the bottom in others. In this respect the assessment is partially subscribed to conventional, Western-style thinking, which gives superiority to the combination of market economy and democracy. However, the paradigm-shifting aspect of such framing of China lies in the fact that the Western thought had not anticipated the possibility that a communist party could actually run the economy well, and that the economic development would not lead towards weakening of the regime nor abolishing traditional values, but rather towards their strengthening. From this standpoint, China is usually labeled as an inward-looking and pragmatic foreign policy actor, primarily concerned with its domestic imperatives, with no real ambitions to change the world beyond its borders. As Womack (2008:1), argues, if one assumes that “‘our’ (European/Western) norms are not the only possible norms, and perhaps not the only valid ones” in the world, one might explain China’s behavior differently. China behaves in its own way not because it has “moral defects” or lack of motivation to abide by the existing international norms, but because its leaders hold distinctive worldview and different norms compared to the West. This makes China a normative foreign policy actor that, in the same way as the EU, advocates for the adoption of its own set of “universal” values and principles. In this sense, China runs on its own kind of exceptionalism, a concept that often goes by the name of “China’s new diplomacy” or “China’s new grand strategy.” The legalist/policy explanation of the Chinese exceptionalism stems from the successful, yet unique and tailor-made development policy, which has managed to lift China out of poverty and make a regional power with a global outreach out of it. China’s unique path, based on the concept of developmentalist state, has affected its foreign policy preferences. Developmentalist values “receive top priority over human rights, democracy, and unregulated markets,” which are traditionally the pillars of the Western system of values and norms. This is probably the most challenging aspect of China’s foreign policy when it comes to its reception in the West including the region of CESEE, and Macedonia. In line with its foreign policy which is based on the principle that there are no big and small states, China tries to establish partnership and cooperation with all the Central European and Southeast European countries. Through the Belt and Road Initiative (BRI), China approached “17 + 1” CESEE countries and Greece

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Table 101.1 EU-China normative divide Aspect

China’s attitude

EU’s attitude

Towards EU

The EU needs to embrace Chinese investment, eventually separate business and politics Individual member-states (core and peripheral), and non-EU states of Europe are easier to deal with than the EU

The EU needs to consolidate its common China policy and not let business interests to prevail over political ones

Towards China

China should use opportunities for deal making and branching out on different level Working with individual countries is of benefit for the whole EU

Fear of China potentially using “divide and conquer” strategy by focusing on individual countries and areas

Source Author’s own presentation

(joined in 2019). Considering that the countries lacked pre-defined national priorities and regional strategy to cooperate with China, CEE countries are left to compete among themselves for Chinese investments and other types of privilege from China. This oftentimes leads to corruption, “debt entrapment” accusations and labels. In addition, the overall “17 + 1” framework is sometimes labeled as a Chinese Trojan horse aiming to saw discord between the so-called Western and Eastern EU members and to divert the non-EU countries from their EU accession process (Blazheska and Risteska 2018) (Table 101.1). Yet this is not the only mismatch that can be observed in the cooperation. While China has a well elaborated strategy enshrined in BTI, Macedonia and rest of the countries in the SEE region has just initiated a Regional Investment Reform Agenda (RIRA)2 which can be observed as a platform through which cooperation of the region with China can be fostered overriding the existing competition between countries in attracting FDI and allowing for more targeted and integrated regional approach which would enable large-scale projects and investments. Through National Action Plans developed to achieve RIRA’s goals the region’s and with that the cooperation of Macedonia through the ‘One belt, one road’ initiative can be established. The REA and RIRA processes are part of the Strategy for economic growth of the region which in turn is fully in-line with the EU 2020 Strategy. Such an approach is foreseen not to create competition between the growth agenda which with the current state of enlargement cannot be implemented with EU funding and the Chinese foreign policy strategy is hence boosting economic cooperation. To this end the ChinaSEE cooperation has an opportunity to rest on the “mutual benefit” or “win–win”

2

Following the efforts to enhance Western Balkans (WB) regional cooperation within the Berlin process framework in Trieste, Italy in 2017, the countries from the WB region decided to engage in the creation of a Regional Economic Area, and Regional Investment Reform Agenda (RIRA) which aims to harmonize investment policies among the 6 economies and with the EU best standards and practices.

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approach: the countries of SEE expect to get more loans, investments and trade opportunities, as well as support for large-scale infrastructure projects. Another mismatch is observed between the WB investment opportunities and the priorities of Chinese companies. While China favors mergers and acquisitions, technology transfers, acquisition of brands, and advanced management skills, most SEE countries look for green-field or brown-field investments that would create jobs and boost the local economies (Blazheska, A; Risteska, M., 2018). In connectivity infrastructure projects however the opportunities and interest have matched as the Chinese investors come with low cost, speedy financing procedures as compared to the EU or other International Financing Institutions (IFIs), and readiness to takeover seemingly “lost” cases, bringing them back to profitability (Hackaj, 2018). Hence, despite the mismatches there are numerous opportunities in SEE-China cooperation. The openness of the partners to work together and specifically the adaptation capacity of the Chinese actors is an important precondition to further development of relations. The self-critical approach of the Chinese government, mirrored in the fierce anti-corruption campaign and the quest for responsibility and accountability of the incumbents is reflected in their economic and diplomatic cooperation. Chinese companies are aware of the critics, mainly from European and American counterparts in SEE and beginning to pro-actively engage with civil society representatives, non-governmental organizations, chambers of commerce and universities; and adapt their strategy, and behavior to meet the EU governance standards. In this way, they become very skilled at investing in EU Member States the Chinese are becoming a partner in implementation of EU policy including in SEE. This is an important opportunity for changing the narrative surrounding Chinese investment. In SEE there is a stark difference with investors coming from other countries, and those coming from China as almost every story about Chinese involvement starts with the explanation of what could go wrong (Hackaj, A, 2018).

101.3 Macedonia—China Dialogue and Its Implications on MK’s EU Accession Bid Macedonia and China established their bilateral relations in 1993. China was one of the first among the permanent members of the UN Security Council to recognize Macedonian independence; of special importance was the recognition of the country under the constitutional name. The early stages, however, were marked by constant reference to the potential for cooperation between the two sides, which eventually commenced in 1995 when the two countries signed economic-trade cooperation agreement. According to the letter of the agreement, both countries shall enjoy the treatment of most-favored-nation for the purpose of trade and promotion and development of that trade. One significant element of the 1995 trade agreement (Article 7) is the creation of a joint Macedonian-Chinese commission for economic-trade

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Fig. 101.1 MK-China economic exchange (2006–2012). Source State statistical office www.stat. gov.mk

cooperation. In 1996 already the largest cooperation projects in the history of Macedonia, the hydropower plant Kozjak, was signed. And since then, until the Road and Belt Initiative the economic exchange between the two countries has increased (Fig. 101.1). Macedonia was among the first countries in Central and Eastern Europe (CEE) to embrace the “16 + 1 cooperation” and the Belt and Road Initiative (BRI), there were great expectations that the country would increase its visibility in China, especially among Chinese policy makers and big companies, in order to create new avenues for economic cooperation and speed up its economic development. Hence, the strategy towards mainly foreign direct investors that would open new factories or restart the old ones also enhanced the hopes of a more productive economic cooperation with China. Yet not a single big Chinese company came to invest and stay in Macedonia and the overall level of Chinese investments remains below 0.1% of the total inward FDI.3 The situation is similar in terms of Chinese lending and investments, where in Macedonia there have been only two investments in constructing motorways and the modernization of the railway (Table 101.2). Hence, Macedonia has seen amplification of the political, economic, and cultural cooperation with China. There have been numerous bilateral exchanges on all levels, efforts to augment trade volume, as well as the opening of a Confucius Institute in Skopje. China has been more present in the public discourse (albeit with very little first-hand coverage). However, the pace of dialogue decreased with the change of Government in 2016 and the latest EU-China Summit in Dubrovnik this year reinforced the impression that Macedonia is not particularly pro-active or ambitious. 3

Calculation made by Blazheska A., Risteska, M. presented in “The creation of a Regional Investment Reform Agenda in the Western Balkans and its implications for Chinese investments: case study on the Republic of Macedonia”, CRPM 2018 on the basis of different publicly available sources: UNCTAD, IMF, NBRM, Hong Kong Trade Development Council.

2015 N/A 600 Million 350 Million

N/A

Transport

Energy

Macedonia

Bosnia-Herzegovina

0.880 Billion 60 Million

Energy

Auto industry

Greece

Serbia

722 Million

50 Million EBRD Secured Loan

Railway

Thermal power plant/energy

574 Million

Motorway construction 110 km

260 Million

Mihajlo Pupin Bridge over Danube

0.158 Billion 293–608 Million

Transport/container shipping

Energy

Bosnia-Herzegovina

Macedonia

Serbia

0.340 Billion 0.490 Billion

Transport/container shipping

Transport/container shipping

1.1 Billion

Sector

Transport/container shipping

Country

Greece

Year

2014

Value in Billion/Millions e

Completed

Planning stage

N/A

Completed

MoU

Framework and lending agreement, seeking loan guarantee

Completed

Completed

Completed

Ongoing

Completed

Completed

Completed

Completed

State of investments

Table 101.2 Major Chinese Investments and Lending in Greece, Serbia, Macedonia, Bosnia and Herzegovina Nature of investments

(continued)

Official Lending + construction of thermal power plant

Motorway construction + lending

N/A

Obrenovac

Energy generation

15% co-financing by EPBBiH, 85% loan from Exim Bank

Electrical trains/railway modernisation

Lending/construction Kicevo-Ohrid, Miladinovci-Stip

Bridge building

Thermal power plant at Kostolac

Shipping logistics

Shipping infrastructure

Shipping infrastructure

Official lending

796 M. Risteska

Over 1 Billion N/A

Rail reconstruction

N/A

Sector banking

Electric locomotives

Serbia

Macedonia

Bosnia-Herzegovina

Energy/electricity

Greece

Bosnia-Herzegovina

Source Authors presentation of data from EBRD, 2018

2017

46 Million

Steel Smederovo

Macedonia

350 Million

Construction Corridor 11

Serbia

N/A

N/A

0.320 Billion

0.280.5 Billion

Transport ports

Greece

388 Million

Energy

2016

Value in Billion/Millions e

Sector

Country

Year

Table 101.2 (continued)

Ongoing

Completed

First stage completedongoing

N/A

Ongoing

Ongoing

Ongoing

Completed

Tender process ongoing

State of investments

Supplementary investment to 2014

Greenfield investment, Branch network

24% shareholding (right to acquire 66% majority)

N/A

Fast Rail link Belgrade-Budapest

Modernisation investments

Cross border hughway construction

Majority shareholding

Thermal power plant, coal mine operation

Nature of investments

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One of the reasons why Macedonia- China relations have been rather moderate in the last several years has been the preoccupation of the government in Skopje with its accession to the NATO and the EU, which also involved solving the name dispute with Greece (Vangeli, A. 2019). Preparing itself to become NATO member state and start negotiations with the EU, Macedonian government put all efforts to stay away from the implications of the increased frictions between the US and China, and the tensions between the EU and China. However, considering that the country will become member state of NATO early next year and that the enlargement process has been stalled, the dynamics in Macedonia-China dialogue might change. This is predetermined by two factors: (i) the Joint Statement and commitment to improving EU-China relations after the Dubrovnik Summit which gives room for interpretation that the countries in the region should pursue both EU accession and deeper cooperation with China; and (ii) the EU call for greater regional economic cooperation that now receives a new impetus with the membership of Greece in BRI. To this end and since CESEE platform of cooperation itself rests on the principle of regional cooperation Macedonia could benefit from the Chinese interest in the region is by getting actively involved in the development of routes for transit of goods, as well as large, transnational infrastructure projects. Finally, Macedonia can truly advantage from the China relationship only if it further pursues the EU membership bid. This statement is rooted in several reasons. First, it is the curse of size: without full access to the common European market, Macedonia’s leverage in doing business with China is miniscule. Second, without fulfilling the rest of the challenges on the road to the EU, Macedonia loses its overall credibility as a business partner, as a lot of the reforms have direct impact on doing business. As the latest CRPM study concludes “China does not seem to be creating any particular disruption to the region’s EU integration process, but rather seeks to expand the network of potential allies in Europe, to identify new business opportunities and to promote itself into a soft power by promoting the achievements of its development model.”4

4

Ana Krstinovska, Marija Risteska, Kristija Aleksovski, Aleksandar Cekov, The Impact of Europeanization on the Balkan Countries and their Potential Shift from the Periphery toward the Center, CRPM and Beijing Foreign Studies University, Center for Balkan Studies (unpublished study).

Chapter 102

Visit Laos-China Year 2019 Enhancing Cultural and Economic Cooperation Bouadam Sengkhamkhoutlavong

102.1 Introduction Economic and culture relations between China and Laos have been developing constantly with great achievements in such fields as trade and investment for over half a century since the establishment of diplomatic relations between the two countries. Now China is the second largest trade partner, the largest foreign investor, and the largest aid provider of Laos, and Laos is the third largest destination of China’s investment in ASEAN countries. The Visit Laos-China Year 2019 was launched on January 25, 2019, in Vientiane, the capital. Laos has announced plans to draw more Chinese tourists to the landlocked country that stands at the heart of the Mekong Region. Laos situated in the Mekong River Basin, Laos is rich in sightseeing resources, boasting 1900 tourism sites including 1000 natural scenic spots, 534 cultural heritage sites and about 300 sites of historic relics. The beautiful scenery and simple and natural environment make tourism the country’s second largest pillar industry after mining. The Lao Government predicts that there will be over 6.2 million tourists to visit the country in 2020 and its tourism revenue will reach 1 billion U.S. dollars. Based on an analysis of this trend and other developments, it is very likely that Chinese tourist arrivals will account for a bigger share of the Lao tourism market. This is due to the emerging middle class in China. Chinese people are becoming wealthier, and this will enable them to travel around the region, including the Mekong countries. Laos is building a railway from its border with China to the capital Vientiane. Improved land transport connectivity will lead to more Chinese tourists coming to Laos. Laos has numerous tourist destinations that can attract Chinese travelers,

B. Sengkhamkhoutlavong (B) Asia Research Center, National University of Laos, Don Noun, Laos e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_102

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including the world heritage sites of Luang Prabang and Wat Phou Champasak. Laos also has many scenic attractions and places of cultural interest, according to the daily. With the China-proposed Belt and Road Initiative and Laos’ strategy of “turning itself from a land-locked country into a land-linked country” providing constant motive force to trade and economic cooperation, the two countries have carried out a series of fruitful cooperation in mutual connectivity, energy, construction of economic zones, etc. At present, there are considerable potentials for investment between the two countries in agriculture, infrastructure, manufacturing, energy, tourism, etc. The construction and opening to traffic of the China-Laos railway will further promote bilateral cooperation in construction material, service industry, logistics, catering, ecological agriculture, as well as processing, mining, light industry, etc. This study aims to provide a review of Lancang Mekong Cooperation in the context of tourism between Laos and China. It will shed a light on the increasing trend of inbound Chinese tourist to Laos over the past years along a bright perspective on the continuous expansion of the cooperation of two countries in tourism sector over the completion of Kunming-Vientiane railway project by the end of 2021.

102.2 Historical Review The Lao people were a tribe originally from Yunnan, China, who was pushed south to the border of the Khmer empire in the thirteenth century. The first Lao kingdom, called Lan Xang or “land of the million elephants,” was founded by Fa Ngum in 1353. Ninety percent of the Lao people consume sticky rice. The basket which keeps the rice after steaming is called Tipkao or Kongkao and can be taken everywhere. Houses, especially the ones of the low land Lao (Lao Loum) are built on stilts and have free space underneath that roofs triangle wind plates on each side. These are 2 types of houses; single and a double roofed how many steps on the stairs depends on the height of the house, but traditionally they made uneven numbers such as: 3 steps, 5 steps, 7 steps, and 9 steps. Costumes depend on gender and age. Lao women wear the silk skirts, blouses, and scarves to attend important ceremonies. Design of Lao women skirts: 1. Design with upper and lower parts, 2. Not too short or too long, 3. The upper part over the waist, 4. Lower part of skirt suitable, 5. Not too sexy. Attending significant events, Lao women wear scarves and coiled hair styles. Lao men wear salong, large pants, or the peasant pants to attend the important ceremonies. Paekaoma is used for cleaning the body, covering the head and others. Hairstyle were coiled down to both sides down to the back and earrings. Men and women dressed same styles of pants of shirts made by textile no color and they did not have any decoration wares. Laos is one of the oldest nations in Southeast Asia. This place was called Souvannaphoum and some Lao were settled in the south of China called Anachak Ai-Lao. Due to wars Lao migrated southward and established the Nanechao Monarchy. The first king was named Sinoulo, governor of Nongsae as Chinese called Talifu town. It was the capital city of Nanechao had peace for quite a long time. The first governor

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called Nanechao-ong. Main occupations were cultivation, animal husbandry, and textile weaving.

102.3 Economic Cooperation With the China-proposed Belt and Road Initiative and Laos’ strategy of “turning itself from a land-locked country into a land-linked country” providing constant motive force to trade and economic cooperation, the two countries have carried out a series of fruitful cooperation in mutual connectivity, energy, construction of economic zones, etc. Such major cooperative projects as China-Laos Railway, Nam Ou River Hydropower Station, Saysettha Such major cooperative projects as the China-Laos Railway, Nam Ou River Hydropower Station, Saysettha Development Zone, MohanBoten Economic Zone, Ground Station for “Lao Sat-1” have not only created jobs and increased revenue for relevant regions, but also brought about benefits to Laos’ long term development, becoming the new engine of economic growth. With high degree matching and complementarity in geographical position, society, and culture, as well as economical features and development strategy, the two countries have a broad prospect for cooperation, offering a lot of investment opportunities for their enterprises. With domestic peace and stability, Laos has extensive room for development. Its economy has maintained a medium–high growth in the recent years. Its 7.02% growth rate of 2016 is not only much higher than the average global figure but also above the 6.5% average of the emerging Asian economies. Laos has the potential for medium–high growth in the future, which means stable environment and many opportunities for investment. The accelerated alignment of the development strategies of the two countries has provided broad prospects for their trade and economic cooperation. China and Laos are comprehensive strategic cooperation partners. During the state visit by Chinese President Xi Jinping to Laos in November 2017, the two countries reached agreement on further deepening their strategic alignment. In the future they will carry out extensive practical cooperation under the framework of China’s Belt and Road Initiative and “13th Five-Year Plan,” and Laos’ state policies of “turning itself from a land-locked country into a land-linked country,” the “Eighth Five-Year Plan,” and “Building Laos into the battery of Southeast Asia.” The two neighbors have strong economic complementarity with similar culture and easy communication. Being in the medium stage of industrialization, China has its equipment level at the middle of the global industrial chain with high performance-cost ratio, and its export is mainly capital intensive and technology intensive. Laos is still in the initial stage of industrialization and is in urgent need of China’s capital, technology, and talents. In his article “China and Laos: Working Together for a Community with Shared Future and Strategic Significance,” published in the Laotian media, Chinese President Xi Jinping put forward the creation of four communities of shared future: to strengthen strategic communication and build a community of shared future

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based on mutual respect and mutual trust; to enhance the complementarity of development strategies and build a community of shared future through mutual assistance; to expand practical cooperation and build a community of shared future for mutual benefit; to increase people-to-people exchange and build a community of shared future featuring mutual learning With the acceleration of strategic alignment, pragmatic cooperation between China and Laos is already in the fast lane, which is sure to open bright prospects for multi-field cooperation between the two countries. China has cooperated with Lao PDR through various economic activities. Since in the mid-1990s, the cooperation has been constantly growing. It is witnessed by the increase in import commodities from China from 11.4% in 2006, 14.8% in 2010, 17.4% in 2012 and rising to 26% in 2014 respectively (JETRO, 2016). Meanwhile, Chinese investment in Lao PDR was also increased from 201.722,197 USD in 2006 to 1.070.319.017 USD in 2010. During 1989–2012, Chinese investment in Lao PDR was worth 4.177 million USD, ranking as the third largest investor in Lao PDR. Later, by 2013–2014, the value of investment reached 5.400 million USD, enabling PR China to be the first largest investor in Lao PDR. In 2013, only 245.033 Chinese tourists visited Lao PDR and this dramatically increased to 422.440 in 2014. This means the number of Chinese visitors increased 72.4% within one year. In addition, Lao PDR imported commodities from China was worth 511,213 USD in 2013 and rose to 537,706 USD in 2014. If the import values are converted into percentage, it indicates that a slight decrease in the imports from PR China, going down from 15.53% (2013) to 13.58% (2014). Meanwhile, Lao exports to PR China was increased from 333,404 million USD; accounting for 14.04%, in 2013 to 695.876 million USD in 2014 which equals to 36.53% of total Lao exports. Recently, the notable outcomes of Laos-China cooperation are China helped to launch the first satellite for Lao PDR on November 21, 2015 and the investment in the railway construction project whose groundbreaking ceremony was held on December 2, 2015, on the occasion of celebration marking the 40th anniversary of Lao PDR. These manifest that the cooperation of the two nations becomes constantly greater and wider.

102.4 Tourism Cooperation The Visit Laos-China Year 2019 was launched on January 25, 2019, in Vientiane, the capital. Minister of Information, Culture and Tourism Bosengkham Vongdara and Chinese Minister of Culture and Tourism Luo Shugang together read congratulatory letters from the leaders of both countries at the opening ceremony held at the National Culture Hall. After that President of China sent a congratulatory message on the launch of the China-Laos Tourism Year 2019 in Vientiane, expressing his hope for deepening understanding and friendship between the two peoples. China is set to become a key market for the Lao tourism industry as official data shows that the number of Chinese visiting the country has risen significantly over

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the past six years. According to the Statistical Report on Tourism in Laos 2017, the number of Chinese visitors has seen consistent growth since 2012, suggesting that China will become a key market for the domestic tourism industry. In 2012, only 200,000 Chinese tourists visited Laos, increasing to 245,000 in 2013, to 422,440 in 2014, 511,436 in 2015, 545,493 in 2016, and rising to 639,185 in 2017. Lao tourism officials acknowledged this positive trend and expressed confidence that the number of Chinese visitors to Laos will continue to increase due to enhanced regional connectivity. The growth in Chinese visitors increased China’s share of tourist arrivals from just 6 percent in 2013 to 16% in 2017, according to the Lao Ministry of Information, Culture and Tourism’s Tourism Development Department. Based on an analysis of this trend and other developments, it is very likely that Chinese tourist arrivals will account for a bigger share of the Lao tourism market. This is due to the emerging middle class in China. Chinese people are becoming wealthier, and this will enable them to travel around the region, including the Mekong countries. Laos is building a railway from its border with China to the capital Vientiane. Improved land transport connectivity will lead to more Chinese tourists coming to Laos. Laos has numerous tourist destinations that can attract Chinese travelers, including the world heritage sites of Luang Prabang and Wat Phou Champasak. Laos also has many scenic attractions and places of cultural interest, according to the daily. Laos has announced plans to draw more Chinese tourists to the landlocked country that stands at the heart of the Mekong Region. According to the Vientiane Times report, it will feature cultural shows by Lao and Chinese troupes along with Lao and Chinese food fairs, and a photo exhibition. The Chinese side has asked for a Chinese Culture Week to be hosted in Vientiane in April, which would also mark the 58th anniversary of diplomatic ties between the two countries. The week-long event should take place just prior to a planned state visit to China by Lao PDR, when Lao cultural dance performers will stage a cultural show in Beijing. In addition, a tourism management event will be hosted in June or July in Champassak province in southern Laos. Another highlight of the year’s activities will be the celebration of the Moon Cake festival in September at the World Heritage town of Luang Prabang. According to the plan, the two sides will also arrange a Lao Culture Week in Changsha, the capital of China’s Hunan province. The event will feature stage shows by Lao artists, a Lao food fair, a tourism exhibition, and a seminar to promote Lao and Chinese tourism. A similar Lao Culture Week will also be organized in Chengdu, the capital of China’s Sichuan province. However, the dates for these culture weeks have not yet been decided. The minister of tourism has also recommended that the Lao government waive the visa requirement or reduce the visa fee for Chinese visitors in 2019, to encourage travel. He also called for an end to “inappropriate inspections and charges along roads and at tourist sites,” while suggesting tour operators should no longer be required to obtain a certificate before bringing in tour groups from China. Around 568,800 Chinese travelled to Laos in the first nine months of 2018, an increase of 35% compared to the same period in 2017. In 2017, the country welcomed 639,185 Chinese visitors making it the third largest supply market after first placed Thailand with 1,797,803 visits and Vietnam in second

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place with 998,400 visits. Laos is planning to introduce easier visa services during 2019 including an online eVisa facility similar to the highly successful Myanmar model. But more needs to be done to encourage airlines to fly to Laos and overland routes need to be improved. Security on the popular Vientiane-Luang Prabang route needs to be significantly upgraded. Foreign travel advisories still warn travelers to fly between the two top tourist destinations rather than go overland, a distance of just under 400 km. It will focus on increasing travel from China under a planned Visit Laos-China Year 2019 campaign, but again there is a lack of information on specific projects involved in the promotion. However, travel industry sources in Laos say the emphasis should be on introducing more direct air links and establishing incentives to support up-market Chinese tour operators to create new itineraries at the top end of the market. They claim the year-long China promotion should focus entirely on encouraging travel by individuals and families rather than low-priced, high volume tour groups. But the official word is that the ministry will cooperate with Chinese authorities to launch colorful activities as well as improve the quality of hotels and restaurants. The Lao government has set a target to increase Chinese visits from 400,000 to one million and by doing so the 5 million target would be reached by the end of 2019. More than 2.9 million leisure trips were logged in the first nine months of this year, an increase of 3.2% over last year, according to the Tourism Development Department, Ministry of Information, Culture and Tourism. To promote the development of tourism, Laos has adopted many new measures to develop the market, with regional tourism integration and combined cross-border tourism as important strategies. Giving high expectations to China, Laos began to quicken up the steps in January 2017 for cooperative development of tourism of its three northern provinces and the Xishuangbanna, Region of China to promote the construction of the cooperative cross-border tourism area and the experimental border tourism area. To absorb more tourists from neighboring countries, Laos further simplified the relevant visa application procedures in February 2017. According to the new regulation, it is only necessary for Chinese tourists to produce a passport or a travel permit to enter Laos. Now Laos has opened 15 international tourism ports and signed cooperation agreements with over 500 foreign tourism companies. Now there are quite a number of direct air routes between Laos and China, which greatly enhance the rapid development of bilateral cooperation. By the completion of the China-Laos Railway in 2021, more Chinese tourists will be able to go to Laos by train.

102.5 Conclusion Lao PDR is situated in the Mekong River Basin, Laos is rich in sightseeing resources, boasting 1900 tourism sites including 1000 natural scenic spots, 534 cultural heritage sites and about 300 sites of historic relics. The beautiful scenery and simple and natural environment make tourism the country’s second largest pillar industry after

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mining. The Lao Government predicts that there will be over 6.2 million tourists to visit the country in 2020 and its tourism revenue will reach 1 billion U.S. dollars. With interlinked ideals and far-sighted strategic relations, China and Laos have broad space for cooperative development. The common mission and dream have fast combined the future and destiny of the two countries. It is mutually agreed to accelerate the alignment of China-proposed Belt and Road Initiative and Laos’ strategy of “Turning the Land-locked Country into a Landlinked Country” to jointly construct the Sino-Lao economic corridor, enhance the China-Laos Railway and other landmark projects, and upgrade the scale and level of mutual economic cooperation. It is also agreed to promote the complementarity of the strengths of the two countries, and to deepen cooperation in improving production capacity, finance, agriculture, energy, resources, water conservancy and hydropower, communication, infrastructure, health and medical care, and other fields so as to make the pragmatic cooperation better benefit the grass root people of the two countries. At present, the strategic alignment of China and Laos is accelerating, with their pragmatic cooperation moving on the fast lane. The two countries will definitely open a bright prospective in various fields so long as they join hands in their cooperation with mutual trust. Noting that China and Laos enjoy mutual political support, comprehensive economic cooperation and constant deepening of traditional friendship, Xi Jinping said China views Laos as a good neighbor, friend, comrade, and partner. He also said China is willing to work with the Laotian side to better dovetail development strategies, enhance cooperation on Belt and Road construction, and promote the China-Laos comprehensive strategic partnership of cooperation to achieve new fruits.

Suggested Reading Exports and Poverty Reduction: Oudomxay, Northern La PDR . Mekong Institute Research Working Paper Series 2012 (No. 7/2012). Foster, G. M. (1969). Applied Anthropology. Boston: Little Brown and Company. JETRO. (2016). Laos Over view. JETRO Vientiane Office, 12–14. Kingkhambang, K. (2012). Impacts of Chinese Investments on Agricultural Leebouapao, L. (2008). Lao PDR Country Report. H Soesatro, Developing Roadmap toward East Asian Economic Integration, ERIA Research Project Report 2007–1–1, pp. 117–120. Phommahaxay, A. (2013). Impact of FDI on Economic Growth of Lao PDR. Mekong Institute Research Working Paper (p. No. 9/2013). Seneduangdeth, D. (2014). Local Transformation under Development of Regional Integration: A Case of Savan-SENO Special Economic Zone. PhD Disertation. Vientiane: Sengsouvanh Printing Co.,LTD. S-NCSEZ. (2013). Special Ecoomic Zone Development and Management in Lao PDR. Vientiane Capital: S-NCSEZ. Zhigang, J. (2015). Promote One Belt and One Road Initiative with Pragmatic Measures.

Chapter 103

Main Directions of Agricultural Food Trade and Economic Cooperation Between the Republic of Kazakhstan and the People’s Republic of China Ademi Yerassylova

Kazakhstan occupies a strategic position in the trade exchanges between East and West, Europe and Asia, Russia and China. At the same time, China’s initiative to restore the New Silk Road to Europe happens to coincide with Kazakhstan’s Bright Road economic policy and the integration plan of Eurasian Union, which aim to smooth transportation across Eurasia. This also means a great opportunity for Kazakhstan to leverage global trade as the new engine of national economic development. With the deepening of multilateral strategic cooperation with the People’s Republic of China (hereinafter referred to as China), Kazakhstan’s international status has been further strengthened. Considering the favorable socio-economic and geo-economic conditions, the Government of the Republic of Kazakhstan and the Government of the People’s Republic of China signed the Memorandum of Understanding on Implementing the Cooperation Plan between the Construction of the Silk Road Economic Belt and the New Bright Road Economic Policy (September 2019), and the Ministry of Trade and Integration of the Republic of Kazakhstan also signed a relevant Memorandum of Understanding (September 2019) with the Ministry of Commerce of China. The Ministry of Agriculture of the Republic of Kazakhstan and the General Administration of Customs of China also signed the Roadmap for Activating Trade Relations between Kazakhstan and China, which stipulates issues concerning the expanded scope and scale of trade between China and Kazakhstan, optimized trade structure,

A. Yerassylova (B) Department of Strategic Analysis and Forecasting, National Agricultural University of Kazakhstan, Almaty, Kazakhstan e-mail: [email protected]

© Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_103

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and the increased share of high-tech products in bilateral trade1 and other related issues in the field. The two sides also signed 18 protocols.2 The Kazakhstan-China Cooperation Committee is co-chaired by the Deputy Prime Ministers of the two countries. Within the framework of the working group, the two sides mainly cooperate in the following fields to promote agricultural trade: – With the support of the Ministry of Commerce of China, signing orders for Kazakhstan’s exports to China, including exporting Kazakhstan’s agricultural products to Shanxi Province of China within the framework of interregional cooperation – Promote Kazakhstan’s agricultural products to the Chinese market through ecommerce platform – Pilot project for the establishment of a veterinary and phytosanitary laboratory and an e-commerce platform at the Horgos port – Pilot project for the establishment of a joint veterinary laboratory in the state of East Kazakhstan. In order to strengthen and promote economic and trade cooperation between Kazakhstan and China, Kazakhstan established the “Horgos-Dongmen” Special Economic Zone based on the Decree of the President of the Republic of Kazakhstan on November 29, 2011. This is a Harbin-China Industrial Park prioritizing the development of transportation and logistics. The park covers a total area of 5740 hectares and is designed to expand the trade of all products (including agricultural products) on the basis of establishing an e-commerce development and logistics center platform. This special economic zone is governed by Law of the Republic of Kazakhstan

1

In order to solve the above-mentioned problems, the Commission on Counting, Regulation, and Measurement of the Ministry of Industry and Infrastructure of the Republic of Kazakhstan has set up a special branch responsible for agricultural issues, which is responsible for the expansion of trade areas between China and Kazakhstan, the optimization of trade structure, the expansion of trade scale and the increase of the share of high-tech products in bilateral trade. The Roadmap for the Development of Organic and Halal Food Production complies with the provisions of the various state bodies (the Ministry of Foreign Affairs, the Ministry of Industry and Infrastructure Development, the Ministry of Health, the Ministry of National Economy, the Ministry of Finance, and the Ministry of Social Development of the Republic of Kazakhstan). 2 The agreements signed by the Ministry of Agriculture of the Republic of Kazakhstan and the General Administration of Customs of China include: Pork Inspection, Quarantine and Hygienic Requirements, October 1, 2019. Flax Inspection, Quarantine and Hygienic Requirements, October 1, 2019. Inspection, Quarantine and Hygienic Requirements for Wool Raw Materials, September 23, 2019. Hygienic Requirements for Dairy Products, September 23, 2019. Sanitary and Phytosanitary Requirements for Barley Export, June 6, 2019. Inspection, Quarantine and Hygienic Requirements for Duck Meat, February 26, 2019. Beef Inspection, Quarantine and Hygienic Requirements, November 23, 2018. Inspection, Quarantine and Hygienic Requirements for Frozen Beef, November 23, 2018. Quarantine and Health Care Requirements for Equine Animals for Export Slaughter, November 23, 2018. Honey Inspection, Quarantine and Hygienic Requirements, November 23, 2018, etc.

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No. 469-IV of 21 July 2011 On Special Economic Zones in the Republic of Kazakhstan. The Ministry of Industry and Infrastructure Development of the Republic of Kazakhstan is the managing and coordinating body of the special economic zone. Under the current situation, China and the Republic of Kazakhstan are developing trade relations by establishing logistics complexes in the two countries. The two countries jointly participate in the construction of transportation infrastructure and build up transportation corridors, which are prerequisites for achieving economic growth, including launching agricultural products on the international market, strengthening regional integration, and reaching regional economic balance. In this context, the establishment of a unified transport corridor has become one of the most important conditions for food and food trade cooperation in the agricultural field. The China-Kazakhstan international logistics base built in Lianyungang, a coastal city in eastern China, is one of the important projects and one of the ChinaKazakhstan cooperation projects implemented within the framework of the “Bright Road” plan. Many exports from China and Southeast Asia are gathered before being transported on international trains from Kazakhstan to other countries in Central Asia and Europe. In this way, it has also ensured that Kazakhstan’s export and transit goods can be directly connected with ports. In recent years, the total import and export of goods between countries in this direction has exceeded 8 million tons, the container throughput has exceeded 100,000 TEUs, and the total import and export of container goods has reached 2.3 million tons. In the past, Kazakhstan’s transportation system was only connected with Russia, with no routes connecting with other countries. Therefore, as Kazakhstan regards the interests of economic development as one of the most basic conditions to guarantee national security, it promptly proposes to solve the most important and urgent issue facing the country, that is, to make great efforts to develop the transportation infrastructure and break the deadlock in transportation. Globally, China is highly interested in establishing direct transportation links with Central Asia, Europe, and the Middle East by way of Kazakhstan, with the goal of building an extensive infrastructure network to transport Chinese goods to the West faster. In order to wean off its dependence on Russia in this field, China is developing other transportation routes that can bypass Russian territory and enhance its transportation capacity into Central Asia, the Caucasus, and European markets. In this context, the construction of Caspian Sea Trunk Terminal Port Project has been put on the agenda. Chinese companies are working to modernize the port of Aktau, Kazakhstan, and have expanded their docks at Couric Port. Cargo traffic in Kazakhstan’s Caspian seaports is on the rise on a yearly basis, with the share of petroleum products declining and the share of dry goods increasing. It is estimated that the cargo entering and leaving through Couric port alone will increase by 4.5 million tons. Besides, the Azerbaijan-Georgia-Turkey railway has been put into operation, and the Caucasus route is the preferred route for goods transportation. Also, China’s projects are located at areas with the most complex geopolitical conditions. Nowadays, there are many articles discussing China’s potentially dominant role in exerting political and economic influence on countries along the “Belt and Road

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Fig. 103.1 Agricultural products trade between Kazakhstan and China

Initiative” (including Central Asian countries). However, in our view, it seems inevitable that China’s economic influence on Central Asian countries including Kazakhstan is expanding. The Silk Road is mainly a route for trade, and the Silk Road Economic Belt aims to develop trade between western China and Central Asian countries. China plays a special role in diversifying Kazakhstan’s agricultural exports due to the shared border between the two countries. Moreover, trade protectionism is rampant in Eurasian countries, with many barriers and restrictions set up to trade, posing great challenges for Kazakh entrepreneurs in exploring the markets of Eurasian countries. Therefore, the Chinese market is increasingly becoming one of the strategic areas in Kazakhstan’s export. The total trade volume between Kazakhstan and China increased by 20% from 2014 to 2018. In 2018 alone, the total trade volume between Kazakhstan and China reached $425 million ($354.4 million in 2014). Meanwhile, Kazakhstan’s agricultural trade has kept surplus since 2016 (see Fig. 103.1). In the past five years, Kazakhstan’s agricultural exports to China have doubled ($126.2 million in 2014 and $258.3 million in 2018). The largest share of agricultural products exported from Kazakhstan to China is wheat and mixed wheat, accounting for 42%, followed by sunflower seeds (13%), sunflower seed oil (9.2%) and rapeseed oil (8.5%), cotton fiber (7.2%), other nonvolatile vegetable oils (7.1%). Compared with 2017, the export value of cotton fiber increased threefold ($16.8 million) in 2018, natural honey increased 1.3 times ($200,000), wheat and mixed wheat increased 0.7 times ($99 million), wheat flour increased 2 times ($8.3 million), soybean increased 1.4 times ($7.6 million), and rapeseed oil increased 2 times ($20 million). Wheat bran exports rose 2.7 times ($5.6 million). The foreign trade surplus is on the rise. According to the data in 2018, the import volume decreased by 35.7% compared with 2014, and the total import volume in 2018 was $168.2 million, down $60 million compared with 2014. In 2018, China’s

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agricultural products accounted for 8.9% of imported agricultural products (5.4% in 2014). Among the agricultural products imported from China, citrus fruits accounted for the largest share of 16.1% ($26.2 million), fresh tomatoes accounted for 10. 4% ($16.9 million), other vegetables account for 9.7% ($15.8 million), ketchup and other processed canned food accounted for 9.2% ($14.9 million), apricots, sour cherries and sweet cherries accounted for 5. 9% ($9.5 million), and apples, pears, etc. accounted for 4. 2% ($6.8 million) (see Fig. 103.2). In recent years, Kazakh enterprises have had great success in developing the Chinese market. At the beginning of 2019, Kazakh enterprises that passed the import license certification of China Customs3 included 77 aquatic products processing enterprises, four honey production enterprises, five mutton processing enterprises, five other food processing enterprises, one food storage enterprise, two feed production enterprises, seven grain depots, eight soybean processing enterprises and five rapeseed oil and syrup production enterprises, five soybean flour and straw production enterprises, 11 barley production enterprises and four corn production enterprises. In 2018, Kazakhstan exported 50.3 tons of mutton (by weight), 3641.8 tons of frozen fish, 60.9 tonnes of natural honey, 550,000 tonnes of wheat, 32,300 tonnes of flour, 17,300 tonnes of soybeans, 55,700 tonnes of vegetable oil and 4200 tons of chaff to China. In 2018, the General Administration of Customs of China lifted the ban on footand-mouth disease risk warning in overseas areas, which opened the channel for Kazakh meat products to access the Chinese market. The two sides determined the quarantine standards for meat products in the Republic of Kazakhstan and conducted quarantine inspection on meat products. In the same year, the Ministry of Agriculture of the Republic of Kazakhstan and relevant Chinese parties reached an agreement on quarantine requirements for Kazakhstan’s export of alfalfa, rapeseed, barley, and corn to China, and conducted two inspections on barley and corn processing enterprises in Kazakhstan. As of 2018, the number of agricultural products exported by the Republic of Kazakhstan to China reached 919 million tons, with a total value of $258.3 million. East Kazakhstan, Turkestan (including Shymkent), Kostanai, Almaty Municipality of the Republic and Nursultan City, the capital city, are the most active regions in Kazakhstan engaged in exporting to China. While Akmola mainly exports wheat and other grains, Kostanai mainly exports mixed wheat, and Almaty mainly exports vegetable oil.

3

According to the international trade rules of the World Trade Organization, only enterprises listed in the inspection and quarantine results list of animal quarantine agencies can export animal products and feeds to importing countries. According to the regulations of the People’s Republic of China, enterprises producing animal and plant products shall not only meet the requirements of various products in the agreement but are also subject to Chinese testing before being included in the list. Food exports shall meet Chinese quality standards, and also meet the standards of different brands.

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Fig. 103.2 Agricultural trade structure between Kazakhstan and China in 2018

A. Yerassylova

103 Main Directions of Agricultural Food Trade and Economic Cooperation … Region

813

Quantity/100 million tons Amount /USD 10,000 Proportion, %

Almaty City

2.658813

6104.94

23.6

Nursultan City

1.880316

5679.36

22.0

East Kazakhstan

1.476188

4009.38

15.5

3087.32

12.0

Turkestan state; Shymkent 0.398382 Kostanai

0.904455

1999.7

Total

9.189822

25,813.25

7.7 100.0

Note Statistical data of the Statistical Committee of the Ministry of National Economy of the Republic of Kazakhstan

Importantly, the opening up of the Chinese market to Kazakhstan’s wheat, wheat bran, oil and other crops has also triggered great interest from Chinese buyers. The natural, environmentally friendly, and high-quality food products from Kazakhstan are strongly competitive in the Chinese market. Cooperation in investment is also an important direction of cooperation. The Ministry of Agriculture of the Republic of Kazakhstan and the government of the People’s Republic of China have signed an agreement on cooperation in the field of agriculture, and Kazakhstan will translate this into actions within this framework agreement. One of the major projects is the agricultural products processing logistics park built by Xi’an Aiju Grain and Oil Industrial Group in North Kazakhstan, with a total investment of $58 million. Aiju Grain and Oil Industrial Group is one of the leading enterprises in Shaanxi Province, China. It has made huge investments in constructing a systematic project and put in place a strong and complete logistics chain system by combining grain and oil planting and deep processing of agricultural products to form a full-cycle high-tech processing joint system. Aiju Grain and Oil Industrial Group has built a factory in Ilichevsk, and also a logistics base on the ChinaKazakhstan border (Alashankou) and Xi’an, China. In this way, the three major tasks of production, delivery, and sales can be conducted and finished in Xi’an, which not only ensures the quality of products, but also the timely delivery and sales of products. When it comes to the prospect of Kazakh food in China, first of all, it is worth noting the strategic nature of cooperation between Kazakhstan and China, which has been emphasized many times by the heads of state of the two countries on different occasions and levels. Generally speaking, China’s priority is to meet people’s growing needs for food. Therefore, it is very important for China to carry out dynamic trade and investment cooperation in agriculture with Central Asian countries including neighboring Kazakhstan. At the same time, it also brings great opportunities for Central Asian countries, such as improving infrastructure, increasing trade and cross-border investment. To this end, Kazakhstan should make extra efforts to diversify agricultural production and allocate more resources, so as to cultivate crops in a targeted manner that are in great demand in the Chinese market. At present, Kazakhstan has the potential to meet China’s huge and growing demand for certain agricultural products (see Fig. 103.3). In the Chinese market,

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Fig. 103.3 Special conditions for China-Kazakhstan trade cooperation

Kazakhstan’s most competitive (or potentially competitive) commodities include wheat, sunflower seeds, rapeseed, and beef.

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With the change of the dietary and nutrition structure of Chinese people, Kazakhstan should continuously expand and diversify the production and export of agricultural products, and work to export high value-added products that meet stricter food quality requirements and safety standards. Currently, bulk primary products occupy a dominant position in the export structure of agricultural products in Kazakhstan, while high value-added products mostly come from imports. Wheat accounts for more than one third of its total agricultural exports. This export structure is difficult to adapt to the changes in China’s food demand as China’s agricultural imports are shifting to more high value-added products. The agricultural sector of Kazakhstan cannot take full advantage of the benefits of the trade agreement between China and Kazakhstan in the short term. The main obstacle lies in the difficulty to achieve fast growth in the export potential of the agricultural sector. The characteristics of this industry include: – Low crop yields. – High production cost of agricultural products. – Low production capacity of animal husbandry. The low commodity rate of agricultural production (except cereals) has greatly inhibited technological innovation in production and restricted the competitiveness of agricultural products in Kazakhstan (Fig. 103.3). In order to fully tap the export potential of its high value-added products, Kazakhstan should break through the existing constraints in the value chain of agricultural products, including production costs and trade-related restrictions. Establishing strategic trade relations with China is the logical starting point to solve this problem. In the long run, it will also provide an opportunity to attract innovative technologies that can promote intensive production and resource conservation. With innovation and development, Kazakhstan will enjoy a huge domestic market and enhance the potential of the agricultural sector, so that it will not only produce wheat and sunflower seeds that are competitive for export, but also export meat, especially marbled beef, soybeans, vegetables (especially vegetables from the temperate zone) and processed products, fruits (including canned products), horse meat, and feed crops such as soybean meal and bran and wheat bran.

Suggested Reading “Agricultural Products of Kazakhstan in the Chinese Market”, official website of the Embassy of Kazakhstan in the People’s Republic of China, http://www.mfa.gov.k. Ministry of Agriculture of the Republic of Kazakhstan: Memorandum on Phytosanitary and Protocol on Standards for Pork Export from the Republic of Kazakhstan to China, Prime Minister official website, https://primeminister.kz. Statistics from Kazakhstan National Economic Commission, http://stat.gov.kz.

Chapter 104

Kyrgyzstan and China: Economic Growth and Inclusive Development Kubanychbek Toktorbaev

In 2013, during his visit to Central and South Asian countries, President Xi Jinping of the People’s Republic of China proposed the Belt and Road Initiative (BRI), which aims to expand mutually beneficial economic cooperation and build a community of shared future between China and Central Asia as well as Asian countries. Today, the Belt and Road Initiative is regarded as one of the most important and promising international projects in the world. The main objectives of the project are to deepen the economic integration of the region, remove barriers to trade and investment, build a unified transport infrastructure, reinforce the importance of national currencies, and increase cooperation. After years of development, the Belt and Road Initiative has become a new bridge connecting China and Central Asia, providing more opportunities for all parties to deepen mutually beneficial cooperation and achieve common development and prosperity. In January 2017, President Xi delivered a keynote speech titled “Jointly Building a Community with a Shared Future for Mankind” at the UN headquarters in Geneva. President Xi stressed that China embraces the concept of building the community with a shared future for mankind and will work hard to implement it so as to promote global peace, development, and prosperity. In 2018, during a trip to Qingdao, President Xi once again put forward the idea of building a global community with a shared future for mankind, which has received positive responses and wide support across the world. This proposal by China is fully in line with the needs of social development and the common interests of all peoples around the world, which not only helps to promote world progress and economic development but also contributes to global peace and prosperity. It should be noted that the most important feature of this proposal is that it is open to all interested countries in all regions of the world and has a wide geographical scope. The idea K. Toktorbaev (B) National Institute for Strategic Studies of the Kyrgyz Republic, Bishkek, Kyrgyzstan e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_104

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of building a community with a shared future for mankind has also been highly appreciated by countries all over the world. It is now included in important documents of international organizations such as the United Nations and other international mechanisms. The “China-Central Asia-West Asia Economic Corridor” is one of the important projects China and Central Asian countries have jointly implemented. This Corridor starts from Xinjiang of China in the east and goes westwards through Central Asia to the Persian Gulf, the Mediterranean coast, and the Arabian Peninsula. The Corridor aims to promote economic integration between China and the countries of Central and West Asia, with priority projects planned initially in the transport, energy, and fuel sectors. Central Asia occupies an important position in China’s foreign policy as it borders China’s Xinjiang Uygur Autonomous Region, which shares ethnic, cultural, and religious traditions with the countries of Central Asia. Kyrgyzstan and China have a long history of good-neighborly friendship. Over the 27 years since the establishment of diplomatic relations, our two countries have been strengthening political trust, expanding economic cooperation, and deepening cultural and people-to-people exchanges. The geographical proximity of our two countries provides great opportunities for developing our relations in the fields of economy, trade, science and technology, culture, and people-to-people exchanges. In order to achieve the above goals, the Routes Network of the Silk Road (Chang’an-Tianshan Corridor, jointly applied for by China, Kazakhstan, and Kyrgyzstan) was successfully included in the World Heritage List at the 38th session of the UNESCO World Heritage Committee in 2014. The ancient Silk Road has once again become a bridge connecting the hearts and minds of the peoples of China and Central Asia. In April 2019, President Jeenbekov of the Kyrgyz Republic paid a state visit to China and attended the Second Belt and Road Forum for International Cooperation in Beijing. During this period, President Jeenbekov had a very important meeting with President Xi. The two leaders shared broad consensus on strengthening cooperation between Kyrgyzstan and China within the framework of jointly building the Belt and Road Initiative and reached an agreement on synergizing the Belt and Road Initiative and the National Development Strategy of the Kyrgyz Republic for 2018–2040, with a view to comprehensively enhancing cooperation between the two countries and bringing more benefits to the two peoples. During his stay in Beijing, President Jeenbekov also visited the Beijing Performing Arts Center and watched Manas, a folk opera originally produced by the China National Opera and Dance Drama Theatre. After the performance, President Jeenbekov said in his speech: “The epic Manas is the pinnacle of the spiritual world of the Kyrgyz people. I watched the opera tonight with great pride and joy. Your opera Manas expresses the highest respect of the Chinese people for the culture of Kyrgyzstan.” On behalf of himself and the Kyrgyz people, President Jeenbekov expressed his sincere gratitude to the entire cast and producers of the Chinese National Opera and Dance Drama Theatre for creating such an outstanding work of art and extended an invitation to them to perform in Kyrgyzstan. On 11 June 2019, the tour of China’s original folk opera Manas kicked off in Bishkek, where Kyrgyz art lovers witnessed its great triumph as a world-class cultural

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epic and an extraordinary monument in the history of world culture. The excellent opera Manas is an exquisite gift from the Chinese people to the Kyrgyz people. It has built a bridge between the cultures and spirits of our two countries. Greatly welcomed, it has also become a symbol of friendship and common prosperity among the peoples along the Silk Road. In June 2019, President Xi paid a state visit to the Kyrgyz Republic. This is the first state visit by a Chinese leader to Kyrgyzstan since President Jeenbekov took office. This visit is of great historical significance to the development of China-Kyrgyzstan relations. The leaders of the two countries set the basic framework for the development of China-Kyrgyzstan relations, looked forward to new prospects, reached important consensus on jointly building the Belt and Road Initiative, and signed agreements of great significance, with a positive impact on the future development and prosperity of the two countries. During his visit to Kyrgyzstan, President Xi said that the Belt and Road Initiative, which embodies good wishes for common development, would help countries overcome obstacles encountered in their development process, narrow the development gap between countries, share the fruits of development, and create a community of common interests and a shared future. With the support of China, Kyrgyzstan is actively promoting a series of strategic infrastructure construction projects, such as the new North–South highway construction project, the Bishkek-Torugart and Osh-Irkeshtam highway reconstruction projects, the irrigation system reconstruction project, the Datka-Keming 500 kV power transmission and transformation construction project, the Kara-Balta oil refinery project, the Taldybulak and Levoberezhny gold mine projects, and many road network reconstruction projects. These projects are having and will continue to have a positive impact on improving the living standards of the Kyrgyz people. At present, more than 500 joint ventures between China and Kyrgyzstan have been operating in Kyrgyzstan, creating a large number of employment opportunities and promoting the social and economic development of Kyrgyzstan. Under the vigorous promotion of China, in February 2018, the “China-Kyrgyzstan-Uzbekistan” international expressway connecting these three countries was officially opened. This new transport corridor has reduced the transit time of goods from 8 to 10 days to 2 days, significantly reducing transport costs and greatly promoting the expansion of trade activities among the countries. According to 2018 data, bilateral trade between China and Kyrgyzstan exceeded $2 billion for the first time, accounting for 30% of Kyrgyzstan’s total foreign trade. So far, China’s direct investment in Kyrgyzstan has reached nearly 250 million US dollars, accounting for about 43% of the total foreign investment attracted to Kyrgyzstan. China remains the largest foreign investor and the largest trading partner of Kyrgyzstan to promote its economic development. In recent years, China has provided about 1000 scholarships to Kyrgyzstan each year, subsidizing Kyrgyz students and experts to go to China for training or academic visits. So far, more than 4000 students from Kyrgyzstan have studied in China. Four Chinese Confucius Institutes have been established at the Kyrgyz National University, the Bishkek Humanities University and other universities in Kyrgyzstan.

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Today, more than 10,000 pupils and students are studying the Chinese language in Kyrgyzstan, and an increasing number of Kyrgyz people have signed up for the “Chinese Bridge” competition. The year 2019 marks the 70th anniversary of the founding of the People’s Republic of China. Over the past 70 years, China’s economic growth has repeatedly hit record highs and its GDP has increased by over 450 times, creating a miracle of economic development in the world. In 2018, China’s GDP exceeded 13 trillion US dollars, accounting for 15.9% of the world’s GDP, and remained the world’s second largest economy. Today, China is the world’s largest producer, largest trader of goods and largest holder of foreign exchange reserves. Over the past five years, China has contributed more than 30% to global economic growth, becoming the veritable number one economic engine of the world. The People’s Republic of China was, is, and will always be the most reliable good friend and partner of the Kyrgyz Republic. We hope and believe that strengthening friendship and amity will always be the priority of our two countries. In this regard, scholars, and experts of our two countries should play a more active role in developing the steady and sound China-Kyrgyzstan relations featuring good-neighborly friendship for generations. Thank you.

Chapter 105

“Community with a Shared Future for Mankind” and Japan–China-ROK Trilateral Cooperation Yona Kikuchi

This paper briefly examines the potential of the trilateral cooperation among the influential countries in East Asia, Japan, China, and South Korea, while China has proposed an initiative of “community with a shared future for mankind.” In the international community today, not only conventional security strives but also unconventional issues such as terrorism, communicable diseases, environment/natural disasters, financial crises, immigration/refugees, and energy are surfacing. Such global issues cannot be dealt with a single country, and they require multiple and various actors like international or regional institutions, Track II channels to counter. And today’s world needs an enhancement of global governance with a diverse range of actors. Having been rapidly developed since 1990s, China today has stronger commitment internationally as a key actor of forming a way of global governance, initiating ‘One Belt One Road,’ and establishment of the Asian Infrastructure Investment Bank are the example. China also helps the existing international institutions by assisting the United Nations’ Peace Keeping Operations, and participation in the World Trade Organization. Their “community with a shared future for mankind” has been heard practically from 2015 and ever since, after “destined community for neighbors” (“Community with a Shared Future for Periphery”) in 2013, and “Destined Community for Asia” (“A Community with a Shared Future for Asia”) and “China-EU destined community” (“Community with a shared future for China-EU”) in 2014. This initiative aims to reform the current international order and to promote a new type of power politics. The Belt and Road Initiative is a practical policy to implement it. In addition to China’s new initiative, it is critically important for the better global governance and building of regional order in Northeast Asia as well as in East Asia, Y. Kikuchi (B) The Council On East Asian Community, Tokyo, Japan e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_105

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that three countries sit in Northeast Asia, Japan, China and South Korea, to deepen the cooperation. The tripartite framework began as a breakfast meeting in 1999, on the sideline of the 3rd ASEAN Plus Three (APT) Summit Meeting. Since the three countries sit together for the first time then, Japan–China-ROK Summit has been organized annually at the occasion of APT Summit, and it’s been held independently since 2008. Henceforth, this year celebrates its 20th anniversary. In the Joint Statement of the 7th Japan–China-ROK Trilateral Summit, held in Tokyo last May, stated that the trilateral cooperation will be sought through a new concept named “Trilateral+X.” This concept was further developed at the Trilateral Foreign Minister’s Meeting in August this year, and the “Concept Paper on ‘Trilateral+X’ Cooperation” was adopted. The Paper touches upon the possibility of cooperation, especially in the area of economy and poverty reduction, with the three and other countries and fields, based on the win–win principle. What is essential for “pursuing the ‘Trilateral+X’ modality” is in economy and trade fields. The trade relations of the three countries are highly complementary to each other, so deepening of the economic ties via Free Trade Agreement, including the Trilateral FTA, and conclusion of Regional Comprehensive Economic Partnership (RCEP) in particular, are critically important. Given the size of the market, the realization of RCEP will lead to the integration of rules on FTA, new fields such as intellectual property rights and e-commerce among member states, as well as help develop further the production network and supply-chain in East Asia. At the same time, it would be worthy for the three countries to consider China and South Korea’s possible participation in Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTTP). The CPTTP will cover Asia–Pacific with a wide ranged, twenty-first century rules – on intellectual property rights, e-commerce, dripline on state owned enterprise, the environment, etc., and make a huge, free, and fair market. The FTAAP will be much more realizable if China and Korea join CPTTP. Meanwhile, the coordination on regional initiatives in East Asia (Free and Open Indo-Pacific (FOIP) by Japan, Belt and Road Initiative (BRI) by China, and New Southern Policy by South Korea) shall be coordinated. Japan has expressed its interest in taking part in BRI on conditions like transparency and fair procurement, etc. FOIP has 3 pillars of its focus: 1. rule of law, freedom of navigation, and promotion and installment of free trade; 2. pursuit in economic prosperity (connectivity, strengthening economic ties through EPA/FTA or investment agreement); and 3. peace and stability (capacity building in maritime law enforcement, humanitarian assistance, and disaster rescue, etc.). These overlap with what China has been pursuing in BRI, therefore FOIP and BRI in fact are collaborative. Together with the New Southern Policy, the coordination of the three countries has a big potential to enhance the regional cooperation, especially in economic and trade, in a wide-ranging area of East Asia to Africa, thereby contributing, if actualized, to the stability and prosperity of the international community. In reality, however, the trilateral cooperation has been faced with some hurdles. The most valuable function of the cooperation, the summit meeting has been postponed several times due to political issues such as of history or territory dispute,

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revealing its vulnerability. One of the ideas to help overcome such condition may be to find a shared goal, in another words, a common dream. What helped Germany and France reconcile the most after the World War II, though many factors were there, was the shared dream of European integration. In Northeast Asia, therefore, strengthening of the ties based on the existing initiatives of “Community with a Shared Future for Mankind” or “East Asia Community” can be possible.

Chapter 106

Openness, Cooperation, and Civilizational Dialogue on the Example of the Tajik-Chinese Comprehensive Strategic Partnership Parviz Muhammadzoda

Dear participants! Ladies and Gentlemen! First of all, I would like to express my gratitude to organizers for the invitation, warm welcome, high-level organization, and creating a platform for an open dialogue. Quite rightly about the current state of bilateral relations between the Republic of Tajikistan and the People’s Republic of China and the international authority of China during his speech at the Chinese Academy of Social Sciences, the Founder of Peace and National Unity, the Leader of the Nation, the President of the Republic of Tajikistan Emomali Rahmon stated: “We believe that our great neighbor, China, is a reliable friend and sincere partner and we express satisfaction with its sustainable development. We are witnessing the intensive development of China in all areas of the economy and public life, strengthening the country’s authority in the international arena.” I should emphasize that the past 70 years for the Chinese people have been 70 years to overcome difficulties and forge ahead, 70 years for the rebirth of the Chinese nation, and 70 years for the deep integration and common development of China and the world. Over the past 70 years, the aggregate capacity of China has steadily strengthened, its economic development has developed rapidly, and its international status has improved significantly. China has not only been widely recognized by the international community for its development achievements, but also its open and inclusive development concept, as well as a mutually beneficial model of cooperation, are deeply rooted in the hearts of the people.

P. Muhammadzoda (B) Deputy-Director, Strategic Research Center Under the President of Tajikistan, Dushanbe, Tajikistan e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_106

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As China opens its doors wider, China’s circle of friends in the world is also growing. Over the past 70 years, China, after going through great trials, has entered the trajectory of sustainable and intensive development. The 70 years that have passed since the foundation of the People’s Republic of China can be safely called successful, since these are 70 years of the active and constructive socio-economic development of the state, based on openness with the goal of creating the Community with a shared future for mankind. We should note that President Xi Jinping at the “One Belt and One Road” Forum on International Cooperation, the Boaos Asian Forum and other important events repeatedly emphasized: “China’s open doors will not be closed but will open even wider.” China will continue to demonstrate its responsibility as a great power, adhere to the reform of openness and continue to contribute to China’s wisdom and China’s program to promote world peace, development, and shared prosperity. Today, China, deservedly, is one of the most respected and influential states in the world, and its economy is the second most powerful in the world. In just a short seventy-year historical period, the people of China have achieved tremendous results, and the state is currently one of the five permanent members of the United Nations Security Council, while demonstrating the highest and most stable economic growth in the world. At the same time, the diplomacy of China deserves special attention, the reason for this is the foreign policy model pursued by officials in Beijing, building in strict accordance with the fundamental principles of the United Nations. China has become the largest industrial country, the largest trader of goods and the largest foreign exchange reserve country in the world, and the output of more than 200 kinds of industrial products ranks first in the world. According to the World Investment Report 2019 issued by the United Nations Conference on Trade and Development, with the continuous relaxation of market access and the continuous optimization of the investment environment, China has become the second largest foreign capital inflow country in the world for two years in a row. 129 Chinese companies made the Fortune 500 list in 2019. It is important to note that from the first days, the PRC adheres to a peace- loving policy in international relations, toughly opposing any manifestation of hegemony and expansion. Through peaceful development and coexistence, China successfully implements its diplomacy in all corners of our planet, the foundation of which since 1953 has been formed by the five principles of peaceful coexistence. Over the past 70 years, from the “five principles of peaceful coexistence” to the “concept of relations: kindness, sincerity, mutually beneficial, and inclusive,” the diplomatic concept of China has also constantly changed and developed, gradually gaining more and more recognition in the world. In the process of development and growth, China invariably adheres to the means of peaceful development, applies the concept of win–win cooperation, firmly supports the multilateral trading system and an open global economy, and actively contributes to the reform of the global governance system, the creation of a new type of international relations and the Community with a shared future for mankind. Today, the joint construction of “One Belt and One Road” has become a platform for

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the development of cooperation, causing great interest in the world, and the concept of the Community with a shared future for mankind has been included in a number of United Nations resolutions. Today, China will continue to demonstrate its responsibility as a great power, practice the Diplomatic Idea of Xi Jinping, support the diplomatic concept of “kindness, sincerity, mutually beneficial, and inclusive” relations, and work with other states in the world in search of common prosperity and development. The Republic of Tajikistan, being a neighboring country of great China, fully feels the principles of Beijing’s peace-loving policy, and the relations between Tajikistan and China have ancient historical roots. The spiritual history of the inter-civilizational interaction between Tajikistan and China today is experiencing a “rebirth.” The New Great Silk Road, about which the President of the Republic of Tajikistan His Excellency Emomali Rahmon clearly and convincingly wrote in his book Tajiks in the Mirror of the History, is currently being implemented not only in transport and economics, but also in the formation of a large Tajik-Chinese cultural project, the construction of a kind of “humanitarian bridge” connecting the two civilizations. The traditional layer of intercultural dialogue between Tajiks and Chinese dates back to antiquity. The modern layer of intercultural Tajik-Chinese interaction, which has absorbed traditional values and historical experience, can conditionally be presented as a fairly coherent system of institutional and spiritual components and projects that are organically integrated into the Tajik-Chinese strategic partnership. It is in the interests of both parties to enhance the role of cultural and humanitarian ties as a bridge between two neighboring peoples, contributing to the deepening of mutual understanding and the development of traditional friendship. Thus, in the spheres of culture and inter-civilizational dialogue, new projects and directions appear. There is a mutual popularization of folk art, cinema, visual arts, the development of education, including the study of the Chinese language in Tajikistan and Tajik in China, and much more. As you may know, the dialogue of cultures has its own specific set of facilities and “tools.” Sometimes its language is much stronger and more effective than political and economic vocabulary. This feature is practically confirmed today by the interaction of cultures of two independent states, Tajikistan and China. For twenty-eight years, Tajikistan and China, neighboring states, have traveled a path equal to a century. The key role was played by the leaders of Tajikistan and China, who saw mutual benefit in building mutually respectful, trusting, good-neighborly relations that meet fundamental national interests. As a result of joint efforts, the beginning of the third decade after the establishment of diplomatic relations was marked by their launch into a new orbit: the orbit of strategic partnership. But most importantly, both side see each other as good neighbors and reliable friends, stable and economically developed partners, confidently building a joint prosperous future. It should be noted that the main areas of bilateral cooperation are political, economic, trade and cultural-humanitarian spheres. Both parties carry out effective

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cooperation in the international arena and are members of authoritative international organizations, including the UN, SCO, and CICA, etc. Today, when mankind has faced a lot of acute challenges and threats in the face of international terrorism, drug trafficking, Tajikistan and Chinese collective security cooperation, foreign policy ideas, concepts and peaceful approaches are becoming even more relevant and in demand, as they contain fundamental principles that allow solving the existing problems peacefully in international relations. Just in such a difficult period of the development of world politics, taking into account new global realities, the Chinese initiative “One Belt, One Road” is timely and in demand, as it reflects and unites of the economic interests of many countries, including Central Asian states. Indeed, the main goal of the Initiative is to stimulate common development and prosperity, based on the principles of sharing the advantages of each side for the common good of all states along the Silk Road. The political mutual trust between our two countries has reached an unprecedented high level. Under the wise leadership of President of Tajikistan His Excellency Emomali Rahmon and the Chairman of China His Excellency Xi Jinping in relations between Tajikistan and China was opened a new chapter in history. The Chinese side highly appreciates the tremendous successes of Tajikistan’s development since its independence under the wise leadership of President Emomali Rahmon, and also appreciates the support and participation of Tajikistan among the first states in the joint implementation of the One Belt, One Road initiative. In April 2019, President Emomali Rahmon visited China to participate in the Second Summit of the “One Belt and One Road” Summit on International Cooperation, and in June, President Xi Jinping made a state visit to Tajikistan and took part in the CICA Summit. During the visit of President Xi Jinping to Tajikistan, the two heads of states signed a joint statement declaring that Tajikistan and China will strive to develop all-weather friendship and further contribute to the in-depth docking of the Belt and Road Initiative with the National Development Strategy of Tajikistan to 2030. The practical cooperation between the two countries in the joint construction of Belt and Road Initiative and other fields has been continuously deepened. Together, we need to improve and create new tools for interaction, look for new points for rapprochement, new channels for cooperation, using the resources and potential of all countries that supported the Belt and Road Initiative. China has maintained its status as the largest source of investment and major trading partner in Tajikistan, and more than 300 Chinese-funded enterprises are engaged in production and operation in Tajikistan. I want to emphasize that the government of our country is interested in actively building comprehensive cooperation and on this basis of strengthening confidencebuilding and friendly relations between our countries. At the end of my speech, I want to express confidence that the experience, technological, innovative, and investment opportunities of the countries participating in the Belt and Road Initiative can be used in the joint implementation of important and promising infrastructure and production projects. In turn, this contributes to the successful implementation of the idea of creating the community with a shared future

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for mankind, in which Tajikistan and the countries of Central Asia play an important role. In conclusion, I would like to once again thank the Chinese side for creating the favorable conditions for holding today’s meeting and confirm the readiness of Tajikistan for further mutually beneficial cooperation in achieving common goals. Thanks for your attention.

Chapter 107

China’s Partnerships with Countries in the African Region: A Shared Cooperation for Social and Economic Development Luckson Muganyizi Kaino

107.1 Introduction China’s cooperation in the developing world and in particular Africa began many decades ago with the construction of the Tanzania-Zambia railway (TAZARA) in the late 1960s, which became the China’s symbol of contribution to African economic development (Altorfer-Ong, 2009). The railway was constructed at the time when the South African region was engaged in the liberation struggle for independence against Portuguese colonialism and South African apartheid rule. Tanzania and Zambia were in the forefront helping freedom fighters to free their countries and thus the TAZARA railway paved the process of communication to the Southern African region. In particular, it enabled the easing landlocked Zambia’s economic dependence on Rhodesia and South Africa both of which were ruled by white-minority governments (Hall & Peyman, 1976; Monson, 2009). The TAZARA Railway, also called the Uhuru Railway (Freedom Railway) is a railway in East Africa linking the port of Dar es Salaam in east Tanzania with the town of Kapiri Mposhi in Zambia’s Central Province. The single-track railway is 1860 km (1160 mi) long and is operated by TAZARA Authority. To date, China’s concessional loans to Africa are on a scale rivaling those from the World Bank and the International Monetary Fund in terms of development finance outreach (AidData, 2018). The economic relations between China and African nations have generated much interest among development experts and practitioners over the last two decades. Since 2000, China has become Africa’s largest trade partner, while her investment and finance flows to Africa have also grown significantly (Bridges Africa, 2018). As such, China has become a major player on the continent, a partner with whom African countries can foster mutual beneficial L. M. Kaino (B) Josiah Kibira College, Tumaini University, Dar es Salaam, Tanzania e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_107

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economic relations in their development process. There is broad recognition that China’s engagement in Africa has positively contributed to the impressive growth experienced across the continent over recent years (Bridges Africa, 2018).

107.2 China-Africa Consultative Forum (CACF) China hosted the first China-Africa Consultative Forum (CACF) in Beijing in 2000 and this gave its new policy of engagement with Africa on a number of multilateral levels (IDE-JETRO, 2019). Due to the powerful Western interests that existed in Africa, China offered a unique package of economic, political and security inducements to fast track its entry into key natural resource producing regions of the continent (FOCAC, 2019). The package included debt relief, participation in peacekeeping operations on the continent, cheap loans linked to infrastructure development, support for Africa in global forums such as the United Nations (UN), World Trade Organization (WTO), International Monetary Fund (IMF) and World Bank, and in other areas for South-South cooperation (FOCAC, 2019). The first such meeting was attended by over 800 officials from China and 44 African countries. Representatives of 17 regional and international organizations, as well as business representatives also attended the conference. The South- South cooperation, the creation of an equitable and new international political and economic order were key issues of the cooperation. The Beijing Declaration of the Forum on China-Africa Cooperation and The Programme for China-Africa Cooperation in Economic and Social Development were the two key documents which emerged from the meeting. Specific plans included an expansion of trade, investment, joint projects, and increased cooperation in the fields of agriculture, transportation, medical care, the exploitation of natural resources and banking (FOCAC, 2019). The second FOCAC ministerial conference was held in Addis Ababa, Ethiopia in 2003. The conference was attended by Chinese Premier Wen Jiabao, along with seven African presidents and a number of other senior officials from African countries. More than 70 government ministers from China and 44 African countries attended the proceedings. The central theme of the second ministerial conference was on “pragmatic and action-orientated co-operation”. Premier Jiabao proposed a four point programme for the further consolidation of Sino-African relations through mutual support; democratization of international relations; meeting the challenge of globalization together; and enhanced co- operation at all levels. The conference produced the FOCAC Addis Ababa Action Plan 2004–2006 which further outlined future China-Africa co-operation. The political framework of the Addis Ababa Plan encouraged continued high-level exchanges, enhanced political dialogue, a renewed promise from Beijing to participate actively in African peacekeeping operations, and pledges to co-operate on a range of security related issues. The key outcomes of the 2006 Beijing Declaration at the FOCAC meeting included China’s intention to double its assistance to Africa by 2009, provision of US$3 billion in preferential loans and US$2 billion preferential buyer credits, establishment of a

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China-Africa Development Fund (CADF), building of an African Unity (AU) conference centre in Ethiopia, debt cancellation of interest free loans and other areas of economic reliefs (FOCAC, 2019).

107.3 The Cairo Meeting The sixth senior officials meeting of the Forum of FOCAC took place in Cairo, Egypt in October 2008. The meeting was intended to review the FOCAC process and consolidate the agenda for the next FOCAC Ministerial Meeting that was held in Egypt late in 2009. Representatives from China, 48 FOCAC African members, as well as regional organizations attended the meeting (FOCAC, 2008). The two key areas of discussions covered were “China-Africa agricultural cooperation and food security” and “infrastructure construction”. Then after, the Chinese new agricultural investment projects were planned for Sudan, Angola and Zimbabwe. Members also agreed to establish a new type of strategic partnership between China and Africa based on the principles of equality, mutual benefit and learning from each other. In addition, areas for future development within the FOCAC framework were proposed to include: • Expansion of high-level diplomatic exchange with African countries • Increased input from Africa in planning the FOCAC agenda • Prioritizing assistance to Africa to advance fulfillment of the Millennium Development Goals (MDGs) • Assisting Africa in strengthening food security.

107.4 The China-Africa Business Council One of the important initiatives to emerge out of FOCAC was the establishment of the China-Africa Business Council (CABC) which was launched in Beijing in 2005 with broad stakeholder participation (UNAIDS, 2018). Established with an initial capital of US$1 million provided by the United Nations Development Programme (UNDP), it was a joint initiative between UNDP, the Chinese Ministry of Commerce (MOFCOM) and the China Society of Promotion for the Guangcai Programme (Guangcai). The CABC has established offices in Baoding, Wuhan, Hong-Kong, Macao and Chongqing as well as in six African countries including Cameroon, Ghana, Kenya, Mozambique, Nigeria, and Tanzania. In early December 2008, the CABC concluded a seminar in Beijing focusing on the impact of the global financial crisis on China-Africa commercial relations. Leading Chinese think-tanks and African representatives in Beijing participated in the event. The seminar concluded that FOCAC continued to provide a solid framework for China and Africa to respond to and overcome challenges associated with the global crisis. These initiatives have seen trade between China and Africa soar. China-Africa

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Fig. 107.1 Chinese trade with and foreign direct investment in Sub-Saharan Africa, 2001–2008. Source IMF Direction of Trade Statistics (2006) and World Trade Atlas/Tralac (2008)

trading relations have been growing year after and the trend ten years ago still holds. Chinese trade with and foreign direct investment in Sub-Saharan Africa, 2001–2008 is shown in Fig. 107.1. China’s top trading partners in Africa in 2008 were as follows: Angola (24%), South Africa (17%), Sudan (8%), Nigeria (7%), Egypt (6%), and the rest of Africa (38%).

107.5 China’s Infrastructure Development in Africa Currently, China is involved in infrastructure projects in 35 African countries mainly in three sectors: power generation (especially hydropower), and transport (especially railroads), and ICT (mainly equipment supply) (ICTSD, 2018). The competitiveness of the Chinese construction industry at international level can be gauged from the performance of Chinese firms under open tenders. For example, Multilateral Agencies such as the World Bank and the African Development Bank (ADB) require unrestricted International Competitive Bidding (ICB) to take place on all significant contracts that they finance and the Chinese firms have managed to take the share of contract value in different segments of the market (ICTSD, 2018). The latter indicates the competitiveness of Chinese construction firms in the African region. In the African region, three countries have been listed to take a large share of Chinese investments and these are Angola, Nigeria, and Sudan. Below is the summary of the financed activities in these countries.

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107.6 Angola China’s involvement in infrastructure finance in Angola began in 2002 after the end of the civil war starting with the rehabilitation of rail and power transmission infrastructure and the installation of a new fiber optic link. The repair of infrastructure damaged in the country’s 27-year civil war started in the year 2004. The overall size of the line of credit was US$2 billion and this loan was backed by an agreement to supply China with 10,000 barrels of Angolan crude per day for a period of 17 years. This type of natural resource backed financing deal come to be known as the “Angola mode” (Chen, 2007). The interest on this loan was lowered to 0.25% from an initial level of over 1%, and the loan had a 3-year grace period and 15-year repayment term (Stellenbosch University, 2006). Tied to the Chinese loan was the agreement that the public tenders for the construction and civil engineering contracts be awarded primarily (70%) to Chinese stateowned enterprises approved by the Chinese government. In response, the China ExIm Bank made available a list of 35 Chinese companies approved by both the bank and the Chinese authorities to tender in Angola. China Ex-Im bank issued another US$2 billion loan reportedly devoted all to infrastructure needs. By year 2018, over 100 Chinese companies were active in Angola with approximately 60,000 Chinese workers employed on different projects there. Other project that China has undertaken in Angola is the construction of the national road that links the Angolan city of Uige to Maquela do Zombo. The project was estimated to cost around US$80 million. By 2016, Angola was China’s second biggest trading partner in Africa (Wikipedia, 2016).

107.7 Nigeria The cooperation between China and Nigeria dates back to 2002 with the agreement on the first phase of the National Rural Telephony Project (NRPT) when China’s two telecom giants ZTE and Huawei began actively pursuing equipment supply and network rollout projects for both fixed and wireless services in the country (Udeala, 2010). China Machinery and Equipment Import and Export Company (CMEC) and Shandong Power Construction Company agreed to a $390 million deal with the Nigerian Ministry of Power and Steel to build two gas-fired power plants with a total capacity of 670 megawatts. The plants geared to ease the electricity shortage in Nigeria and promote economic and trade cooperation between the two countries. Nigeria’s first loan from China came in 2005 to support construction of power stations at Papalanto, Omotosho and Geregu in Ogun, Ondo, and Kogi states. The deal was oil-backed such that in return CNPC (or PetroChina, which is CNPC’s listed arm) secured a deal to purchase 30,000 barrels of crude oil a day from the Nigerian National Petroleum Corporation (NNPC). China constructed 598 boreholes in 18 of the 37 Nigerian states including the capital Abuja to support the country’s water

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supply programme (UNAIDS, (2018). The aim of the free-aid water project was to provide clean drinkable water to ordinary Nigerians living in out-of-the-way areas. Nigeria also accepted another offer from China for the construction and rehabilitation of small and large dams for the National Water Supply Programme and irrigation. The Mambilla hydropower project was the biggest project ever taken by China on the African continent (Bami, 2013). In addition, China made contributions to the construction of a major LagosKano railway upgrading project, Abuja Rail Mass Transit project as well as a light railway system connecting Murtala Mohammed International Airport and Nmandi Azikwe International Airport with the Lagos and Abuja city centers respectively. As of 2017, Nigeria was China’s largest engineering contract market, second largest export market, third largest trading partner and major investment destination in Africa (Global Times, 2018).

107.8 Sudan Since 2001, China has provided US$1.3 billion to the finance of infrastructure projects in Sudan. The early infrastructure projects were all related to the power sector, beginning with construction of the El Gaili Combined Cycle Power Plant in 2001 and the QarreI thermal station in 2002 (Peter, 2011). China later financed three substantial thermal generation projects for coal-fired and gas-fired station in Port Sudan, Al-Fulah, and Rabak. Thus, a total of more than 2200 MW of new thermal generating capacity were added with Chinese support. The 1250 MW Merowe hydropower project dam constructed at US$1.2 billion was the largest international project that China had ever participated in at that time. This project has now been superseded by the Mambilla hydropower project in Nigeria, which will be more than twice the size of Merowe (Bami-Yuno, 2013). In the year 2008, developmental contracts to the value of US$1.5 billion were concluded between Sudan and China. The projects comprised the building of the Al-Fulah 405 MW power station at a cost of US$680 million, construction of the Dongola-Halfa pipeline at a cost of US$120 million and building the DibaybatMalakal road at a cost of US$100 million. As of 2011, China was the biggest trade partner, importing oil from Sudan while exporting low cost items as well as armaments to Sudan (Wikipedia, 2019).

107.9 Conclusion The paper looked at the China-Africa economic partnerships that have existed for many decades now. China continues to engage many African countries on many economic development projects based on mutual understanding that has brought

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social and economic benefits to the communities in Africa. The China- Africa Consultative Forum (CACF) targeted debt relief to African countries that had borrowed a lot from various sources. Participation in peace-keeping operations in places of conflict intended to bring peace in the region. In addition, cheap loans and sometimes free loans linked to infrastructure development were quite useful to ease the economic burden that African countries faced. Furthermore, the Cairo Meeting initiative on China-Africa agricultural cooperation and food security produced more water for irrigation and electricity that increased food production in these countries. The infrastructure construction has engaged many projects that have seen new roads, airports and ports constructed and many communication facilities rehabilitated. The China-Africa Business Council that looked at the global financial crisis on China-Africa commercial relations yielded more Chinese-Africa trade and more foreign direct investment in Sub-Saharan Africa. Examples provided in this paper on the China-Africa cooperation indicate big investments that show benefits in the African community social and economic developments. It is recommended that more strategic approaches should be put in place by African leaders to make the best use of China-Africa partnerships.

References Altorfer-Ong, A. (2009). “Tanzanian ‘Freedom’ and Chinese ‘Friendship’ in 1965: laying the tracks for the TanZam rail link” (PDF). LSE Ideas. London School of Economics (LSE): 655–670. AidData (2018). Chinese-infrastructure-investments. https://www.aiddata.org. Retrieved on 07.10.2019. Bami, Y. (2013). “Mambilla Plateau & Tourism in Nigeria.” Paper at the Commissioning of the Mambilla National Museum, Bommi (Gembu), 5 May 2013. BRIDGES AFRICA (2018). Reflections on China-Africa Economic Relations at a Time of Transition, 7–5. https://[email protected]. Retrieved on 07.10.2018. Chen, C. & Orr R.J.(2009). “Chinese Contractors in Africa: Home Government Support, Coordination Mechanisms, and Market Entry Strategies.” Journal of Construction Engineering and Management, 135 (11), 1201–1210. FOCAC (2019). Forum on China-Africa cooperation. https://www.focac.org/. retrieved on the 9th October 2019. FOCAC (2006). Addis Ababa Action Plan 2004–2006. https://www.fmprc.gov.cn/zflt/eng/zyzl/ hywj/t157710.htm. Retrieved on the 11th October 2019. FOCAC (2008): Milestone in Chinese-African relations. https://www.egypttoday.com/Article/2/ 57011/FOCAC-milestone-in-Chinese-African-relations. Retrieved on th October 2019. Global Times (2018). China-Nigeria economic relations. Retrieved on 11.10.2019. http://www.glo baltimes.cn/content/1126084.shtml. Hall, R. S. & Peyman, H. (1976). The Great Uhuru Railway: China’s Showpiece in Africa. Gollancz. ISBN 057502089X. ICTSD (2018). Crossing Rivers, Feeling Stones: The Rise of Chinese Infrastructure Finance in Africa. http://www.ictsd.org/bridges-news/bridges-africa/news/crossing-rivers-fee ling-stones-the-rise-of-chinese-infrastructure. Retrieved on 05.10.2019. IDE-JETRO, (2019). China-Africa Consultative Forum. https://www.ide.go.jp/English/Data/Io. html. Retrieved on 9th October 2019.

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Monson, J. (2009). Africa’s Freedom Railway: How a Chinese Development Project Changed Lives and Livelihoods in Tanzania. Indiana University Press. Peter S. (2011). China, hip-hop and the new Sudan. https://en.wikipedia.org/wiki/China-Sudan_rel ations. Retrieved on 09.03. 2011. Taylor, I. (2007). “Sino-Nigerian Relations: FTZs, Textiles and Oil”. China Brief—Jamestown Foundation. 7 (11). Retrieved on 10.10.2019. Udeala, S.O. (2010). “Nigeria-China Economic Relations Under the South–South Cooperation.” African Journal of International Affairs, 13(1–3), 61-88. UNAIDS (2018). The China-Africa Business. https://www.unaids.org/en/resources/pressc entre/featurestories/2018/september/leaders-from-china-and-africa-come-together. Retrieve on 10.10.2019 Wikipedia (2019). China-Sudan Economic Relations. https://en.wikipedia.org/wiki/China-Sudan_ relations. Retrieved 09.10.2019. Wikipedia (2016). Angola-China Relations. https://en.wikipedia.org/wiki/Angola-China_relati ons#Chinese_Development_Finance_to_Angola. Retrieved on 08.10.2019. Wolfe, A. W. (1970). “Tanzania-Zambia Railway: Escape Route from Neocolonial Control?” Non aligned Third World Annual. St. Louis: Books International of D.H.-T.E. International, 92-103.

Chapter 108

China’s Contribution to Technological Human Capital Development in Tanzania Through Scholarship and Training Awards Hezron R. Makundi

108.1 Introduction During the past three decades, China has acquired a leading role as a provider of scholarship awards and a study-abroad destination for Africans, at a competing threshold with the leading actors such as Japan, India, UK, US and Germany (King, 2014). According to the Institute for Statistics at UNESCO, the number of African students in China grew by 26 times, from just under 2000 in 2003 to almost 50,000 in 2015 (Breeze & Moore, 2017). As a result, China became the second most popular destination for African students abroad after France and ahead of the US and UK (Breeze & Moore, 2017). This trend is partly accelerated by the Chinese government’s human resource and education capacity building programs such as the African talents programme which targets the continent (Li, 2005). Scholarship awards are broadly embedded into the Sino-African development cooperation portfolio, notwithstanding the absence of an explicit Chinese government policy on training and educational assistance (King, 2014). The Chinese government has steadily expanded training and education opportunities in Africa since the 2006’s Forum on China-Africa Cooperation (FOCAC) (King, 2010). Over 10,000 mid to high-ranking African officials have been invited to China annually to attend short seminars and academic training programs (Tugendhat & Alemu, 2016; Wenping, 2006). According to King (2014), China allocated over 90,000 training slots for African personnel between 2009 and 2015. The official position of Chinese government on training and educational assistance emphasizes that “better education is the basis of, and holds the key to, social stability and economic development,” as stated in the FOCAC resolution.

H. R. Makundi (B) University of Dar es Salaam, Dar es Salaam, Tanzania e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_108

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China’s scholarship and training programmes date back to the 1960s, although their visibility is rather recent and came to the fore particularly after the rolledout plans and milestones of the FOCAC (Nordtveit, 2011; Varghese, 2008). Apart from a few early studies like the literature on this topic is largely recent. The earlier literature was more focused on the philosophical and contextual background to the Chinese human resource development assistance to Africa (see Ferdjani, 2012; He, 2006; King, 2010, 2013; Nordtveit, 2011; Shao, 2012; Yu, Shelton, & April, 2014). The more recent research efforts on the Chinese scholarships have been broadened to include the assessment of socio-cultural life and experiences of African trainees in China (Dong & Chapman, 2008; King, 2010). The account of broader impacts of Chinese scholarship programmes towards individual trainees and their home countries, however, is yet to capture the notable attention of scholars (Yuan, 2013). This article explores the extent to which Chinese scholarships have contributed to the building of technological capacity in Tanzania, during the ten-year period from 2005 to 2015. It seeks to understand the position of the Chinese have the scholarship and training awards to the Sino-Tanzanian development of cooperation and draw some lessons on the impact of such awards on individual trainees. The study will also explore the contributions of Chinese training and scholarships towards the human capacity building efforts in science, technology, and innovation in Tanzania.

108.2 Chinese Scholarships and Sino-Tanzanian Partnership On one hand, scholarship schemes are criticized for stimulating emigration and a brain drain as trainees remain in the advanced host economies (Tremblay, 2005) sustained economic growth in most Organization for Economic Cooperation and Development (OECD) countries. Training services in advanced economies tend to be relatively more expensive than within the recipient side. Moreover, under such modalities, scholarship funds are exclusively spent within the donor side (Banya & Elu, 2001; UNESCO, 2015). On the other hand, these opportunities are prone to corruption, elite capture, and unfair distribution. Nevertheless, as China and other donor countries expand their international training and scholarship programs (Cuthbert, Smith, & Boey, 2008; King, 2013; Woodfield, 2009), the role of scholarships in upgrading the level of human capacity in developing economies is worth acknowledging (Lancrin, 2004; Perna et al., 2014). Statistics show that during the year 2010 alone over US$3.1 billion was spent on training and scholarship awards which accounted for about a quarter of the overall human resource development assistance from developed countries (UNESCO, 2012, 2015). International scholarship schemes contribute to the diversification of knowledge, and exposure of the trainees to international networks and alliances (Cuthbert et al., 2008; M. Li & Bray, 2007; Woodfield, 2009). The training programmes at postgraduate level are often embedded with joint

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research undertakings, from which new innovations can be derived (Altbach and Knight, 2007; Jöns, 2009). Chinese academics have studied the scholarship programs targeting foreign citizens, including those from Africa and the Eastern and Central Asia states (Wang & Wu, 2014; Wu, 2009). While assessing the internationalization of the Chinese education system, scholars have commended their government scholarship programs as a tool for promoting China’s international diplomacy (Chu, 2012; B. Li, 2005; Teng et.al 2016). The literature has also covered the socio-cultural integration among the scholarship beneficiaries and self-funded international students in China (Ye & Sun, 2014; Yang, 2009). Chinese researchers are generally positive of their government’s scholarship awards to Africans and official exchange programs particularly for their contribution in cultivating mutual relations, preparing Africa’s future leaders (Xin, 2008). To balance the mutual understanding and knowledge exchange, scholar emphasize that Chinese institutions must engage more with their alumni in Africa, improve the mobility of Chinese students into Africa and invite African scholars to offer lectures in China in the future (Zeng, 2008). Education and culture are among the early sectors of partnership between China and Tanzania, as it points back to 1962 when the two countries signed a bilateral agreement on cultural cooperation (Moshi & Mtui, 2008; Shangwe, 2017). Along the Chinese scholarship and seminar awards the bilateral partnership has also covered; the construction of infrastructure for education, the dispatch of Chinese teachers to Tanzania, the promotion of inter-university collaborations, and more recently the establishment of the Confucius Institutes (CI) (Tarrósy & Vörös, 2016; Yuan, 2011). By 2016, Tanzania had three CIs, located at the University of Dar es Salaam, University of Dodoma, and the State University of Zanzibar. During the academic year 2016/2017 5236 students were enrolled to the Chinese language courses at the CIs and three other higher learning institutions in Dar es Salaam, Morogoro, Kilimanjaro and Dodoma regions (Kazoka, 2016). In February 2016, a project worth 3.23 million U.S. dollars was launched for the construction of two ultra-modern primary schools along the CIs in Dodoma and Dar es Salaam (Xinhuanet, 2016). The schools preceded Msoga primary which was launched earlier in 2011 as part of the FOCAC’s SinoAfrica Friendship Primary Schools Project (Brautigam & Tang, 2012). Moreover, in 2018, President John Magufuli launched a modern library for the university of Dar es Salaam worth US$40 Million (Xinhuanet, 2016). This library is among the largest in Africa, capable of accommodating 6000 people and with a collection of 800,000 books (Abrams, 2016).

108.3 Research Methodology About 1400 Tanzanians attended various training courses in China for the year 2014 alone, including scholarship recipients and self-funded candidates. Scholarships are offered by different Chinese government agencies including ministries of commerce

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and education, public universities, provincial governments, and state-owned enterprises (King, 2013). Activities related to the administration and coordination of the Chinese government scholarships for international students are officially coordinated by the China Scholarship Council (CSC). The Tanzanian President’s Office Public Service Management (POPSM) also known as UTUMISHI recommended 140, 146, and 177 Tanzanian civil servants to attend seminars in China for the years 2009, 2010, and 2011 respectively (UTUMISHI URT, 2012). For the postgraduate (Masters/Ph.D.) training, an average of 120 awards are offered to Tanzanians annually. A database of 156 beneficiaries of Chinese seminars and 30 registered members of the China Alumni Association in Tanzania provided a base for a snowball sampling methods to reach out Tanzanian alumni respondents. From a target of 100 respondents 85 were surveyed for this study in Dar es Salaam and Morogoro Tanzania between 2014 and 2015. The survey investigated the main features of individual trainees, their learning experiences in China, and overall perceptions regarding the Chinese training. The descriptive features of the two schemes, and the role of official negotiations and coordination in improving the human capital for innovation in Tanzania are also examined. The survey data were primarily collected through a questionnaire and some follow-up interviews, while the information for the overall case study assessment benefited from the in-depth interviews administered to selected key informants. A semi-structured questionnaire was developed to capture the trainees’ views on technology acquisition and other benefits derived from the training courses in China. This was designed with the help of theoretical frameworks and the literature on technological capacity building (Agmon & Glinow, 1991; Debackere & Veugelers, 2005; Kim, 1999) and training tracer studies (Kaufman, Keller, & Watkins, 1996; Kirkpatrick, 1975; Perna et al., 2014). Most of the questions are closed-ended in a 1–5 scaled system which ranks the various aspects of the Chinese training experiences. In- depth interviews targeted the key informants who were considered to have more insights, experiences or at least interests in the management of the two case study training programmes. These interviews were also administered to a few respondents of the survey, who demonstrated some interesting answers through preliminary analyses. The key informants were solicited according to their representation of key coordinating agencies from both Tanzanian and Chinese governments. In total 13 individuals and 10 survey respondents were reached out to for in-depth interviews. An intent to survey a representative sample of Tanzanians who received Chinese scholarships between 2004 and 2014 was confronted by the failure to establish the actual population of trainees, given the lack of comprehensive databases within Tanzania. The respondent official at the Chinese embassy stressed that a comprehensive database could only be retrieved from the Scholarship Council of China in Beijing.

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108.4 Results and Discussions The study found that 62% of the survey respondents had attended academic training programmes in China lasting for a minimum of one year, while the remaining 38% attended short training courses. The academic trainees are further divided into 45% who obtained a bachelor’s degree, while 38% received master’s degree training and 17% had training at Ph.D. level in China. By the year of 2013 bilateral scholarship programme included Bachelor’s, Master’s, and Ph.D. when the focus shifted to postgraduate training only. The senior MVET official indicated that, the decision to exclude the undergraduate training was influenced by a trend of poor performances and a high number of drop-outs amongst the young trainees of this level. In terms of gender, there were 73% male respondents as opposed to just 27% females. This gender imbalance is reflective of the existing challenges in Tanzanian society, which has a gender based skills gap in STEM related fields (see, e.g., Lihamba, Mwaipopo and Shule, 2006; Onsongo, 2009; Sanga, Magesa, Chingonikaya, and Kayunze, 2013). A general conclusion from trainees’ perspectives on the training received in China depicts a positive rating for most of the training courses in the areas of performance and overall quality. A high response rate was observed when we asked to compare the training courses in China with similar offerings by Tanzanian universities and training institutions. The Chinese programmes were rated as superior and advantageous. On the other hand, the response rate to the survey question that compares Chinese and Western training was only 50%. The non-responses could be reflecting a lack of experience with Western scholarship opportunities, although some interviewees refrained from making this comparison without mentioning their reasons, or by indicating that the question was rather political. Generally, a large proportion of those who responded to this question favored the Chinese training over the Western options. Among the most frequent keywords that were used to describe some relative advantages of the Chinese training include “practical”, “relevant”, “modern,” and “solidarity”. Most of the respondents (99%) acknowledged a positive shift in their perception of China and the Chinese people after completing the training course in China. Moreover, the majority of the respondents recommended the up-scaling of the scholarship and training programme by the Chinese government for Tanzanians through an increased number of awards per annum. Similarly, the positive rating prevailed in the open-ended questions, where at least seven respondents made positive remarks. Statements such as “China is a home for the best education system” and “We have a lot to learn from the Chinese” are illustrative. The least scoring performance indicators include the stipend and overall financial packages offered to the trainees. Concerns about the lack of arrangements to reimburse personal costs incurred during the visa application and also local travel costs were raised by a large proportion of respondents. The issue of financial support seems to have been more severe on the Tanzanian government side than on the Chinese side. Moreover, the conditions and institutional capabilities of the domestic organization

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Fig. 108.1 Trainees’ rating on selected training aspects (N = 85). Source Survey data, 2015

to facilitate the implementation of knowledge gained in China were also low-rated; respondents especially from the academic training indicated that their organizations in Tanzania failed to purchase the equipment, reagents, and other resources that are needed in order to practice the skills they have acquired in China. As Fig. 108.1 indicate, the level of competence among the Chinese instructors was highly rated. Aside the minor shortcomings in the curricular design, the majority of the interviewed seminar attendees were highly impressed by the exposure to practical learning and observations. This include the sightseeing activities from which China’s transformations through modernization, infrastructural advancements and investments in science and technology were demonstrated. Five seminar attendees commended the platform for exchange and experience sharing with fellow trainees from Kenya, Malawi, Zambia, Uganda, and Ethiopia.

108.5 The Benefits of Attending Training Courses in China Two sets of indicators are used to assess the benefits acquired from training in China: first, the knowledge outputs generated in relation to the training attendance in China, and secondly the impacts of training attendance in terms of career development, changes in working capabilities and influence of the trainees within their employer organizations. On the outputs, the survey respondents picked out what was relevant to them from the listed indicators of technology and knowledge gains. The most frequent items were found to include. Hard copy and electronic literature materials and physical equipment purchased in China which is imported to the home country after attending the training (these are clustered as knowledge resources). A further disaggregation of items listed under “knowledge resources” revealed a distribution of 87% for literature materials including books, journal articles and technical documentations on STEM and 13% physical equipment. The relatively higher acquisition of publications and other literature materials demonstrates the limited access

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Fig. 108.2 Knowledge output resulting from attending the training in China (N = 85). Source Survey data, 2015

to such resources, especially among Africa’s research and academic institutions, as Ondari-Okemwa (2007) pointed out. Trainees’ tendency to import physical equipment illustrates the booming SinoTanzanian trade. Trainees with senior positions in the government tend to have higher purchasing power that allows them to import different machinery of interests that they find in China. The question on technological upgrades in equipment was not always tied to respondents’ professional practices; this was confirmed by four interviews. Such equipment is purchased privately to facilitate entrepreneurship through small family-owned businesses. In one example, a medical trainee reported to have purchased a poultry hatchery machinery which enabled him to establish a small poultry business. Apart from the hardware equipment, trainees indicated that the training enabled them to engage in knowledge production and maintain scientific collaboration with Chinese partners. It is worth noting that, the evidence on the reported outputs such as academic publications and registration of patents, even among the research trainees was rather limited (Fig. 108.2). In terms of career development, 53% of all respondents indicated that they received promotions to higher positions following the completion of the training courses in China while 47% maintained their old positions. Long term academic training tends to be associated with increased opportunities for job promotions. But in addition to promotions, higher levels of intrinsic motivation triumphed among respondents. The rating for a statement related to the influence of training attendance in China over the improved work attitudes and higher motivation scored the mean of 4.3. On the question about satisfaction demonstrated by workplace superiors, colleagues and members of their surrounding communities, respondents indicated a highly positive post-training performance at 4.2/5. This of course is only a representation of the respondents’ perceptions as it lacks evidence of causal results of the training. The lowest score in relation to the post-training performance was recorded on the working facilities and tools within the home institution, with an average score of 3.6/5. To

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some extent this rating underscores the issue of technological gaps and relevance of the advanced Chinese knowledge which is further assessed in the following section.

108.6 Barriers to Learning and Knowledge Acquisition Through Chinese Training The trainee respondents expressed a mixture of enthusiasm, excitement and to some extent disappointment from their experiences of being in China. The impacts of these perceptions and individual assessments to learning and knowledge acquisition cannot be easily ignored. The main challenges emerging from the survey can be broadly clustered in three groups: the sociocultural divergences between the trainees and their hosts, the technological gap between China and Tanzania, and the shortcomings pointed out in relation to the administration of some training courses. The language barrier came out as the leading source of frustration among the majority of the surveyed trainees. The survey records show that 67% of respondents were trained in English, 19% in the Chinese language with English translations and the remaining 14% attended the courses in the Chinese language medium. The Chinese based instruction is exclusive to the long-term academic programmes where candidates undertake a minimum of 6 months to learn the Chinese language. Language barriers were acknowledged by 70% of the respondents in various ways, including classroom communication, socio-cultural interactions, and also for the acquisition of basic services in the streets. Trainees for the English programmes were also concerned about the English proficiency (including pronunciation) of their instructors. Concerns were also directed at the lack of provision of sufficient nonteaching staffs including librarians and technicians who are fluent in English. Apart from the problem of human interactions, the academic trainees complained about the imbalanced access to English language literature and other learning resources in comparison with what was made available in Chinese. While the earlier Chinese literature in Sect. 2.2 emphasized on English as a medium for the clinical training, the challenge in this field seems to extend beyond instruction as the following case of a Tanzanian medical student illustrates. Practicing is at the heart of our field. As a medical student I had to practice in the teaching hospital’s ward. But I was always frustrated by the fact that most of the patients could not speak English which was a primary language for my Master’s in Medicine programme; it was almost impossible to take the patients’ history (Huazhong MMED graduate, Interview by researcher, Dar es Salaam, April 2015).

The non-language socio-cultural adaptation difficulties including the food, the worshipping environment, and racial perceptions were mentioned at least 18 times in the survey. This resulted in homesickness, feelings of isolation, and loneliness among the long-term trainees. Interviewed alumni association (CAAT) leader estimates that on an annual basis between 5 and 8% of the academic trainees particularly at undergraduate level fail to complete their studies in China. Among the reported reasons

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for the candidate’s failure to graduate include difficulties of coping with the socialcultural gaps. Also, students face the pressure to balance their studies with economic activities, particularly the opportunity to tap into the booming trade between China and Tanzania. Some candidates are reportedly abandoning their studies and migrate to the multicultural coastal cities especially Guangzhou and Hong Kong, where they work as trade liaisons and translators for Swahili speakers. The expressions of enthusiasm and approval of China’s advanced technological capabilities prevailed in the survey responses as well as in-depth interviews. Credits were not only directed at the training facilities and the general infrastructural capabilities and achievements of China but also the training contents. Nevertheless, such positive remarks need to be treated with caveats, given the associated complaints on the relevance and applicability of the advanced knowledge on respondents’ working environments. At least ten respondents offered some remarks that suggested the reluctance or inability of their organizations in Tanzania to undertake investments relating to technologies they had learned in China. The existing technological gaps between China and Tanzania limit the relevance and impact of the Chinese training especially in the case of the short seminars. The joint efforts to develop the curricula for the assistance training that addresses the needs of the recipients is recommended in order to complement the existing collaboration between the Chinese and Tanzanian governments in the selection of candidates.

108.7 Conclusion Based on the findings of this study it is concluded that Tanzanian awardees offered a highly positive rating of the Chinese training and scholarship awards, notwithstanding the acknowledged challenges. Similarly, the Tanzanian government officials and other researched stakeholders were especially pleased with the country’s role in the coordination process. This includes the positive remarks regarding Tanzania’s bargain in the scholarship awarding process and the response of the Chinese government to the emerging requests for the special awards. The study has also found the higher achievements of the scholarship programmes’ role of instilling sentiments of friendship and appreciation of China among Tanzanian government officials. The conclusion of this study confirms Yuan’s (2011, 2013) findings that scholarships are largely exploited in cultivating the Sino-Tanzanian political and diplomatic relations. Another important finding of this study which is also presented in the literature is the rapid growth of Chinese scholarship awards along other forms of assistance to the Tanzanian education and training sector, including infrastructural development. Apart from the transfer of knowledge embodied in the literature material and procurement of advanced hardware, the transfer and application of advanced skills, for example through publishing and patenting is relatively weaker, even for the long term training. The acquisition of such skills is found to be highly vulnerable to the hindrances due to cultural barriers and the existing technological gaps between China and Tanzania. The findings reveal that personal challenges facing Tanzania trainees

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in China include language and other cultural differences. Such barriers are also cited in similar studies, particularly Yuan (2011, 2013), Bodomo (2014), and King (2013). The findings demonstrate a need for China to improve its understanding of the main features of the Tanzania and African innovation systems at large, in order to adapt and improve their training services. The learning process could be facilitated for example through a more elaborate joint research programme (see also King 2013). Another important adaptation of the Chinese short seminar awards to local demands could be achieved through increasing involvement with the private sector in Tanzania, given its importance to economic development. An earlier study reported the untapped potential of improved exploitation of the PPP arrangements with Chinese multinationals for skills transfer to Tanzanians (Makundi, Develtere, & Huyse, 2016). The study indicated that the three researched Chinese ICT multinationals have contributed well in hiring and training Tanzanians. But the linkage between these firm-level efforts, their embedded bilateral cooperation schemes, and the overall Chinese assistance in education and training remains weak. Improvements in the coordination of this category becomes necessary under the booming bilateral economic engagements in which the private sector plays a major role (Makundi et al., 2016).

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Chapter 109

Chinese Investment in the Arab Region: Building Bilateral Cooperation and Common Development Linda Matar

109.1 Introduction As part of its strategy to strengthen economic partnerships with countries along the Belt and Road Initiative (BRI), China reached out to Arab countries and announced its plans to invest in their infrastructure and economic sectors. Historically, China-Arab trade relations have been tied to oil. The Arab countries supply nearly 40 percent of China’s oil imports (CGTN, 2018). However, as of late, cooperation between China and many Arab countries has expanded beyond the petroleum sector to include the establishment of joint projects in the infrastructure, industrial, logistics, agricultural, telecommunication, and transportation sectors. The Arab countries are natural partners of the BRI since they are located at important nodes along both the Silk Economic Belt and the 21st C. Maritime Silk Road. While in 2008, the region received less than 1 percent of China’s net outbound foreign direct investment (FDI), in 2018, China pledged $23 bn in loans and aid to Arab states and signed investment deals worth of $28 bn (The Economist, 2019). Chinese money is everywhere in the Arab region: ports in Oman, factories in Algeria, telecommunication in Syria, industrial zones in the UAE and Saudi Arabia, and skyscrapers in Egypt’s new capital. In this paper, I focus on Chinese BRI-investments in two Arab countries: Oman and Syria. In the case of Oman, a stable economy in the Arab Gulf region, I specifically look into Chinese investment in one of Oman’s ports, Duqm. I argue that Chinese investment can be engaged in Oman to ensure positive spill-over impact to the economy in terms of diversification, increased non-oil exports, and the preservation of the local content. In the case of Syria, a conflict economy, I focus on how China can play a role in Syria’s reconstruction and rehabilitation after 10 years of warinduced destruction and Western-imposed sanctions. As demonstrated from these two L. Matar (B) School of International Studies, Sun Yat-Sen University, Guangzhou, China e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_109

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case studies, Chinese involvement in these Arab countries has been constructive and conducive to building productive capacity and the betterment of social conditions attendant thereupon. With regard to my data sources, because BRI project information is not centrally reported, I relied on secondary sources, such as the CSIS Reconnecting Asia database,1 to gather data on Chinese outward investment in Oman. As for Syria, I have relied mainly on my previous publications on the issue and on academic articles and media reports in both English and Chinese.

109.2 Chinese Investment in Oman In 2015, Oman and China signed a Bilateral Investment Treaty (BIT) to promote investment between the two countries. The pace of Chinese investment flows into Oman has accelerated starting in 2016, following China’s more concrete moves towards putting in place bilateral economic relations with developing states as part of its ambitious Belt and Road Initiative. Chinese investment in Oman has targeted infrastructure, telecommunication, transport, and industrial sectors. International organizations like the Economist Intelligence Unit expect Oman will endorse more such investments in the future (EIU, 2018). There is no doubt that increased infrastructural investment can raise the economy’s productive capacity in the short-tomedium term. Chinese investment in Oman is coherent with Oman’s national plans and can produce economic spillover if it ensures the promotion of knowledge-based industries and human capital development. Meanwhile, Oman’s debts must remain serviceable. Oman can engage more of its own resources in financing and operating these endeavors to ward off excessive reliance on Chinese loans and preserve a sustainable level of sovereign debt. According to the Reconnecting Asia database, the total reporting costs of Chinese investment in the Sultanate of Oman, amounted to $880 million during the period 2016–2018 (CSIS Reconnecting Asia, 2018). These ventures involve constructing a new railway, developing Duqm seaport, and setting up a broadband network in Oman. Oman’s political stability and open society have made it an attractive regional investment hub. Chinese investors have been keen to invest in Oman because it provides access to GCC markets and to trade routes on the East African coast and the Indian Ocean. They have been particularly interested in investing in Oman’s logistics sector, mainly its ports. The roads, rail and pipeline connections from the Omani ports (Salalah, Sohar and Duqm) to ports inside the Persian Gulf, from Dubai to Kuwait, appeal to investors who want to be close to Gulf energy resources. Additionally, almost two thirds of Chinese exports to Europe, the Middle East and Africa move through Emirati ports (The Economist, 2019) and this explains why China is keen on establishing a logistics and trans-shipment base in Duqm. 1

Center for Strategic & International Studies (CSIS) Reconnecting Asia Database, available at https://www.reconnectingasia.csis.org/map/.

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Initially a fishing village, the town of Duqm is located on the Arabian coast in southeastern Oman. It is considered a strategic node along the Maritime Silk Road, standing at the crossroads between Asia and Africa. The Duqm port is part of Duqm’s Special Economic Zone (SEZ), which Oman established in 2011, aiming at diversifying the economy. Oman has invited Chinese investors to Duqm’s SEZ. In 2016, the two countries signed a $10.7 billion deal to build an industrial park in Duqm’s SEZ (Reuters, 2017). Chinese construction and infrastructural projects in Duqm can transform the port into an industrial and trans-shipment port. Duqm can function as an operating base for Chinese small and medium enterprises (SMEs). It can also serve as a tranx-shipment hub for China’s consumer goods which target the Gulf countries, the Greater Middle East, the markets in East Africa, and the Indian subcontinent. Currently, Salalah port in southwest Oman handles all trans-shipment. However, local experts believe that there will be sufficient commercial sea traffic across the East African and Indian Ocean trade routes to make Duqm’s services viable as well. Oman provides an important passageway to the Horn of Africa. This facilitates China’s commercial entry to the growing consumer markets in East Africa, such as Kenya, Somalia, and Tanzania. Chinese SMEs can cater the light and medium industries to East African markets and benefit from the reduced tariff rates of the Common Market for Eastern and Southern Africa (COMESA) and the East African Community (EAC). East Africa is also desperate for light machinery, automobile parts, and many Chinese consumer goods. From a geo-economic perspective, China can capitalize on the following. • Oman’s geographic positioning outside the Persian Gulf can pave the way for safe maritime trading for Chinese ships that do not need to be diverted to the volatile Gulf region. Regional tension can be exemplified by the Qatar diplomatic crisis of June 2017. • In Duqm’s case, Chinese investors are interested in its strategic location. As explained earlier, Duqm enjoys geographic proximity to maritime trade routes, and this enables it to act as trans-shipment hub for Chinese consumer goods. • In view of the proximity of Duqm Port to Saudi Arabia’s oil fields, such as those at Shaybah located near Oman’s border, Chinese investment can be close to Saudi’s oil resources (Lobe Log, 2018). • China can partner Duqm with its other maritime infrastructural investments in Gwadar port in Pakistan and Djibouti port in the Eastern horn of Africa, increasing its regional stake across the Indian ocean. • China also has interest in setting up a foothold in East Africa. It has planned to establish an industrial park and invest $10 bn in Bagamoyo port in Tanzania (Construction Review Online, 2017). • The Sultanate also overlooks the Strait of Hormuz, the transit point for the Gulf’s energy. It is a major trade route that connects the Middle East, India, Africa, and Europe. The US Energy Information Administration (EIA) estimates that the highest global volume of crude oil and petroleum products passes through the Strait (18.5 million b/d, as compared to 16 million b/d that passed through

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the Strait of Malacca in in 2016). This signifies the importance of the Strait as a strategic chokepoint in global energy security (EIA, 2017). It is well-known that Iran plays a crucial geopolitical role in this critical chokepoint. Whenever political tension between Iran and the US escalates, Iran threatens to close the Strait. The US also alludes to unleashing armed conflict in or near the Strait. Amid this persistent tension, China may opt to capitalize on its presence in Oman and obtain more regional balance by emplacing a military footprint along the Arabian Sea. • Recent analyses explain China might be keen on complementing its commercial footprint in Oman with a military footprint to bolster its strong commercial and military interests in Pakistan’s Gwadar and its military support base in Djibouti (Lobe Log, 2018). China might aim at fulfilling its strategic ambition which is to “balance” the US military presence across the Indian ocean. Whether this will materialize remains thus far unknown.

109.3 China’s Role in Reconstruction in Conflict Syria The following section in an excerpt from a chapter which I co-published in 2019.2 When writing the chapter, my co-author and I did not rely only on Western analysis, but also tapped into Chinese resources. Our colleagues who are knowledgeable in Mandarin helped us access Chinese publications which enabled us to capture China’s perspective on Syria’s reconstruction. The Syrian crisis started in 2011 following the outbreak of political protests in other Arab countries. The stubborn contradictions of the external players that have intervened in the Syrian war since 2011 have added to the crisis’s complexity. Syria now is a war-torn and splintered society. The recent development in the field have shifted the balance of power in favor of the al- Asad government and its allies, Russia, Iran, and a politically supportive China in the background.3 In 2021, China committed to a four-point proposal that aims at solving the Syrian conflict. The emphasis is on the following areas: large scale reconstruction projects, removal of sanctions, galvanizing internal productive capacity, with an accent on agriculture, and the reinvigoration of Syria’s sovereignty (Ehret, 2021). Contrary to the Western-influenced mainstream narrative, my co-author and I argued that reconstruction efforts should bolster the Syrian state’s resilience capacity (Matar and Kadri 2019). The point of reconstruction, whether now or at the conflict’s

2

Refer to Matar, L., and Kadri, A., “China’s Role in Syria’s National Security” in Matar, L. and Kadri A. (eds). Syria: from National Independence to Proxy War, Palgrave Macmillan, 2019. 3 As a strong supporter of Syria’s sovereignty and territorial integrity, China has politically supported Syria during the course of the conflict. It has intervened several times in the United Nations Security Council in favour of Syria. Alongside Russia, it blocked bids by Western powers that condemned the Syrian government over the alleged use of chemical weapons and vetoed other resolutions that could have opened avenues for a military intervention in Syria.

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end, is to enable the state to restore its legitimate sovereignty over the country’s territory. Bolstering state consolidation and centralized rule are crucial prerequisites for reinstating national security and mitigating external interventions in Syria’s internal affairs (Matar 2019). Interestingly enough, some Chinese authors share our viewpoint. They argue that Syrian reconstruction involves not only economic but also security reconstruction (Li, 2018). In this regard, China can play a crucial role. Syria’s allies, Russia and Iran, are financially constrained and cannot shoulder the weighty reconstruction bill. But the excess productive capacity and financial wherewithal of China allows it to play a key role in this endeavor even amid Syria’s strife. Chinese investment in politically unstable African countries, such as Kenya and Tanzania, signifies that China will not shy away from investing in risky economies, especially when it invests for political as well as long-term economic benefits. In this regard, China can play a constructive role in Syria’s reconstruction and get the economy and society back in shape. Its intervention in Syria’s economic and physical refurbishment can play a crucial role in bolstering Syria’s autonomy and territorial integration. In turn, China can move its industries and enterprises to Syria, releasing part of its overcapacity while creating new markets for its consumption goods in Syria and other neighboring Middle Eastern countries (Li, 2018). Since the outbreak of the crisis, China has supported Syria by providing humanitarian aid and pledges for potential investment and reconstruction projects. According to Chinese state media, China gave 1000 tons of rice to Syrian citizens as part of its BRI’s humanitarian plan (CGTN, 2017). In the first half of 2017, China and Syria signed three agreements worth more than $40 million to aid the internally displaced and the returning refugees in need of water, food, shelter, and medical services (Gao, 2017). Additionally, the Chinese government gave $1 mn to the International Red Cross Society in May 2017 to help internally displaced Syrians (Xinhua, 2017). From a business perspective, the Chinese company Pacific Century CyberWorks (PCCW) was contracted in 2014 in the telecoms sector to improve the landline connectivity in the Governorate of Hasakeh. PCCW has been active in Syria since 2012 as it was the main provider of internet traffic in Syria. In 2015, Huawei, one of China’s largest telecommunication equipment makers, inked an agreement to counsel the Syrian government on the national strategy for the development of Syria’s IT and telecom sector (Daily Beast, 2015). The Huawei deal is not new to Syria. The Chinese company had previously signed a $20 mn arrangement in 2011 to supply equipment to the Syrian telecom sector (The Syria Report, 2011). Additionally, representatives from the Tebian Electric Apparatus (TBEA), a Chinese company that provides renewable energy solutions and power transformers to power plants, met with Syrian officials in 2016. The aim of the meeting was to supply the Aleppo Thermal Plant with gas turbines to enable it to resume production (The Syria Report, 2016). All these deals signal intense Chinese corporate interest in doing business in Syria. From a One Belt One Road (OBOR) perspective, Syria represents an important hub and transit point. Because of its geostrategic position, Syria provides a route to the Mediterranean through which Beijing can transport goods and passengers to Europe. Syria can also play a key role in the transportation corridors in the Levant (the

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Iraq-Iran-Syria corridor) along OBOR’s eventual route (Escobar, 2017). Palmyra, an important stop on the old Silk Road, hosted the caravans of traders that came from the East, carrying silks, spices, and art crafts. Before the conflict, Syria held the Silk Road festival annually to signify the key role that it played in the Silk Road as a Centrepoint between the East and the West (Simmons, 2009). Syria’s relation with China is nearly as old as recorded history. However, at the current stage, the real relevance of Syria to China is its strategic importance. Within this context, China would not hesitate to contribute to Syria’s reconstruction and pave the way for reviving political stability in Syria (Ministry of Foreign Affairs of the People’s Republic of China, 2017b). In various press conferences and interviews, the Chinese Foreign Minister, Mr. Wang Yi, has voiced China’s intentions to defend Syria’s territorial re-integration in order to reinstate the country’s sovereignty (Ministry of Foreign Affairs of the People’s Republic of China, 2017a). After all, from the Chinese viewpoint Syria’s stability may guarantee the successful business operation of OBOR across the Middle East and its outer hinterlands. A series of networking events were held with the express purpose of drawing closer relations and collaborations between Chinese and Syrian investors. The Syria Day Expo, held in July 2017 in Beijing, was a collaborative effort between the ChinaArab Exchange Association and Syrian Embassy. The meeting attracted 1000 representatives from Chinese enterprises who were eager to do business in Syria (SANA, 2017; Belt and Road, 2018). The Chinese business delegations were active in seeking out not only business tenders in areas of reconstruction but also the formulation of bilateral trade deals needed for the successful operation of China’s Belt and Road Initiative. The Syrian and Chinese governments discussed their intention to open up direct air flights in order to promote trade and commercial exchanges between the two countries that will in turn facilitate Chinese companies’ involvement in Syria’s reconstruction (Syria Times, 2017). In July 2017, China also announced its plans to invest $2 bn in an industrial park to attract around 150 Chinese companies to Syria and provide 40,000 employment opportunities (Escobar, 2017). The industrial park can serve as a potential implementation and production centre for China’s BRI in the region. In August 2017, the 59th Damascus International Fair brought together Chinese, Russian, and Iranian businesses. Over thirty Chinese firms, including China Energy Engineering Group and China Construction Fifth Engineering Division Corp. Ltd. visited Syria in 2017. They examined with interest projects in the infrastructure sector and planned to rebuild electricity, energy and communication networks (Bai, 2017; Zhang, 2017b). In early 2018 one of the Chinese multinational manufacturing companies that produces heavy machinery, SANY, also visited Damascus. Representatives from SANY met with Syrian officials to discuss investment opportunities, particularly in areas of manufacturing (The Syria Report, 2018). It follows that China’s accent on industrial investment in Syria may go further than merely infrastructure and oil and can be another building block toward accelerating Syria’s economic revitalization. The Syrian geopolitical environment will remain fragile, presenting challenges to comprehensive restoration efforts (Zhang, 2017a). The commencement of these projects will no doubt face hurdles given the general absence of overall security, a

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weak business environment and financial difficulties. It is for this reason that my co-author and I argued that financial and physical reconstruction in time of war should mainly bolster the state’s resilience against external threats. Moreover, the Western-imposed sanctions, that disrupted the functioning of Syria’s institutions, impede the settling of business deals in either US dollars or the Euro. One way to overcome the latter financial hurdle is for both countries to settle their deals and trade in the Renminbi (RMB), which is under negotiation by both parties. More recently, in 2019, Syria proposed six projects to China consistent with China’s BRI’s objectives of promoting mutual development. It is anticipated that these projects fall into the rubric of the Five Seas construction plan, an ambitious undertaking aimed at connecting the neighboring five seas (the Mediterranean Sea, Persian Gulf, Black Sea, Red Sea and Caspian Sea) with Syria, Iraq, and Iran through railways, energy grids and highways (Ehret, 2021).

109.4 Conclusion To conclude, China extends loans for infrastructural and construction projects with the aim of furthering mutual economic cooperation with developing states. It may be worthwhile to recall that China’s three main points of departure in BRI projectsetting include joint discussion, joint venture, and joint benefit. Its conditions are usually limited to the projects themselves. China usually demands projects in host economies to be carried out using Chinese construction companies, Chinese material, and Chinese human resources. However, Chinese conditions do not go beyond the projects to revamp national plans and development strategies. This is in contrast with the Washington Consensus program that usually requests developing states to restructure their national policy framework. The Bretton Woods institutions (IMF and World Bank) inevitably attach conditions to their loans, including a whole set of policy reforms meant to subjugate the national economy to international financial interests. Drawing upon the experience of various developing states, the “one-size fits all” strategy has often led to ill- fated socioeconomic outcomes. With the rise of China as a sovereign development model, opportunities abound for developing states to theoretically draw upon such experience and design nationally appropriate development strategies. Moreover, developing nations may cultivate the positive historical fallout attendant upon China’s BRI expansion, whose capacity building impetus is a power for peace and prosperity.

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References Bai Tiantian (2017),《叙利亚驻华大使: 中国企业将优先获得参与叙重建的机会 》(Syrian Ambassador to China : China Enterprises will be Given Priority in Syrian Reconstruction Opportunities.) Huanqiu online, 25 September 2017, available at http://world.huanqiu.com/exclusive/ 2017-09/11279054.html (accessed 22 December 2017) Belt and Road (2018),Syria Economic Profile, http://beltandroad.hktdc.com/en/country-profiles/ syria (accessed 22 January 2018). CGTN (2017), China delivers food aid to Syria under the Belt and Road Initiative, 21 November 2017, available at https://news.cgtn.com/ news/3263544d78637a6333566d54/share_p.html (accessed 20 December 2017) CGTN (2018), China and the Arab world; Revitalizing the ancient Silk Road, CGTN News. 7th October 2018. Construction Review Online (2017), Construction of US $10bn Bagamoyo port in good progress. CSIS Reconnecting Asia Database, Center for Strategic & International Studies, available at https:// reconnectingasia.csis.org/map/, (accessed May 2018). Daily Beast (2015), China Looks at Syria, Sees $$$, Daily Beast, 27 October 2015, http://thebea. st/1kKdWNr?source=email&via=desktop (accessed 22 January 2018). Economist Intelligence Unit (EIU) (2018), Oman Country Report. London: EIU. September 2018. Ehret, M. (2021), Assad, Syria, and China’s new Silk Road, The Cradle.co, 7 December 2021 Energy Information Administration (EIA) (2017), World Oil Transit Chokepoints. 25 July 2017. Escobar, P (2017), The New Silk Road will go through Syria, Asia Times, 13 July 2017. Gao, Charlotte (2017), “Why China Wants Syria in its New Belt and Road,” The Diplomat, 30 November 2017, available at https://thediplomat.com/2017/11/ why-china-wants-syria-in-itsnew-belt-and-road/ (Accessed 3 December 2017). Li, Shijun (2018), 《“一带一路”对接叙利亚战后重建 : 时势评估与前景展 望 》 (“The Belt and Road” Initiative and Post-War Reconstruction in Syria: Assessments and Outlooks). Arab World Studies, March 2018. Lobe Log (2018), Oman’s port strategy, Lobe Log, 31 August 2018. Matar, L., and Kadri, A. (2019), “China’s Role in Syria’s National Security” in Matar, L. and Kadri A. (eds),Syria: from National Independence to Proxy War, Palgrave Macmillan. Matar, L. (2019) ‘Syria’s Political Economy and Imperialism’, 2nd edition, in: Ness, I. and Cope, Zak (ed.s) (2019) The Palgrave Encyclopedia of Imperialism and Anti-Imperialism, Palgrave Macmillan Ministry of Foreign Affairs of the People’s Republic of China (2017a), 《王毅就叙利亚局势阐述 中方立场》 (Wang Yi, on China’s Position on Syria.), April 13, 2017, available at http://www. fmprc.gov.cn/web/zyxw/t1453414.shtml (accessed 18 November 2017). Ministry of Foreign Affairs of the People’s Republic of China (2017b) 《, 王毅: 反 恐、对话、重 建是新阶段解决叙利亚问题的三个着力点》(Wang Yi: Anti-terrorism, Dialogue and Reconstruction are the Three Key Foci in Syria’s New Phase.), November 24, 2017b, http://www.fmprc. gov.cn/web/zyxw/t1513697.shtml (accessed 12 December 2017). Reuters (2017), Oman Counts on Chinese billions to Build Desert Boomtown, Reuters, 5 September 2017. SANA (2017), “Syrian Day held in Beijing to Promote Damascus International Fair,” SANA news, 10 July 2017. Simmons, G. (2009), Waypoint on the old Silk Road. The National. October 31, 3009. Syria Times (2017), China’s Participation in Reconstruction in Syria Discussed, The Syria Times, 23 February 2017, http://syriatimes.sy/index.php/ economy/29294-china-s-participationin-reconstruction-in-syria-discussed (accessed 2 December 2017). The Economist (2019), “Middle Kingdom Meets Middle East; China and the Arab World,” The Economist, 20 April 2019. The Syria Report (2011), “STE Contracts Huawei for Cable Network,” The Syria Report, 14 April 2011.

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The Syria Report (2016), “Chinese Company Eying Aleppo Power Plant Contract,” The Syria Report, 27 September 2016. The Syria Report (2018), “Chinese Companies Starting to Look for Opportunities in Syria,” The Syria Report, 30 January 2018. Xinhua (2017),《记中国向叙利亚流离失所者提供人道主义援助》(China’s Provision of Humanitarian aid to Syrian Displaced Persons), Xinhua, 1 November 2017, available at http://www.xin huanet.com/2017-11/01/c_1121886956.htm (accessed 12 January 2018). Zhang Bo (2017a),《中国参与叙利亚重建: 优势与挑战》(Chinese Participation in Syria’s Rebuilding: Advantages and Challenges), The Contemporary World, 22 November 2017. Zhang Jianli (2017b),《中国斥巨资参与叙利亚重建 港媒: 中企迎绝佳机会》 (China has heavily Invested in Syrian Construction. Hong Kong Media: Chinese Enterprises Welcome Good Opportunities.), Sina news, December 21, 2017, available at http://news.sina.com.cn/o/2017-12-21/docifypxrpp3152421.shtml (Accessed 22 December 2017).

Chapter 110

Armenia and China: The New Initiatives for Future Relationships Lilit Sarukhanyan

The Armenian-Chinese relations has a centuries-old history. The Great Silk Road (GSR), the trade road that linked China, Central Asia, and Iran to the capital of Byzantine Empire Constantinople, passed through the territory of the Armenian Highland and played a significant role in the development of not only trade and economy, but it also was a cultural, religious, linguistic, and technological bridge for exchanges and enriched the culture of all participant countries. In 1991 China was among the first countries in the world to officially recognize the independence of the Republic of Armenia. Soon after in January 1992 the “Agreement on the Basics of Trade and Economic Cooperation” signed, which was the first legal framework for the further development of bilateral relations. Nowadays, trade and economic relations are dynamically developing between the two states. Every country chooses its own model for governance and the way of development. And every nation has its own history, traditions, way of thinking, and other factors that influence on the development of that country. The model for development is specific for each country. However, it is important to find the right path for development of human civilization. In the keynote speech at the opening ceremony the World Economy Forum Annual Meeting held in Davos in 2017, President Xi Jinping pointed out that: “Mankind has become a close-knit community of shared future. Countries have extensive converging interests and are mutually depended. Although all countries enjoy the right to development, they should meanwhile view their own interests in a broader context and refrain from pursuing them at the expense of other countries.”1 1 Xi Jinping’s keynote speech, Jointly Shoulder Responsibility of Our Times, Promote Global Growth, at the opening ceremony of the World Economic Forum Annual Meeting 2017, People’s Daily, Page 2, January 20, 2017.

L. Sarukhanyan (B) The Armenian Center for National and International Studies of Armenia, Yerevan, Armenia e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_110

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This year the People’s Republic of China (PRC) marks the 70th anniversary of the founding. Over the past 70 years, China has explored a unique development path and governance model. And China has made remarkable achievements in promoting sustained economic growth, improving people’s livelihood, and promoting all-round social development. On October 1st the Prime Minister of Armenia Nikol Pashinyan has sent a congratulatory message to President Xi Jinping of the People’s Republic of China on the 70th anniversary of PRC’s founding. The congratulatory message specifically said: “This remarkable jubilee symbolizes the great achievements stated in building a modern statehood and society by one of the oldest civilizations, the Chinese nation. It is a pleasure for us, the Armenians, to follow the achievements of the People’s Republic of China and the Chinese people in terms of economic progress, innovation, and cultural growth. Armenia attaches particular importance to the comprehensive, sustained, and consistent strengthening and deepening of the traditional friendly relations with China. The furtherance of multifaceted bilateral relations and exchanges and close cooperation in the international arena stem from the vital interests of our two countries and peoples.”2 The Chinese are a hard-working nation, very organized, and they really have achieved success. In recent years, China has resolutely pushed forward economic globalization, expanded the Belt and the Road international cooperation, and worked for win–win cooperation among all countries. Economic globalization involves cooperation and mutual development of both parties of the agreement. And the more countries who cooperate, the greater the likelihood that they will develop and live in peace. China’s former Minister of Culture Wang Meng once wrote, “Chinese culture has a long and brilliant history and has made great contributions to human civilization, in addition to experiencing all types of difficulties, embarrassments, anxieties, and pain.”3 It is obvious that during centuries Chinese culture and way of thinking remains unchanged as Armenian. China with its centuries-old wisdom and civilization can contribute to the development of such relations around the world.

110.1 The Role of Think Tanks The Armenian Center for National and International Studies (ACNIS) was founded in October 1994 by the First Minister of Foreign Affairs of Armenia Raffi K. Hovannisian, receiving the support of a wide range of adherents from Armenia and the diaspora.

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https://www.primeminister.am/en/congratulatory/item/2019/10/01/Nikol-Pashinyan-Congratul ations/. 3 Wang Meng, The Chinese way of thinking, China International Publishing Group, 2018, Page 338.

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This was the first independent think tank in Armenia of its kind, paving the way for other similar institutions year after year, becoming a unique smithy of political scientists, experts and analysts of new thinking and quality. ACNIS was able to quickly occupy its political niche in the post-Soviet space, acting as a force shaping a geopolitical creative consciousness and contributing to a comprehensive understanding of world events and the international situation. Over the past two and a half decades, the Center has expanded its scope of activity, including regional security and cooperation, prospects for applied research on domestic and foreign policy and an open dialogue with the public. In this regard, the Center’s publishing materials, case studies on key issues, monographs, as well as scientific and practical forums and public discussions were of key importance. Since its inception, ACNIS, in addition to individual expert articles, monographs and special compilations, has been issuing its own quarterly newsletter, “A View from Yerevan,” on the pages of which the problems and challenges of Armenia, Artsakh, and the diaspora, as well as events in the region and international life, are impartially covered. The following years, the life of the Center was marked by socially relevant sociological research and conferences on public, local and international issues. Several dozens of opinion polls were conducted on the most relevant agendas both among the population of the republic and at the expert level, the results of which were regularly analyzed and summarized at seminars and publications in the electronic press. Two years ago, in September 2017, ACNIS switched to a more modern, faster, and more efficient way of disseminating information and analytical products: to electronic format. To replace the previous format came the electronic publication “ACNIS: ReView from Yerevan” with weekly updates. In the light of many years of experience, employees continue to adhere to two of the most important principles of the press: complete freedom of speech and impartiality. The transition to new, advanced forms allows faster and more affordable distribution of printed materials, including a wider range of opinions and a much larger audience. Two years of experience show that the electronic version is able to provide the proper flow, rhythm, thematic mosaic of weekly analysis and commentary on our research activities. It was my pleasure to present the Armenian Center for National and International Studies during the Conference on Dialogue of Asian Civilizations in Beijing, this year on the 15th and 16th of May. The Conference was initiated by the Chinese Academy of Social Sciences (CASS), one of the most famous and influential academic, research institutes not only in China, but also in the world ranking of think tanks. And the main purpose was deepening exchanges and cooperation among think tanks of various countries, establish closer think- tanks partnership. At the end of the conference the Letter of Intent on Establishing Think-Tank Partnerships for Exchanges and Mutual Learning among Asian Civilizations was signed. Recently I came across an interesting book called China’s Values by Han Zhen and Zhang Weiwen where the authors said: “The reason that China takes the road of peaceful development and advocates the construction of a harmonious world lies in China’s profound awareness and pursuit of a community of shared future for

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mankind. Such pursuit, with which more and more countries have come to identify, is essentially based on the recognition that all countries are so interdependent that win–win cooperation and common development can result only from mutual understanding, mutual benefiting, and pulling together in tough times.”4 China’s vision of ‘A Community of Shared Future for Mankind’ is a great project and it will provide the a relationship between our countries and all over the world.

4

Han Zhen and Zhang Weiwen, China’s Values, China Social Sciences Press, 2018, Page 334.

Chapter 111

China-Uganda Affairs in the Ugandan Press Miria Babanga Sidney

111.1 Introduction While addressing the UN general assembly in 2015, the Chinese President Xi Jinping gave currency to the term “a community with a shared future for mankind.” A couple of years later in a report to the 19th National Congress of the Communist Party of China (CPC), he explained those thoughts in more detail. At several other international and regional engagements, the element of partnerships and cooperation have been President Xi’s key message. As the top Chinese diplomat, President Xi has increasingly become the global voice of reason, preaching multilateralism and cooperation between nations, both big and small. We live in a world and times where the natural instinct is to grab and hoard in the name of nationalism. With the global population jumping to eight billion people and resources becoming scarce, large and small powers are at a crossroads today more than ever before, as they look for answers to address both domestic and global challenges. Hence the quality of relations between nations is critical. It will be recalled that formal relations between Uganda and China date back to 1962, when the former attained independence from Britain. China was among the first countries to send a congratulatory message to Uganda. Subsequently, both countries established diplomatic missions in their capitals. The ties between both countries are not just limited to diplomacy, trade, and aid in its various forms, but broad and encompass much more. Fast forward, China in 2018 marked its 40th anniversary of the Reform and Opening up policy, which propelled it to become the global economic power and

M. B. Sidney (B) Vision Group of Uganda, Kampala, Uganda e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_111

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world leader it is today. The New Vision1 published a range of articles related to China in January of this significant year of achievement. The same can be said of January 2019, which coincides with China’s 70th anniversary as the country we know it to be today. The two months will form the basis for our insights into China’s relations with Uganda as projected in the country’s leading English newspaper. According to ABC figures, the New Vision is Uganda’s leading English newspaper with a daily circulation of 26,941 copies as of 2017. The Government owns a majority stake of 53.34% shares in the company and the rest of the shares are owned by individuals, organizations and companies. President Xi’s vision is a win–win principle. It is how China wants to underline its relations with other countries including Uganda. But how does the press in countries like Uganda project these relations. What kind of implications do such projections have for these relations? This paper focuses its analysis on randomly selected articles from 62 newspaper editions covering the two separate months that coincide with the first month of the year when China marked its 40th anniversary of the reform and opening up policy and the first month of the year when it marks its 70th anniversary as a country. This paper analyses the selected articles and draws conclusions based on the perceived projection of the issues tackled.

111.2 January 2018 The first article in 2018 with reference to China in New Vision is a commentary by Edward Kafufu Baliddawa, an economist whose principal argument is that overdependence on foreign support cannot launch Uganda into a middle-income country by 2020. He cites China and Singapore as examples of countries that used what they had to develop. “The Chinese and Singaporeans didn’t get their solutions from New York, Paris, or London. In fact, it is high time we started having confidence in our own people and companies,” he states. In effect, Baliddawa is pointing to China, as a country for Uganda to benchmark to spur its own development. In building his argument, however he raises concern that Chinese firms are getting the bulk of construction contracts for the year and that all the benefits will accrue to China. He also cites an earlier parliamentary report that implicated a Chinese firm in impropriety to buffer his argument. Left without comment, such an article ends up projecting China among locals as an exploiter and not as a partner offering expertise and resources for long term infrastructure projects, which Uganda cannot achieve on its own due to limited capacity and resources. 1

The New Vision has a 53.34% government stake, while the rest of the shares are owned by individuals, parastatals and private companies. It was started in 1986, and first listed on the Uganda Securities exchange in 2004. As of 2017, it had a daily circulation of 26,941 copies, the highest for an English newspaper in the country. The Daily Monitor, its closest competitor for the same period was selling an average of 17,132 copies per day.

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The next article selected is a review of major events of the previous year in a syndicated article from the Xinhua news agency. Top on the list is the enshrinement into a UN resolution of “A community with shared destiny for mankind,” as earlier espoused by President Xi Jinping in an address to the UN office in Geneva on January 18, 2017. The article points out how the concept has been received on the global stage through endorsements by the UN Security Council, the Human Rights Council and the first committee of the UN General assembly. The same article also picks out the 19th congress of the Communist Party of China (CPC) as another key event of the previous year because of the deliberations that took place and their wider impact on the rest of world. In effect the CPC set the tone for China’s foreign relations based on peace, development, co-operation and mutual benefit. These positive and progressive projections of China, however, are overshadowed by the use of a picture of US President Donald Trump announcing the withdrawal of his country from the Paris Agreement on Climate Change, a decision which even the UN Secretary- General Antonio Guterres described as extremely disappointing. What was of substance in regard to China, does not get the prominence it deserves in New Vision, due to the use of a picture President Trump, who is an avowed climate change denier. In another article on the status of the Ugandan economy in 2017, Samuel Sanya, a journalist, in an apparent reference to China, quotes the chairman of Kampala City Traders Association, Everest Kayondo, lamenting over Uganda’s re-export trade. Without going into specifics or giving details, Kayondo says they have been affected by competition from the Dubai and China-based manufacturers, who have set up outlets in the country. He says these outlets were offering lower prices, hence pushing his members out of business. The article, however, lacks balance because no attempt is made to interview the alleged manufacturers. Such unbalanced projections of trade relations in the press between Uganda and China can potentially skew the perception of China negatively in the local public domain. Uganda no doubt imports a host of products from China including textiles and leather, among others. Over the years, Uganda has become a re-export centre of these goods to other countries in the region like the Democratic Republic of Congo, South Sudan, Rwanda, and Burundi. Cognizant of that fact, Uganda has been working with China to set up industrial parks in the country to reduce the cost of doing business and to create more jobs to fast track development of the economy. Goodwill tiles factory, whose principal investors are Chinese is one such firm, which is making high quality tiles, thanks to ties between China and Uganda. For sustainability of the industrial parks strategy, the government has adopted a policy of attracting such Foreign Direct Investments2 to bolster the economy. 2

President Yoweri Museveni in his 2018 New Year message published in the New Vision, January 3, 2018 edition on page 16 stated that “the other effort already underway is to attract more FDIs” using the country’s abundant natural resources, favourable climate, good infrastructure and a highly educated population. He also stated in the same article that the Harvard Centre for International Development in a recent study indicated that by 2025 Uganda will be the fastest growing economy in the world, with India in the second place.

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Furthermore, China Communications Construction Company (CCCC) early in the year is mentioned in an article by Emmanuel Alomu. It is in regard to the death of a Ugandan worker following a machine accident. Although, the article is taken out of a police report, it again makes no attempt to get a comment from CCCC and the family of the deceased. The reader is left to draw his or her own conclusions. The fact that the Chinese company is working on the Soroti-Moroto road, a major infrastructure project for the country, is again inadvertently taken backstage in the court of public opinion in regard to the safety record of the Chinese firm, yet it has not been afforded an opportunity to comment on the incident. The international news section of New Vision on January 4, 2018 published an article about 16,000 electric buses that had been put on the road in the Southern China city of Shenzhen. The article highlights the city’s campaign to curb air pollution, which is in line with efforts to meet the global carbon emission cuts that China signed up to in the Paris accords. Although a brief report, it underscores China’s efforts and projects it as leader in the crusade against greenhouse gas emissions. The Shenzhen project has an emerging parallel in Uganda, where the country is piloting a project to manufacture electric buses locally.3 It is being executed through a partnership with another company in China. The next article selected focuses on a ban on ivory trade by China. According to the World Wildlife Fund, the global conservation agency, the decision will help reduce illegal ivory trafficking and poaching of elephants. China’s State Forestry Administration in the article describes the decision as “a gift to the elephant”. The decision resonates well with Uganda, a country whose elephant population was previously threatened by poaching for ivory. The article projects China, as a country that respects mutually beneficial international conventions. Another article written by Benon Ojiambo, brings out an element Chinese foreign policy based on dialogue. Taken out of a meeting called to address challenges faced by Ugandan businessmen in doing business with Chinese, Zheng Zhuqiang, China’s ambassador to Uganda calls for strengthening of dialogue and cooperation to address any concerns, which firmly re-echoes President Xi’s vision. He also points out that between January and September 2017, investment by Chinese enterprises in Uganda averaged $292dm representing a 217% year-on-year growth rate. Ugandan trade minister Amelia Kyambadde, who presides over the meeting, asks the Chinese business community in the country to explore opportunities in the manufacturing sector to further reduce Uganda’s trade deficit. It is apparent acknowledgement that both countries stand to benefit from such cooperation. Furthermore, an article on the Africa Business and Investment forum published on January 31, 2018, quotes President Yoweri Museveni praising the Chinese entrepreneurial spirit. He points out that they were quick at spotting investment

3

Chinese automobile firm CHTC partnered with Uganda’s Kiira Motors Company to offer technology transfer and capacity development for Ugandan engineers. Six Ugandan engineers are undergoing training at CHTC in Nanchang. Two electric buses with a capacity for 90 passengers have so far been completed and will be shipped to Uganda by December 2019.

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opportunities in Uganda. He refers to Africa as a dream destination for investors, with a great return on investment.

111.3 January 2019 Two separate articles on the same page on the first day of the New Year refer to an investor and a company from China. The lead article details police investigations into a fraudulent deal in which some Ugandans plotted to sell off land belonging to the national referral hospital to an unnamed Chinese investor. The other article is a suit in which the Uganda National Roads Authority is jointly sued with Chinese construction firm China Railway 5 Engineering Group over damaged telecommunications equipment. The connotation of such an association, even though remote is inherently negative. It takes the shine off the Kigumba-Bulia-Kabwoya road or the planned investment. There is need for Chinese investors and companies to increasingly cultivate a reputation, which is above reproach in line with President Xi Jinping’s advisory at the Third Plenary Session of the Central Commission for Discipline Inspection of the 18th CPC Central Committee (Xi 2014).4 Underscoring the importance of cooperation, former US President Jimmy Carter5 in an AFP syndicated article calls on the US and China to work together on development in Africa. The article is in perfect alignment with President Xi Jinping’s advocacy for building a community with a shared future for mankind. The Carter position is a positive projection and an apparent departure from President Donald Trump’s unilateral and confrontational foreign policy. The successful landing of Chang’e-4 probe on the far side of the moon as reported in the New Vision raises China’s profile in space exploration not just in the Ugandan press, but also globally. That article is followed by yet another four days later, giving more insight into China’s new space clout. Both articles project China as a country to watch in the field of space exploration. Additionally, the visit by North Korea’s leader Kim Jong Un to China early in the year, projects China as an international peace broker considering the stand-off between the US and North Korea. Back to infrastructure projects, two of four prequalified consortia of bidders for the Jinja-Kampala expressway are Chinese firms. The China Communication Construction Company, which distinguished itself by constructing the Entebbe Expressway is one of these companies. The article projects these firms in positive light, as key for implementation of the government’s infrastructure agenda. Another positive projection of the close ties between China and Uganda is manifest in the Makerere University and China University of Petroleum plan to establish an institute of petroleum. 4

In a speech on January 14, 2014 President Xi Jinping called on CPC party officials to uphold integrity and fight corruption. 5 In 1979, during the cold war, the then US President Jimmy Carter reached out to Chinese leader Deng Xiaoping to relations between both countries.

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Last but not least, discussions between President Yoweri Museveni and a Chinese delegation of investors who visited him at his Rwakitura home over a proposal to establish an industrial zone along the Lyantonde-Mbarara highway, projects close development ties between Uganda and China.

111.4 Conclusion The New Vision newspaper on the whole, projects the China-Uganda relations in a positive light. Projections such as China’s efforts in support of conservation, its entrepreneurial and manufacturing prowess and its efforts aimed at addressing climate change through technological innovations firmly resonate with Uganda’s growth aspirations. In addition, several landmark infrastructural projects, which have received extensive coverage like; Isimba Dam, Karuma Dam, Entebbe expressway and airport expansion in Uganda have been handled by Chinese firms. Recent collaboration efforts made by the Chinese embassy in Uganda with the New Vision have seen an increase in content on China published this year. Yet, the absence of comment or lack of balance in regard to some articles that cite impropriety in the dealings of firms associated with China needs to be investigated further. The silence or lack of comment from China or firms projected in negative light can negatively skew perceptions about China, its firms and citizens in the public domain.

Suggested Reading “Africa a Dream Destination for Investors – Museveni” (2018, January 31). New Vision. p. 3. Alomu, E. (2018, January 3). “Machine Crushes Construction Company Worker to Death.” New Vision. p. 26. Balagadde, S. (2019, January 7). “4 Bidders Prequalified for Jinja-Kampala Expressway.” New Vision. p. 27. Baliddawa, E. K. (2018, January 1). “Overdependence on foreign support cannot launch us to middle income status by 2020.” New Vision. p. 19. “China’s New Space Clout Worries the US.” (2019, January 7). New Vision. p. 18. “Chinese Probe Lands on Moon’s far Side.” (2019, January 4). New Vision. p. 26. “Chinese Roll out Electric Buses.” (2018, January 4). New Vision. p. 19. “Chinese Investors Meet Museveni, Propose Industrial Zone.” (2019, January 31). New Vision. p. 3. “Jimmy Carter Says US, China should Partner in Africa” (2019, January 2). New Vision. p. 28. Kitubi,M. (2019, September 9).” “Kiira Motors Partnership with China Yields Result.” New Vision. p. 31. “MAK to Build first Petroleum Institute.” (2019, January 10). New Vision. p. 5. “North Korea’s Kim makes Unannounced China Visit.” (2019, January 9). New Vision. p.27. Ojiambo, B. (2018, January 29). “Kyambadde Wants Chinese into Manufacturing.” New Vision. P.43. “Police Probe Attempt to Sell Mulago Hospital Land” (2019, January 1). New Vision. p. 5.

111 China-Uganda Affairs in the Ugandan Press Sanya, S. (2018, January 1). “Economy trudges on.” New Vision. p. 31. “Top 10 World News Events of 2017.” (2018, January 1). New Vision. p. 20. “UTL sues UNRA for sh850m Compensation” (2019, January 1). New Vision. p. 5. “WWF Lauds China over Ending Ivory Trade.” (2018, January 5). New Vision. p.30. Xi, J. (2014). The Governance of China. Beijing: Foreign Languages Press.

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Part IX

Sustainable Development

Chapter 112

Innovation Perspective as a Development Impulse to Improve the Future Francisco Javier Velázquez López

112.1 Introduction Nowadays, the effects of individual actions are known in real time for that reason it is required a special attention to the results of public policies, transforming profoundly methods of acting, satisfying citizen demands and redesigning public action objectives. On the other hand, the development level of Ibero-American countries has increased in the last decades which carries the increase of citizen demands that often become even more complex and demand fast and effective responses.1 In the Ibero-American Charter for Public Service approved by the Latin American Center for Development Administration (CLAD)2 is indicated the need of substituting “bureaucratic visions on Public Administrations based on the adoption of standardized routines and the reproduction of established procedures and their replacement by approaches oriented to results production, innovation and learning.” In Ibero-America, with the exception of the European sphere and partially in some of the countries of the area, the substitution of the bureaucratic model must be treated with prudence and considerable caution. Since Max Weber,3 who designed 1 OECD (2016) Government at a Glance: Latin America and the Caribbean 2017, OECD Publishing, Paris. 2 This Ibero-American charter was written by Francisco Longo in 2003 commissioned by CLAD and approved by Board of Directors in Santa Cruz de la Sierra, Bolivia, on June 26th and 27th of 2003, page 31. 3 Many centuries before Max Weber, the Chinese developed a very efficient bureaucratic model: …mandarins who had never wielded a sword often led the wars. “Good iron is not spent to produce nails” says a Chinese proverb which means that talented people were incorporated to civil bureaucracy and not to the army. Homo sapiens, Harari, 178.

F. J. V. López (B) Latin American Center for Development Administration (CLAD), Brussels, Belgium e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_112

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and established the essential principles of bureaucratic organization and also highlighted some of the problems of bureaucracy,4 there is no better organizing system of public administration than bureaucratic organization. So that sometimes the diatribes against bureaucratic organization cause certain blushing in countries where still rule deep-rooted patterns of prebendalism and accentuated politicization. Common sense points us to start to develop bureaucratic organizational schemes and to correct their mistakes, which exist, but not to excommunicate the system and simply substitute it by a public administration more based in rules of party occupation of power than in rational designs of organizations functioning. Developed countries have professional bureaucratic organizations, even the ones which often make attempts to discredit this form of organization. There is no doubt that still in present-day society of the fourth industrial revolution,5 innovation, technology and creativity are essential elements of the functioning of any organization. In private companies and in public organizations, innovation is more and more not only an organizational trend but a structural need. As stated in the Ibero-American Charter for the Public Service, it is convenient to emphasize about the aspects of obtaining results, innovation, and learning. In the Ibero-American Good Governance Code, approved by CLAD in 2006,6 in one of its sections, the member countries point out that they shall secure that public management should have an approach centered on citizen, in which the essential task will be to improve in a continuous way the quality of information, the attention, and provided services. So, this is the first step towards attitudes that nowadays must be adopted by public administrations of the twentieth century: being concerned about citizen attention as a significant breakthrough to listen what they have to say in order to improve public services.7

4

“Any kind of concession of usufruct, taxes and duties to the monarch or the official for personal exploitation implies always a weakness regarding the type of pure bureaucratic organization.” (page 29) What is bureaucracy? Max Weber. 5 As Fernando Henrique Cardoso, defines it: “the fourth productive revolution” pointing among its features “it seems more financial technology, it is fragmenting old classes and dissolving their cements of cohesion, becoming the corresponding ideologies empty” El País, 10/20/2018. 6 Ibero-American Code of Good Governance approved by members of CLAD representatives on June 23rd of 2006 in in Montevideo (Uruguay). 7 Carles Ramió in a recent article, in which he develops this need: … it involves, on one hand to promote new approaches, methodologies and practices in order to empower and strengthen the innovation on the inner of public institutions and to contribute the cooperation among society actors, private sector, organizations of third sectors among others. On the other hand, it involves acknowledging available abilities in society itself and the benefits that can be provided in designing and executing of public policies, leaving behind the approach of passive receptive citizens of institutional actions to become main characters and producers of their own solutions. Article: “Reactionary tensors to avoid and progressive tensors to promote the achievement of public institutionalization and innovation in Latin America” Revista del CLAD Reforma y Democracia, N°. 61.

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Notice, in this regard, that pressure is made on a scheme of citizen service, going further to what in present-day times have been the principles of an open government, stated in the foresaid Charter, also approved by CLAD.8 However, this change of paradigm which is connected with other changes that are needed in public administrations, is based primarily on a different way of working, certainly a different way of selecting public officials or public servants and a more intense attention by political parties to public administration of labors. On this basis when we talk about co-responsibility in the execution of public policies, it will be mandatory to change mentality and legislation as needed to perform a public action which not only stimulates the enquiries of affected citizens but also to grant participation possibilities.9 Public organizations must be prepared to carry on joint actions of projects designing, consultation of interested parties, actions of co- responsibilities and the search of better solutions to satisfy needs. It is not worthless the training labor which has been made with the officials themselves to understand that they not only have to manage but also participate with the citizens in making projects.

112.2 Different Way of Performing The performance of public administrations must be different today and in the future because we can find “perverse problems”, which are by their own nature uncertain and complex and that cannot be solved partially or agreed in a classic way, but according to the Organisation for Economic Co-operation and Development (OECD) “they require concerted, adaptable and accurately directed approaches.”10 Their features must be based on parameters that we detailed on the annex attached and explain below.

Business Demands Private companies have introduced new ways to offer services (internet, by direct applications, sales online, payments by mobile phones) so that, this fact tends to increase citizen expectations on providing public services. In summary, it is about to modify targets: not to react to the problem (that must be solved in any case) and to prepare us to exercise proactivity which allows to anticipate events. 8

The term “Open Government” is defined as combined mechanisms and strategies which contribute to public governance and Good governance, based on transparency, citizen participation, accountability, collaboration and innovation, centering and including citizens in decision-making process, as well as the formulation and implementation of public policies to strengthen democracy, public act legitimacy and collective welfare. 9 Ibid Carles Ramió. 10 OECD, Panorama of Public Administration. 2017.

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The velocity of change and consequent innovation, in private company’s spheres, result in news needs that public administrations must attend to without delay. They are fair approaches that when not suppose advantage of any company or corporation over any others, create proposals which often establish new ways of development and performance. Consequently, administrations should not imply an impediment but must be an impulse of new possibilities of introducing projects which improve or contribute to civic life.

Establishing Participation Channels People’s participation in public matters represents a political and technical need at the present day. A political need due to it is highlighted through a superficial analysis of the programs of political parties. A technical need is based on knowledge dissemination and its extension, public administrations and public officials or servants are not aware of everything because the extension is impossible. Therefore it is essential to consider other points of view or different solutions.

Embracing Technological Innovation The introduction of information and communications technology to public administrations has become a reality for decades. Hundreds of small and medium enterprises or companies work daily in public Institutions developing and maintaining applications and webpages which contribute to relations between citizen and public administrations. On the other hand, the increasing of gross domestic product in Latin American countries in recent decades, even though their reduced dimension of their states which remain being small in relation to developed countries,11 has produced an evident disruption of technological instruments, creating a digital population that demands a different and digital12 behavior of the public administrations. Well, now it is about setting the basis even more clearly so that innovation based on technological, should be admitted in administrations and become potential or even created, by for instance, laboratory innovation and other innovate organizational solutions that already exist in many Ibero-American countries.13 Innovation and technologies do not always represent a positive combination. Innovating must be a reality but to innovate does not imply doing the same, transferring

11

OECD Panorama of Public Administration. Public expenditure reaches an average of 31% of GDP compared with 41.5% in OECD countries; however, this difference is decreasing. 12 OECD (2016) Public Administration’s Panorama: Latin America and the Caribbean 2017, OECD Publishing, Paris. 13 In recent IDB publication about Innovation laboratories…

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printed papers to a digital backup or requesting same quantity of requirements by Internet. If we continue doing the same things we used to do before but by applications, maybe this will result in saving time but does not mean we should progress. Substituting a conglomerate of citizens by an Internet appointment not considering the ones who give up to it, shall result in dead times. This experience we take from some Ibero-American countries creates more frustration in citizens and lack of productivity of the officials or public servants in charge of those procedures. It is mandatory to combine technologies with a real management ability so that dead times should be avoided and needs and demands of the citizens should be satisfied.

Attending to Citizen’s Needs Among the essential aspects of the Open Governance model, stated in the IberoAmerican Charter for Public Service approved by CLAD,14 the role of the citizens and their participation on public matters are not less important. Thereby, it is possible to assure that frequently citizens know more about their needs or priorities than specialists or the ones in charge of public policies. The existing facilities of communication and massive use of social networks support this reasoning. We also deal with some political and trade union problems which produce “unidentified mass movements” and result in a special concern because the traditional democratic institutions are unable to control and lead. For that reason, the performance of the governments becomes complicated and forces to reconsider the relation among them and to create new formulas of management.15

112.3 Innovation Does not Involve Only Technology There is a certain turmoil when referring to innovation in public administration, even in the organizational context: departments are created where these two issues are indissolubly linked. But innovation is not only a matter of technology but an introduction of new ways of getting things done, a continuous change of organizational culture, of having a vision of “looking beyond,”16 of awarding those capable to innovate or even improving professional career of those who propose innovative measures or creative solutions to problems. Innovation emerges beyond comfort zone, beyond failures and projects which have been filed. On this basis resilience appears to be important, due to is in not another competence, required to all public management 14

See the Ibero-American Charter for Public Service approved by the fifth Ibero-American Conference of Ministers for Public Administration and State Reform. 15 See Fernando Vallespín in El País (3/23/2018). 16 Octavio Paz.

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positions, but gives us the ability to resist and overcome difficulties and learn from them. To handle the necessary challenges related to this fourth industrial revolution.17 It is unavoidable to create a different working model, fact that not only concerns to the ones in charge of organizations but servants or officials themselves and also to laws and the rest of regulations which apply to the inner of the organization. Officials or public servants must be more flexible and accurate and open to new ideas, also the ones in charge of organizations have to avoid the terror of failure of the implemented experiences. It is true that if we compare private companies or the path of any great businessman that have succeeded establishing big corporations, we can detect significant failures before economical and institutional success. This process is even more difficult on public sphere, but there are some instruments even budgetary that establish limits to certain pilot programs or experiences or any other associative formulas that allow to take new paths that if incorrect, the effects are minimal. In all countries there are constant examples of circumstances that obstruct certain projects and in some cases in cyclic ways like the ones corresponding to any former presidential term.18 Another element which contributes to this transformation process of the public administration and public servants or officials is related to the inclusion of methodologies containing new ideas and different approaches from traditional. A legal approach is significant, necessary, and imperative, but not unique. There are other visions as necessary as this one, based in economic science, politics, statistics, sociology, and even history that may be considered when executing public policies. As a consequence, selective processes must be modified to introduce these knowledges. Another issue of concern is to pay attention to the cluster of public institutions, organizations, and bodies of all types often dependent of different territorial levels that extremely complicate processing grants, permissions, or authorizations of citizens. In the territorial distribution of power especially in federal or compound states, a very important advantage consists of consensual decisions avoiding arbitrariness and discretion since decision has been often based on rules which are dependent of different territorial spheres and in occasions from different political parties. However, to citizens (and especially private companies pretending to establish trade or businesses) the process must be a thorny path of long standing. A figure authorized by law and a significant progress to citizens is the agreement among different organisms of single windows or joint formalities. In any case, when difficulties are insurmountable at short term, coordination formulas must be established to solve them. Besides, it is also imperative to ask: Is this procedure necessary? Is it mandatory? Considering these two questions leads in the discovery that data issues are already in state hands and consequentially intensify efforts of avoiding a new request.

17

Expression of Steven Pinker taken: in defense of illustration. In some Ibero-American countries railway structures of public works and highways which are unfinished produce certain anguish. When an explanation is requested the accurate reason or answer is that it was a project related to a former presidential term.

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112.4 Innovation Within the Framework of SDGs as Impulse of Development The goal N° 9 of the Sustainable Development Goals (Industry, Innovation, and Infrastructure) applies the term innovation as an element to be included to achieve development. Not just in terms related to public spheres due to this development agenda was not only designed for participation of the State as a unique responsible, but also in private sector (as co-responsible) as participant in the development path. As stated in 2030 Agenda the idea is not leaving anyone behind. In the interest of the matter herein discussed, innovation in private sector not only leads out to technology but also to make things in a different way, searching new ideas, establishing new alliances, and obtaining a shared benefit with the environment (social responsibility) as a result of them. It is evident that actual scenarios are each time more complex from economic, social, and environmental points of view and that is where more innovation is required. From industrial point of view in order to impulse healthy economies and to achieve the use of resources without jeopardizing the environment and to promote decent work with quality employments, innovation must be achieved and from infrastructural point of view it is required to innovate to build a reliable and resilient infrastructure which be able to resist onslaught of nature.

112.5 Conclusions It can be concluded that innovation in administration must never forget the essential respect to law timelines and citizen guarantees so that, the implementation of innovated experiences must be balanced between respect to rules and citizen rights, and the attention and immediate use of innovating possibilities based or not in technology, which contributes in a direct way to the developments of states. And, on the other hand the private sector has much more to contribute as a co-responsible sector in leading countries to achieve better ratings of development at global scale. In private companies and in public organizations innovation is becoming more not an organization trend but a structural need. So, this is how innovation can lead us to further development, and this requires a change of paradigm to all involved parties that are willing to have better life conditions in the years to come.

Chapter 113

Modernization: A Perspective from the Periphery Giga Zedania

113.1 Introduction It is noteworthy when one sees that one term assumes two opposite directions in the same period. At the end of the 1970s and beginning of the 1980s “modernity” and “modernization” seemed to be terms to be relegated to the semantics of the times past, with the declaration of the “postmodern condition,” with the announcement of the end of the “grand narratives” of freedom, development or equality in Europe and North America; add to this the critique of ecological consequences of the modernization processes developed around the same time and the overall picture will definitely be a negative one; but exactly in the same years the ambitious modernization project was announced in China; forty years later the world has significantly changed because of it, in the period which was supposed to have left modernity behind. This comparative perspective is the only right one when discussing modernization projects and processes around the world. And there are certainly more ways and models to see than these two. There are plural and pluralistic experiences and models of dealing with the semantics and reality of modernity and modernization. One interesting example is the experience with it made in the periphery: first, part of the Russian empire, then part of the Soviet Union, then part of the post-soviet space afflicted with political and economic instability. The example, namely the Georgian one can give an interesting vista on the theory, discourse, and practice of modernization.

G. Zedania (B) Ilia State University, Tbilisi, Georgia e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_113

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113.2 The Word and Its Substitutes The words “modernization” and “modernity” are latecomers in the Georgian language. One can name a few reasons for this delay. First, Georgia was not part of the European debates when the word “modern” first turned up in European languages. Intellectual life in Georgia was not affected by it in the Middle Ages when it was used in Western Europe in the context of philosophical and theological discussions, or in the seventeenth century when the “quarrel of the ancients and the moderns” was revolving around questions of art and literature (Gumbrecht 1978). After Georgia was annexed by the Russian empire in 1801, the Georgian language adopted through Russian and German languages the way of translating “modernity” as “new time” (“Akhali Dro”, Hovoe BpemR, Neuzeit), although the phenomenon itself was thematized and discussed. Finally, when, in the twentieth century, the humanities and social sciences began to consider the questions of modernity and modernization as their central concerns, the discussion in Georgia halted because of the ideological pressure coming from the Soviet power, which made the free development of the social sciences and humanities an impossibility. But when the Georgian academic community was freed from external constraints and was to discuss the issues and use the terms in the beginning of the 1990s after the fall of the Soviet Union, modernity and modernization were not necessarily the topics with which the reflection started. Two paradoxical developments took place instead. • In the humanities the debate about postmodernism and postmodernity started in Georgia earlier than the one about modernity. In the 1990s it was the discovery of the discourse of the end of “grand narratives,” used by Lyotard (1984) to name the advent of the “postmodern condition,” which very much attracted the minds and hearts of the newly fledged intellectual class. There were attempts to describe the post-Soviet condition of Georgia as one more instance of the postmodern condition in general. However naive particular examples of these attempts were (Katsitadze 2013), there was a deep insight lurking behind these endeavors: an insight into the at least partially modern nature of the communist project. The problem with these analyses of Georgian postmodernity were twofold: first of all, there was no reflection on the ambivalent nature of the Soviet modernity; second, there was substantial confusion between an epochal and an aesthetical sense of the term. Most of the times postmodernism was being discussed by scholars with a background in the humanities (philosophers, psychologists, literary critics) so one could often be confronted with strange attempts to describe post-Soviet Georgia after the civil war of 1992–1993 and two ethno-political conflicts in terms drawn from the analysis of the aesthetics of J. L Borges and U. Eco. • In the social sciences the debate about transition superseded the possible one about modernization. The “transition paradigm,” described by T. Carothers as the one dominating political science right after the communist collapse (Carothers 2002), dominated the whole field of the newly institutionalized social sciences in Georgia. The discussion in the first post-Soviet decade was exclusively about the transition from the totalitarian (or authoritarian) political regime to the democratic

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one, complemented by the transition from the command economy to the market economy. The process was considered to be a straightforward one, the Georgian case complicated by the urgency of solving ethno- political conflicts in Abkhazia and South Ossetia. But theoretical reflection on the broader societal context was almost nonexistent. It was not only the political and economic topicality that was driving this prevalent interest in double transition; it was also the very scanty and fragmented and, in many cases, non-existent tradition in social sciences, which made it impossible to develop an adequate language to describe a sweeping transformation of the Georgian society by drawing on already existing theoretical and empirical Western scholarship. The change occurred in the mid-2000s when the dominant discourse of postmodernity and the dominant transition paradigm were relegated to the margins. The discourse of modernity and the modernization paradigm came to the foreground. This change was intimately linked with the political and social context: the revolution, which happened under the slogan of democracy, quickly became the revolution for modernization of the country. Fighting against corruption, building public institutions, transforming societal values: these were the new slogans, often to the detriment of democracy. Modernization became the new keyword.

113.3 Theories of Modernization If we wish to define modernity it is very difficult to avoid the central semantic field related to the concept of differentiation. This concept can be formulated in strictly sociological terms, as the functional differentiation of autonomous societal systems such as politics, economy, religion, law, science, or art (Luhmann 1997). But this principle can be formulated in other ways as well. For example, we can speak, with Pierre Manent, of the regime of separations, and name the six most important of these separations: the separation between professions (division of labor), the separation of powers (legislative, executive, judicial), the separation of church and state, the separation between civil society and the state, the separation between the represented and the representatives, and the separation between facts and values (Manent 2003). Thus, modern life is always a life divided, fragmented, differentiated, no longer unified. Jumping over the heads of the classics of sociological theory, I would like to sketch the modernization theory proper, as developed in the 1950s and 1960s. The problem with modernization theory is that it is not just a theory, it is also a discourse (cf. Schelkle and Kohli 2000: 49–72). Its first context is not necessarily the one of academia. Its origin goes back to the period after the Second World War, when the confrontation between the Soviet and the Western worlds was reflected on the ideological level as well. The Soviet world had Marxist-Leninist philosophy as the ideological foundation for both home and abroad; this was the modernist and modernizing ideology of incessant progress, relying on the assumptions of the technological progress ushering in social change. Modernization theory and, even more,

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the modernization discourse in the United States and Western Europe was developed as an ideological counterpart to the Marxism-Leninism. Modernization theory had, in a way, a double origin, although the second was not completely independent of the first. The first source and, in a certain sense, instance of modernization theory is to be found in the sociological conception of Talcott Parsons. Parsons is believed to have discovered “evolutionary universals” that “any organizational development sufficiently important to further evolution that… is likely to be ‘hit upon’ by various systems operating under different conditions” (Parsons 1964: 339). The list of the evolutionary universals characterizing modern society, according to Parsons, comprised “a differentiated, predominantly universalistic legal system, money and markets, “bureaucratic” organization, and the pattern of democratic association with special reference to its development at the level of government in large-scale societies” (Parsons 1964: 340). According to Parsons, these four universals have the same significance for modern societies as religion, language, kinship, and technology had for the earliest human societies of which we have knowledge. But Parsons never assumed that there was a linear historical movement from tradition to modernity, which would put all these “evolutionary universals” strictly in one of the historical forms. Parsons’ aim was to capture the complexity of human society, but precisely because of this complexity it was difficult to appropriate the entirety of his theory (cf. Joas and Knoebl 2009: 315). The more accessible and more popular version of the modernization theory was developed in the 1950s and 1960s by scholars such as Daniel Lerner, Walt Rostow, Marion J. Levy, and Alex Inkeles, many of whom were heavily influenced by Parsons To take one prominent example of this type of theory, we could look at Daniel Lerner’s theory as expounded in his book The Passing of Traditional Society. Modernizing the Middle East because it is chronologically one of the earliest (1958) and also one of the most influential versions of it. As the title tells us, Lerner takes a very specific region that he considers to be traditional and follows how the appearance of mass-media in this region breaks down old societal structures, replacing them with new attitudes and values, which themselves bring about economic dynamism. For Lerner, this new pattern of values is centered upon the importance of what he calls “empathy”: the ability to abstract oneself from the horizon of the particularist and familial networks (Lerner 1958: 54). This empathy, according to Lerner, can be formed through the use of modern mass media (newspapers, radio, television). This provides a simple model of transition from traditional society to modern society. The version of modernization theory offered by Lerner is certainly far from being as complex as Parsons’ or Luhmann’s. But it was this simplified version that gained popularity both in academia and outside of it, in the realms of policy making and political discourse. But this popularity did not last for very long—according to one version (Alexander 1987), the student revolt of 1968 marked the end of the modernization paradigm due to the latter’s “ethnocentric” character, which was no longer acceptable to the leftist zeitgeist (Joas and Knoebl 2009); according to another interpretation, it was the internal inconsistencies of the modernization theory that led to its demise. But whichever of these two interpretations one chooses, it should not be

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forgotten that modernization theory experienced a veritable revival in the 1990s both on the level of theory and on the level of discourse; we should not forget, for example, that Fukuyama’s verdict of the end of history (Fukuyama 1992) was just one version of the modernization theory. Thus, the liberal triumphalism of the aftermath of 1989, which assumed that, in view of the demise of the Soviet Union, there would never be alternative to market economy and liberal democracy, was just the last offshoot of the theory and discourse created in the 1950s.

113.4 Modernity and Tradition Among many problems with the theory of modernization there has always been the central one: the problem of tradition. Modernization theory depends on the opposition between tradition and modernity (Wehling 1992: 117). Modernization is conceived as a process leading from the “traditional” to the “modern” society. This model is nothing else than a post-Second World War version of the nineteenth-century classical sociological topos of the distinction between Gemeinschaft and Gesellschaft, be it in its Toennisian or Durkheimian form. This distinction met with a vehement critique because of its “ethnocentric” character. It would presuppose, so its critics argue, that the end goal of the societal evolution is the Western type of society, whereas all other kinds of societies notwithstanding their huge cultural and other differences are nothing else but “backward,” atavistic forms to be surmounted in the direction of rationalization and modernization. This type of critique is still popular, although the major problem with it is the fact that it has never been able to provide an alternative goal of development without repeating the structures of the capitalist, liberal-democratic Western model. But this criticism is external to the theory itself, arguing based on political assumptions more than on theoretical and empirical deficiencies of the theory. But if the name of traditional society in the 1950s could be considered as an adequate description of some Third World countries, it is no longer the case in the globalized world of the twenty-first century. Post-Soviet societies offer a particularly good example of this problem of this difficulty when some of them, or some parts of them, are termed as traditional. The major problem for classical modernization theory in the context of postSoviet Georgia is that one can no longer speak of the opposition of tradition and modernity in any meaningful sense. Georgia has undergone at least two major encounters with modernity: first, during the nineteenth century, within the framework of the Russian Empire by which it was annexed in 1801; and secondly, during the twentieth century as a Soviet republic when it underwent a radical modernization project. Whatever was left as “tradition” after these two waves of modernization in Georgia was very far from any authentically lived life forms that a traditional society could

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offer. One could talk, with Hobsbawm and Ranger, of “invented traditions” (Hobsbawm and Ranger 1983), but we should take into account that this process of invention is itself a product of modernization. This impossibility of opposing tradition and modernity in a classical fashion though should not be interpreted as the new version of the “end of history” thesis, according to which the historical dynamics has exhausted itself, leaving nothing behind for further conflicts and tensions. On the contrary, it should drive us towards discovering a new model for thinking about modernization. If we go back to modernization as differentiation thesis, we could diagnose different modes of dedifferentiation as major impediments on the road to “becoming modern.” Blurring the lines between different systems, challenging the “regime of separations” by erasing the separating borders would be the decisive dynamic, even an “entropic” factor in the process. The interplay between differentiation and dedifferentiation would cover the whole field of societal evolution and development, without any reference to the traditions existing independently of this interplay. Appearance of “traditional” phenomena would be nothing more than the products of “re-traditionalization,” which is one more aspect of the modernization phenomenon. To grasp this double process, one could supplement the theory of functional differentiation with the theory of modernity offered by actor-network theory. As Latour suggests, we can think of two distinct processes under the heading of modernity: one of hybridization and one of separation. Paradoxically, it is the process of separation that underlies the process of hybridization, not vice versa. “The more we forbid ourselves to conceive of hybrids, the more possible their interbreeding becomes—such is the paradox of the moderns, which the exceptional situation in which we find ourselves today allows us finally to grasp” says Latour (1993). Modernization thus becomes the endless and self-referring process of de-differentiation, which is in no need of external resources or constraints. It produces its own internal tensions, conflicts, and dynamics by blurring the lines that it has drawn between different societal systems as well as within these systems and redrawing them again.

Suggested Reading Alexander, J. (1987), Twenty Lectures: Sociological Theory since World War II, Columbia University Press, New York. Carothers, T. (2002), “The end of the transition paradigm,” Journal of Democracy 13(1), 5–21. Dochanashvili, G. (2001), Katsi, romelsats literatura dzlier ukvarda [A Man who was Very Fond of Literature], Saari, Tbilisi. Eisenstadt, S. N. (1999), Fundamentalism, Sectarianism, and Revolution. The Jacobin Dimension of Modernity, Cambridge University Press, Cambridge. Fukuyama, F. (1992), The End of History and the Last Man, Perennial, New York. Gumbrecht, H. U. (1978), “Modern, Modernit.t, Moderne,” in Koselleck, R., Conze W. And O. Brunner, Geschichtliche Grundbegriffe, vol. 4, Klett-Cotta, Stuttgart, pp. 93–131. Hobsbawm, E. J. and Ranger, T. O. (1983), The Invention of Tradition, Cambridge University Press, Cambridge.

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Inglehart, R., Modernization and Postmodernization. Cultural, Economic and Political Change in 43 Societies, Princeton University Press, Princeton. Javakhishvili, M. (1985), Kartuli sabchota romani. Jakos khiznebi, Tetri sakelo, Givi shaduri [Georgian Soviet Novel. Jako’s Prisoners, The White Collar, Givi Shaduri], Merani, Tbilisi. Joas, H. and Knoebl, W., (2009). Social Theory. Twenty Introductory Lectures, Cambridge University Press, Cambridge. Katsitadze, K. (2013), Kopiereba da kheleba [Being and Art], Georgian Biographical Centre, Tbilisi. Knoebl, W. (2007), Die Kontingenz der Moderne. Wege in Europa, Asien und Amerika, Campus Verlag, Frankfurt / New York. Latour, B. (1993), We Have Never Been Modern, Harvard University Press, Cambridge, MA. Lerner, D. (1958), The Passing of Traditional Society. Modernizing the Middle East, Free Press, New York. Luhmann, N. (1995), Kausalit.t im Süden. Soziale Systeme 1, 7–28. Luhmann,N. (1997) Die Gesellschaft der Gesellschaft. Suhrkamp, Frankfurt a.m. Lyotard, J.-F. (1984), The Postmodern Condition: Report on Knowledge, Minnesota University Press, Minneapolis, MN. Manent, P. (2003), “Modern Democracy as a System of Separations,” Journal of Democracy 14(1), 114–125. Parsons, T. (1964), “Evolutionary Universals in Society,” in American Sociological Review v. 29, n. 3, 339–357. Schelkle, K. and Kohli, E. (eds) (2000), Paradigms of Social Change: Modernization, Development, Transformation, Evolution, Campus Verlag, Frankfurt / New York. Stichweh, R. (2010), Der Fremde. Studien zu Soziologie und Sozialgeschichte. Suhrkamp, Frankfurt. Wehling, P. (1992), Die Moderne als Sozialmythos. Zur Kritik sozialwissenshaftlicher Modernisierungstheorien, Campus Verlag, Frankfurt / New York.

Chapter 114

A Sustainable Global Food System Cristiane Derani

114.1 Introduction Humans in the near future may suffer from food scarcity. This is already a reality for millions of people.1 Moreover, the increase of diseases caused by inadequate nutrition and additives responsible for cancer, and other health problems are already part of our social and health system concern. This paper aims to precise the idea of sustainability in order to start an earth-centered2 (Bosselmann 2011) discussion of how to organize the global food system3 and achieve the SDG2: End hunger, achieve food security and improved nutrition, and promote sustainable agriculture. Nutrition is the first contact of humans with nature. Their unavoidable connection with the external nature. The better our relations with nature the better our nutrition. Sane and sustainable food production depends on a health environment. Today, our lifestyles neglected this essential relation and, worse, made food a marketable good ruled by market laws that are intrinsically against the laws of our natural behavior in face of food and nutrition. For instance, for the food industry, the higher the consumption of food, specially the high processed and industrialized ones, the higher the profits. Also, the commoditization of food perverts the ancestral happiness of any 1 The number of undernourished people in the world has been on the rise since 2015, reaching an estimated 821 million in 2018. The State of Food Security and Nutrition in the World 2019. https:// www.un.org/en/sections/issues-depth/food/index.html. 2 http://www.harmonywithnatureun.org/ejInputs/. 3 A food system is all processes and infrastructure involved in satisfying a population’s food security, that is, the gathering/catching, growing, harvesting (production aspects), storing, processing, packaging, transporting, marketing, and consuming of food, and disposing of food waste (nonproduction aspects). It includes food security outcomes of these activities related to availability and utilization of, and access to, food as well as other socioeconomic and environmental factors.

C. Derani (B) Federal University of Santa Catarina, Florianopolis, Brazil e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_114

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human society related to the abundance of a harvest. For finance markets, the smaller the food production, for instance caused by climate extremes (drought and flood), the better for commodity prices and the market. How far can such a civilization go? How developed can it consider itself? Reacting to a market’s saying, “produce or perish,” I would rather say, ecological production or we all perish. The destruction of nature, polluting and eliminating water courses, polluting and causing desertification in the soil, and destroying cultures and biodiversity shows much more than a peril to food security and sovereignty. It reflects a structural transformation toward a deeply unjust society. Societies threatened by hunger and injustice react with violent and disruptive responses throughout the history. The 2030 Agenda for Sustainable Development envisages “to end hunger and to achieve food security as a matter of priority and to end all forms of malnutrition,” in such a way as to promote sustainable agriculture and fisheries (24). Furthermore, it dedicates special attention to the productivity and incomes of small-scale food producers, in particular women, indigenous peoples, family farmers, pastoralists, and fishers, including through secure and equal access to land (goal 2, 2.3). The task taken on by our international community is of paramount importance, especially considering the threat imposed by climate change to food production. The target 2.4 of the same document is aware about that and combines the above target with the implementation of resilient agricultural practices that increase productivity and production, that help maintain ecosystems, that strengthen capacity for adaptation to climate change, extreme weather, drought, flooding, and other disasters and that progressively improve land and soil quality (goal 2, 2.4). Climate change is a disturbing reality for food producers. It is already demanding adaptive measures and causing local and regional food scarcity.4 The dimension of the effect of climate change to the food system is enormous also, because it undermines the resources needed to adaptive measures. It increases the loss of biodiversity and water sources and harms the soil. The vulnerability of global food system caused by climate change requires immediate measures against GHGs emissions as well the restauration of ecosystems and implementation of sustainable clean energy sources.

114.2 A Sustainable Food System To understand what a sustainable food system is, it is necessary to concretely understand what sustainability means in this context. Food systems in the world today are divided into local, regional, and global chains of product and value circulation. The sustainability of the whole depends on the characteristics of these movements, interactions, balances and specificities. Because of its diversity and globality, there 4

The effects of climate change on crop and terrestrial food production are evident in several regions of the world (high confidence)(…)Climate trends are affecting the abundance and distribution of harvested aquatic species, both freshwater and marine, and aquaculture production systems in different parts of the world. (…) https://www.ipcc.ch/site/assets/uploads/2018/02/WGIIAR5Chap7_FINAL.pdf.

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Fig. 114.1 Nature not only supports the life on earth, but also provides the productive base for sustainability5

is a great complexity of actors, resources, environments, and activities that must be considered for the construction of its sustainability. The predominant perspective on sustainability is that of building a balance between three pillars: the social, the economic and the environmental (Purvis et al. 2019). The three pillars were explicitly embedded in the formulation of the UN’s set of sustainable development goals (SDGs) (UN 2012). However, this view carries a misunderstanding as it presupposes that these three elements are distinct and would interact through intersection points. This idea has no grounds in reality. Society is a cultural and historical construction built over nature, the sustenance and mediation of all social structure and relationship (Robinson 2004). Economy is an expression of social organization. It is created by and in society, dependent of nature for its organization and development. In this sense, the image of the three distinct pillars is not consistent with reality. We cannot deal with three competing realities as if they were three pillars, nor as realities that interact in certain intersection points. The reality of the planetary unit in which we have shaped our society and from which we have built our economic practices is historically and anthropologically correct (Bosselmann 2017). Far more appropriate is the construction of concentric circles, which even mark out the expansion limits of the economic practice. Economy finds its limits in the social relations and in the planetary boundaries. Economy is a social creation and a subsystem of global ecosystem (Fig. 114.1). 5

Nature, on the one hand, provides the stock of environmental resources, by and large nonrenewable- exhaustible resources as well as the flow of environmental services, by and large renewable—non-exhaustible to the economy to produce material goods and services for consumption to reach the expected level of satisfaction and, on the other, regenerates the bio-mass most needed for a steady state as well as absorb or assimilate or recycle the ‘high entropy’ wastes generated through

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Therefore, for the economy of food production, trade, and consumption to be sustainable, it must respect the limits of nature as well as keep itself in balance with the other social relations. In other words, the food system must respect the conservation of natural resources. It must also respect and build prosperity and equity. This construction is a political and legal attitude, based on the global principles already set out by the sustainable development goals approved by the United Nations. A sustainable food system has to provide the means for the natural resources in the food system to be used without promoting scarcity, destruction, or extinction. Also, the food production, conservation, distribution, and consumption have to be embedded in the following objectives: (1) deliver a balanced healthy diet to consumers, (2) reduce the systems’ negative environmental impact, (3) build a viable, competitive, and socially balanced agri-food sector, and (4) contribute to social equity goals and global food security (Zurek et al. 2018). Moreover, the politics and law of sustainability has to be able to improve justice and an even distribution of wealth in the world. According to Seghezzo (2009), justice is the central aspect for sustainability. In fact, there are several examples that show that an unbalanced relation between society and nature leads to uneven relations among humans, generating scarcity, diseases, and pollution, which have been pointed as important causes of displacement, war, and other kinds of social conflicts. Evidence shows that sustainability is an attitude that is linked with balance and equity, because it implies an intra and inter-generational social distribution of the resources and production results in society at the same time as it builds a use that respects the maintenance of the ecosystems for the present and future generations. With sustainability, therefore, the construction of ecological justice and social justice, respectively, are sought (Gottschlich and Bellina 2017).

114.3 Players in the Global Food System At this point, it will be of interest to present some explanation of the actors involved in the food system without intending to fully exhaust the matter.

production-consumption externalities. Thus, nature or environment or natural resource base is both a ‘source’ of natural capital and a ‘sink’ for the economy. And there is two-way interconnection or interdependence or interconnectedness between these two systems: (1) Productive resources from nature to economy and (2) High entropy wastes from economy to the environment. Mittal, Ishwar and Gupta, Ravi Kumar, Natural Resources Depletion and Economic Growth in Present Era (September 30, 2015). SOCH-Mastnath Journal of Science & Technology (BMU, Rohtak) (ISSN: 0976-7312); Volume 10 No. 3, July-September, 2015. Available at SSRN: https:// ssrn.com/abstract=2920080.

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Food Producers The Global food system relies on a complex global web with different actors from various nations, cultures, and economic levels. It is composed of an intricate and interdependent web. Nonetheless, the power of influencing the movement of this system is unique and vastly concentrated. Producers inside this system have diverse abilities although they comply with the same rules of export and import. This is important to highlight because any change must be adjusted to the rules of trade, or the trade system ought to be able to take over the necessary changes for more sustainable food production practices. One of the major difficulties on making the global food system sustainable lies with the weakness of most food producers in three very common food chain scenarios. In globalized food production, the second link in the food chain is the large food trader companies. They constitute a kind of monopsony, where traders impose prices and specify products leaving producers in a very weak position. Another disadvantage is the competition between big and small producers, where the latter has no chance against the cannibalization of the so-called free market. The market system of global traders on food leads to a commoditization of some basic food products, submitting them to a market logic which mainly contradicts the material needs of food distribution. The production of soy, meat, orange juice, and sugar are developed by companies and massive producers on a large scale over huge land surfaces, and the products are commodities negotiated in the financial market. A trend of product commodification is to set the prices arbitrarily and invert the logic of production in a perverse way, leaving profits for investors and losses for producers when production decreases, as a result of droughts and floods, for example. In such a case, the financing market profits when producers suffer a decreased income. Taking a realistic approach to the way in which producers can transform the food system in a more sustainable and just system, depends on the correction of this unbalanced relationship within the system. Hence, food is traded internationally, any transformation toward sustainability is contingent on international trade rules and global governance. This global food system is responsible for several types of conflicts: economic, cultural, environmental. Small farmers and indigenous people suffer from the exploitation of their land. Water, soil, forests, and people endure the impact of the intensive use of natural resources and pesticide contamination. The production is highly automatized and causes displacement from land to cities causing serious social and economic problems. The access to resources and assets has to be evenly distributed. The Voluntary Guidelines to support the progressive realization of the right to adequate food outline the importance of respecting human rights and the rule of law. They alert us to the need of giving special attention to groups such as pastoralists and indigenous people and their relation to natural resources. They also highlight the necessity for states to act so that members of vulnerable groups can have access to opportunities and economic resources in order to participate fully and equally in the economy. Finally,

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it is important to guarantee a just income for small producers, especially those who work attuned with ecological practices, such as organic, agroecological farming. It is also important to consider the side industry of pesticides and fertilizers. The regulation of their products has been increasing into the EU, whereas other food-producing countries keep a soft regulation of many already banned chemical products. Without a global policy that restrains harmful chemicals into food, firms in “high-standards” countries will migrate to countries with less stringent standards. These kinds of problems are domestic as well as transnational. A global outlook is needed to improve sustainability in this system. A healthy environment depends on a healthy global food chain that increases its awareness along with the accountability of all the links in the chain. Conversely, the foreign producers conform to different legal rules and policies. They are part of another social context with many disparities: geographical, historical, economic, cultural, and environmental. International environmental and trade law are vital instruments for labelling and tracking. In addition, it is important to consider some EU policies able to promote social change in exporter countries. Some examples include phytosanitary requirements, product and process discrimination for social and environmental reasons, along with positive initiatives to promote small farmers and organic producers.

Consumers International trade spatially separates the costs and benefits of environmental exploitation. Consumers never see the environmental or social impacts of buying products (Daly and Herman 1993). An ecological footprint can improve consumer choice for environmentally friendly and healthier food products. Implementing ecological footprint allows the consumer to exercise their right of knowing where, how and by whom their food is produced; what are the environmental pressures and costs brought by the product; as well as the degree of carbon emission and its ecological compliance, due to the conservation of biodiversity and of water and soil resources. It is also the consumer’s right not to produce waste when consuming. For this, it is not enough to have a reverse logistics accessible to the consumer. It is up to the producer to adapt to the latest state-of-the-art technology and quickly and effectively replace plastic and non-degradable packaging, offering consumers the possibility to refuse products that have irreversible environmental consequences because of their incompatible packaging made of materials that are incompatible with environmental sustainability. It is not fair to leave the consumer with no choice. They must have the choice to consume a product that is not packaged using non-degradable materials. It is up to the consumer to choose between returning non-degradable packaging and consuming without such packaging. It is therefore the duty of the producer to deliver to the market products in appropriate packaging for the environment.

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Finally, it is necessary to eliminate subsidies for highly industrialized chemicals and foods by regulating marketing and especially by banning junk food advertising, particularly for children. There must also be a strong policy for healthy nutrition and against food waste permeating the media and the education policies.6 As Food System is mostly global, a just food system calls for an even distribution of gains and losses throughout the planet. The interdependence of trade and financing directly affects justice in food production. The globalized interdependence is economically asymmetrical. The sharing of costs and benefits is unbalanced, especially when depletion of natural resources is considered an economic cost. In fact, free market is unequal in the production of environmental externalities, which causes ecological debt that is unevenly distributed. Ecological debt has to be identified and, further, it has to be corrected considering the global commercial context. Globalized production allows environmental causes and effects to be allocated in different space and time. Therefore, domestic norms and policies can do little about environmental problems when the matter is comprised in a complex worldwide process. Whereas the market is oriented toward future gains, sustainability is a matter of reorganizing production in order to achieve present and future balance between human activities and nature’s metabolism. A balanced society means a just society where equity is a cornerstone of their systems, which includes the economy. When equity is counted as a milestone for the free market, the environment and human rights come before the individual decisions of finance and food production.

114.4 Conclusion: Toward an Ecologically Sustainable Food System The production of food is directly linked to nature, its behavior, fertility, and synergies. It is an economic activity as well an essential social task to keep humans alive. The basis of this activity is nature, on which it is deeply dependent despite of all technological development. Therefore, the way humans produce their food unveils 6

OECD report on climate change also highlight the linkage between food system and climate change” Agriculture has achieved major success in fighting hunger, feeding the world and contributing to economic development, including by providing employment to 28% of workers worldwide. Agriculture also provides agro-environmental services to society, such as flood risk mitigation, and resilience to droughts. However, this success has come at a price. Many of the undesirable impacts on the environment and on human health stem from the intensification of farming practices to meet growing global food demand (e.g. excessive use of fertilizers, pesticides and antibiotics). The food system is a major contributor to climate change, responsible for around 30% of global GHG emission…” https://www.oecd.org/environment/cc/Highlights-AcceleratingClimate-Action-Refocusing-Policies-through-a-Well-being-Lens.pdf. It is also worthwhile to check the Rome Declaration on World Food Security. http://www.fao. org/3/w3613e/w3613e00.htm.

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their culture and how they conceive nature and nutrition (Atkins and Bowler 2016; Counihan and Esterik 2013). The transition to a strong concept of sustainability is driven by two important ideas presented in the literature. First, there is a scientific call to change the anthropocentric utilitarian perspective of nature, putting humans and their lives (society and economics) in the framework of nature. Also, it is important to consider planetary boundaries when society globally decides to develop their production and consumption activities. By the first idea, justice unfolds into justice toward nature. Mother earth’s rights are important to be considered and have to inform human activities within planetary boundaries, which changes the notion of production. The decision about what, where, how, and for whom to produce must be attached to ecological premises for an ecological justice, which is the basis of social, economic and food justice. At this point, it is important to highlight the necessity of changes throughout the global food system, for a prosperous and just food system, following the wording of UN resolution on 2030 Agenda for Sustainable Development. A system that can accomplish a sustainable economic growth and generate decent work throughout the food chain. A system where the use of all natural resources, from air to land, from rivers, lakes, and aquifers to oceans and seas, are sustainable. One in which democracy, good governance, and the rule of law, as well as an enabling environment at the national and international levels, are essential for sustainable development, including sustained and inclusive economic growth, social development, environmental protection and the eradication of poverty and hunger. One in which development and the application of technology are climate-sensitive, respect biodiversity and are resilient. One in which humanity lives in harmony with nature and in which wildlife and other living species are protected (SDG 12), reducing food losses along production and supply chains, including post-harvest losses (12.3), and ensuring that people everywhere have the relevant information and awareness for sustainable development and lifestyles in harmony with nature (12.8). The transformation of our global food system has to be devised from seed to market and from producers to consumers respecting their cultural specificities that also contributes to food security and sovereignty. The food system has to consider the justice among producers, consumer rights, and trade regulation. The right to safe food, right to a just food system and duties of the involved subjects for an ecological global food system. Societies are rooted in nature and take their nutrition from the variety of ecosystems. The balance of the variety of ecosystems are vital for the continue of our life. It certainly demands different patterns of production and consumption, so that we as human beings can continue their existence. Food production is the primeval relation of humans with their external nature, and, therefore the most sensitive issue for a concrete sustainability.

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Suggested Reading Atkins, P; Bowler, I. Food in Society – Economy, Culture, Geography, 2016, Routledge. Bosselmann, K., “From Reductionist Environmental Law to Sustainability Law,” in Brden (ed), Exploring Wild law: the Philosophy of Earth Jurisprudence. Adelaide: Wakefield Press, 2011. Bosselmann, K., “The Imperative of Ecological Integrity: Conceptualising a Fundamental Legal Norm for a New ‘World System,’” in Anthropocene. Kotzé L (ed.), Environmental Law and Governance for the Anthropocene, Hart Publ, 2017, 241–265. Bosselmann, K., Planetary Boundaries: Exploring the Safe Operating Space for Humanity Johan Rockströ, https://www.stockholmresilience.org/download/18.8615c78125078c8d33800 02197/1459560331662/ES-2009-3180.pdf. Counihan, C; van Esterik, P., Food and Culture – A reader 2013, Routledge. Daly, Herman, “Problems with Free Trade: Neoclassical and Steady-State Perspectives,” in Trade and the Environment: Law, Economics, and Policy, (Durwood Zaelke et al. eds., 1993). Gottschlich, D., & Bellina, L. (2017), “Environmental Justice and Care: Critical Emancipatory Contributions to Sustainability Discourse,” Agriculture and Human Values, 34(4), 941–953. https://doi.org/https://doi.org/10.1007/s10460-016-9761-9 Purvis, B., Mao, Y. & Robinson, D. Sustain Sci (2019), Three Pillars of Sustainability: In Search of Conceptual Origins, 14: 681. https://doi.org/10.1007/s11625-018-0627-5. Robinson, J., Squaring the circle? “Some Thoughts on the Idea of Sustainable development,” Ecological Economics, 48 (2004), pp. 369-384. Seghezzo, Lucas, “The five Dimensions of Sustainability,” Environmental Politics, v. 18, n. 4, 2009, pp. 539–556. UN (2012), The Future We Want, resolution adopted by the general assembly on 27 July 2012 (A/RES/66/288). United Nations, New York. Zurek, Monika; Hebinck, Aniek; LEIP, Adrian; et al., Assessing Sustainable Food and Nutrition Security of the EU Food System-An Integrated approach, Sustainability (Switzerland), v. 10, n. 11, 2018.

Chapter 115

Ecological Stability and Sustainable Development in China: A Demographic Perspective Lakshman Dissanayake and Manori Weeratunga

115.1 Introduction It is indeed a great moment for the world to celebrate China’s 70-year development and the construction of the community with a shared future for mankind because the development that we have seen over the last few decades have been unprecedented, and it has given many ideas and concepts to the world to think in a very novel manner in order to revisit sustainable development strategies that the whole world has now embarked upon. One should not forget China’s massive population and its composition which has contributed to its development as well as some constraints because most of the time planners overlook the fact that population structures are fundamental to the development of any nation. We have observed accelerated development of science and technology and the rapid changes in the world economic order and patterns. In this context, population and development have become a very important issue because it is necessary to seek a way to achieve sustainable development with population, economy, society, resources, and environment all in harmony. China has the largest population now, with nearly 1.4 billion.1 In this paper, we highlight the importance of incorporating China’s population size and characteristics to the development agenda in an integrated manner into ecological stability and sustainable development from a demographic perspective. Population dynamics and environmental change are strongly linked in various ways through diverse social and economic mechanisms, at various geographic planes in China as in the rest of the world.

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https://www.worldometers.info/world-population/china-population/.

L. Dissanayake (B) · M. Weeratunga Department of Demography, University of Colombo, Colombo, Sri Lanka e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_115

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115.2 China’s Commitment Towards SDGs on Environmental Issues China is committed with its national plan to implementing the 2030 Agenda for Sustainable Development, which translates each target of the Sustainable Development Goals (SDGs) into “action plans” for China. The objective of the plan is to protect the multilateral trading system and encourage the Doha Round negotiations, while opposing trade protectionism (SDGs 2, 3, 17). It also aims at intensifying the prevention and treatment of pollution from hazardous chemicals, promote recycling and safe disposal of all kinds of wastes of all kinds, and establish an emission permit system covering all fixed pollution sources (SDGs 3, 12) It positions that, by 2020, China endeavors to establish a national centralized and real-time environment monitoring system, improve the environmental information disclosure system, and strengthen environmental law enforcement (SDG 3).2 On climate (SDG 13), it was expected that China’s nationally determined contributions (NDCs) will be integrated into national strategies, and climate mitigation actions will be leveraged in the shift to a new model of economic growth that advances environmental protection. China was expected to urge developed countries to formulate a road map and timetable for mobilizing the international community’s commitment of US$100 billion annually by 2020 to address the climate-related needs of developing countries and fully operationalize the Green Climate Fund (GCF). Although China is attempting its best to be on track to meet its 2030 Nationally Determined Contribution (NDC), but the climate action tracker rate seems to be “highly insufficient.”3 This means that China’s NDC is not ambitious enough to limit warming to below 2 °C, let alone to 1.5 °C as required under the Paris Agreement. However, under current policies, China is also likely to achieve its 2020 pledge. Given that China is on track to achieve its climate targets, its next step could be to set an example by submitting a strengthened NDC to the Paris Agreement by 2020. This is not just China’s problem because the UN Environment’s Emissions Gap report indicates that even with the full implementation of Nationally Determined Contributions, which countries have pledged to reduce their emissions under the Paris Agreement, the planet still faces a likely temperature increase of at least 3 degrees by 2100.4 However, the good news is that China has indicated that it is working on updating its NDC. Furthermore, the Green Climate Fund has signed an agreement with the China Development Bank (CDB), the world’s largest development financial institution, to coordinate their activities in promoting climate action. This important event signifies China’s commitment to identifying opportunities to reduce emissions and adapt to climate change in China and other developing countries.5 2

https://sdg.iisd.org/news/china-releases-national-plan-to-implement-sdgs/. https://climateactiontracker.org/countries/china/. 4 https://www.greenclimate.fund/news/developing-country-entrepreneurs-cause-for-hope-gcf-dep uty-tells-meeting. 5 https://www.greenclimate.fund/news/gcf-slates-future-climate-cooperation-with-china-develo pment-bank. 3

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It is a known fact that consumption is directly linked to economic models based on growth. “Improving the wellbeing of individuals so that humanity flourishes rather than survives requires moving from current economic measures to fully valuing natural capital”. In this context, it seems essential to differentiate economic activity from material and environmental aspects by readjusting national strategies for reusing equipment and recycling materials, reducing waste, obtaining energy from renewable sources, and by consumers paying for the wider costs of their consumption. China has initiated prospect of economic globalization through innovation, coordination and opening up and inclusive development. The country has largely contributed to increasing interdependence of world economies as a result of the growing scale of cross-border trade of commodities and services, flow of international capital and wide and rapid spread of technologies. It reflects the continuing expansion and mutual integration of market frontiers and is an irreversible trend for the economic development in the whole world at the turn of the millennium. China’s role in promoting global openness and corporation by reforming its institutions and helping to set international rules during the progress of its reform and opening-up have been very impressive. It has joined virtually all international treaties and organizations, signed free trade agreements with many countries and regions, initiated the Asian Infrastructure Investment Bank and the New Development Bank, and proposed the Belt and Road Initiative. It is now quite important to assess China’s production as well as consumption in order to find out how far Chinese ecological concerns match with sustainable future of China as well as the world.

115.3 Promoting the Use of Renewable Energy and Creating Green Jobs China’s action to move to renewable energy raises hopes for a low-emissions future. China has been trying its best to move towards renewable energy sources, mainly solar power which should be very much appreciated because of large volume of energy usage due its size of the population as well as huge production base. Solar power has now become the fastest-growing source of new energy worldwide, outstripping the growth in all other forms of power generation. It was reported that r accounted for two-thirds of new power added to the world’s grids in 2016. New solar capacity even overtook the net growth in coal, previously the biggest new source of power generation. The shift was driven by falling prices and government policies, particularly in China, which accounted for almost half the solar panels installed.6 China seems to be leading the way in creating green jobs. China is leading the way, accounting for 3.64 million jobs in the renewable energy sector—comprised of solar, wind and hydropower.7 It has been already understood the essentiality of a 6

https://www.theguardian.com/environment/2017/oct/04/solar-power-renewables-internationalenergy-agency. 7 https://www.chinadailyhk.com/articles/109/72/35/1543821429501.html.

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definite shift to a low-carbon economy in order to avoid irreversible and hazardous climate change effects on economies and societies. It will have great impact on the material consumption related to all production processes. On one hand, reduction of emission of greenhouse gases requires the genuine commitment from enterprises and workers to shift to clean energy sources. In the other hand, there is a necessity to restrain unsustainable use of natural resources, reduce waste, prevent pollution, and safeguard sustainable food production for the growing population. These shifts surely affect considerably economies and labour markets. In this context, the International Labour Organization’s (ILO) concept of green jobs is imperative. Green jobs have been defined as “decent jobs that reduce consumption of energy and raw materials; limit greenhouse gas emissions; minimize waste and pollution and protect and restore ecosystems.”8 The potential for green jobs seems to be higher in developing countries. Therefore, it is very feasible to promote green jobs by especially targeting the young, women, and the poor who need them the most. In this respect, investment in skills development for green jobs is a vital condition for the successful greening of enterprises and economies. In this context, it is important for China to sustain its commitment towards carrying out research on environment-employmenteconomy linkages; training and awareness raising programmes to address the needs of social partners (employers and trade unions) and creating more and more green jobs and decent work in sectors such as waste management, renewable energy, green manufacturing, eco-tourism, and sustainable housing.

115.4 Getting the Youth Involved It appears that younger Chinese tend to be more concerned about climate change, but average Chinese climate change concern is low relative to many countries around the world.9 Many young people today do not realize that their consumption pattern has a significant impact on the environment. In this context, it seems very appropriate that young people to be well-informed about climate change science and mitigation options and to be made aware the consequences of their consumption behavior. Education and training in the field of climate change can also prepare the youth to take advantage of new employment opportunities arising from the shift to a greener economy. Providing young people with information and education on climate change launches a definite foundation for environmental advocacy. During the recent past, the environmental protection departments, educational departments, cultural departments, news units, organizations for women and youth, scientific associations and academic societies have all developed their own environmental publicity

8

http://www.ilo.org/wcmsp5/groups/public/@ed_emp/@emp_ent/documents/publication./ wcms_158729.pdf. 9 https://www.theguardian.com/world/2019/sep/18/china-young-climate-heroes-fight-apathyparty-line.

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and educational activities.10 For example, higher education has provided a great number of scientific, technological and managerial personnel for environmental protection work; On-the-job training has enhanced the quality of environmental managerial personnel; Basic environmental education has cultivated and enhanced young people’s environmental consciousness by offering environmental education in high schools, primary schools and kindergartens throughout the country to cultivate children’s love of nature and sense of responsibility for environmental protection. As crucial stakeholders in the sustainability debate, young people can provide an invaluable perspective that policymakers sometimes do not perceive. Youth deserve a say in environmental politics, and this starts with raising awareness among young people about the key issues at hand and how to get involved in developing and implementing sustainable solutions. We need to recognize that youth are the lifeline of the nation. The focus should be creating conducive environment to make youth leaders at grass root level. China Youth Climate Action Network may be a good platform to start with because its mission is: To coordinate and provide services for organizations interested in promoting youth participation in civil society. Building on our domestic and international contacts we want to build a sustainable low carbon future. We want to inspire and guide young people to grasp the opportunities in China and tackle the challenges of climate change and the transition to a sustainable energy future. We support Chinese youth to become a new driving force to achieve global sustainable development.11

(1) Their focus is to carry out extensive publicity work to raise public awareness on climate change and transition to sustainable energy through joint action and cooperation of Chinese and international youth groups; (2) We support and promote public participation and government action to respond to global climate change and energy issues; (3) We support the engagement of China’s youth with the international community. More than 300 colleges and universities have participated in activities organized or sponsored by CYCAN. More than one million students or people were directly involved and indirectly influenced by our actions. CYCAN action has given strong encouragement to young people to better understand climate change and actively participate in addressing it. CYCAN provides a platform for aspiring young people for personal development and to explore new opportunities. Worldwide, there seem to be no relationship between economic development and resource consumption. China can play a greater role in this regard by creating an atmosphere to raise the awareness of consumers on sustainable products. It is also observed worldwide that with increasing concerns about health and living standards, we are seeing more people buying green foods. However, the knowledge about and tools for sustainable consumption, such as labeling and standards, are still at a low level because the consumers have little access to and information about these issues, and UNEP (United Nations Environmental Program) has been trying its best to make 10 11

http://www.china-un.ch/eng/bjzl/t176940.htm. http://www.climatenetwork.org/profile/member/china-youth-climate-action-network-cycan.

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that change in many settings.12 Promoting sustainable consumption concept among youth in China can bring many benefits not only to China but also to the countries along BRI. This can be done by establishing string linkage with UNEP’s awareness programmes as well as promoting environmental awareness by using Chinese youth among the youth in BRI countries. This will bring fundamental changes to the world and one can expect such an initiative will make the next generation to responsibly take care of nature and the environment. This aspect can be incorporated within the China’s vision of “A community of shared future for mankind” which has been highlighted by the leadership of China at various forums during last few years. What was seen in past was the domination of western powers over developing countries to exploit both physical and human resources which ultimately lead to extend the poverty in those countries as well as depletion of natural environment. However, China’s approach to corporation between the countries is quite different what the West was doing because of the shared relationship which highlighted by making the people at the center of development activities. This has been emphasized quite well in the BRI initiative which is a brainchild of President Xi Jinping in which all the countries along the Belt and Road are bound together for a shared development which ultimately improve the wellbeing of all the communities. In order to improve such activity, there should be some promotion of China’s vision on local TVs in each country which have bi-lateral and corporations. In this context, it is essential to win the hearts of the general public as there can be some opposing view from some part of the community and such views can be eliminated by showing the benefits of China’s vision shared values for common development in the region. Furthermore, more and more seminars and conferences should be organized among friendly countries to show how the shared values for better future could be beneficial to both parties. This can be done by using already identified key informants such as us in academia who believe China’s propositions are for the improvement of mankind and not for any interventions as viewed by some Western allies.

115.5 Concluding Remarks: Population Dynamics, Environmental Protection and Sustainable Development: An Area of Concern in China’s Development Strategy Impending population trajectories depend on assumptions about future trends in fertility, mortality, and migration. Furthermore, the current population age structure impacts future growth by essentially disturbing the overall number of births, deaths and migrations that are implied by fertility, mortality, and migration rates. All three demographic components can have a noteworthy bearing, positive or negative, on future population growth. Ecological impact of population size is not a new 12

http://www.chinadaily.com.cn/cndy/2016-04/08/content_24367276.htm.

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phenomenon because Malthus warned of the harmful effects of unchecked population growth more than two hundred years ago, claiming that human population will exceed the ability of the environment to provide subsistence. Even recent population scientists consider population size as a major determinant of the environmental degradation. The intergovernmental Panel on Climate Change supports the thought that human-caused increases in concentrations of greenhouse gases in the atmosphere are very likely the cause of most of the temperature increases the world has experienced from the 1950s. It seems that “gross domestic product per capita and population growth were the main drivers of the increase in global emissions during the last three decades of the twentieth century”. It has also been shown that emissions from large developing countries are now growing rapidly due to their carbon-intensive industrialization, changing pattern of consumption and current population growth (Bongaarts et al. 1997). One of the most impressive aspects of the China’s economic and social development is investing in human capital. China’s assistance for higher education arena has been very impressive because a significant proportion of academics have already trained or intend to get training in their higher studies in various important disciplines in Chinese universities. If this assistance was not available to developing nations in the region, it would have very difficult to find places in the developed world’s universities. This has brought an appropriate platform to speed up economic and social development of the countries by taking China itself as a best practice. The areas and topics which are most concerned about China’s development are maintaining political integrity, prevailing focus on its rapid economic growth through new vision of development, opening up and inclusive development, placing high importance of improving business environment, high technological development, social development through improved literacy for males and females, high life expectancy, strategic plans to eradicate or minimize the urban–rural disparity, etc. However, it appears there are many areas that China can fully focus upon when the population and development is interlinked. It is always better to that the various aspect of population to be included in the national development strategies for its balanced social and economic development which can filter through all societal groups. As China’s development has been somewhat unequal at local level,13 a careful attention has to be given to spatial distribution, internal migration, urbanization, and some marginalized groups. This is because some rural and underdeveloped areas can still hamper China’s development effort and identification of the exemplary role of cities and developed regions within China can further boost the development of different regions. In this context, China has to look for various policies and measures in line with the population growth and distribution in accordance with social and economic development, resource utilization and environmental protection. More focus on reproductive health policies: It is a known fact that reproductive health and family planning played a key role in achieving the MDGs to reduce child mortality and improve maternal health. A healthy mother is the first step towards a 13

https://www.fmprc.gov.cn/ce/celt/eng/zt/zfbps/t125259.htm#1.

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healthy child.14 It has been highlighted that the eradication of extreme poverty and hunger, cannot be achieved if questions of population and reproductive health are not directly addressed. This does not mean that China does not attend to these problems but still there is a space to improve and if that happens then the world can learn some of the best practices from China because if China can improve reproductive health for its huge population why the other smaller countries cannot do it. Reproductive health programmes in China need to be continued with full government commitment within the framework of reproductive rights to reduce regional disparities in fertility rates as slowing fertility can make substantial contribution to slowing greenhouse gas emissions. Evidence suggests that much of the change in atmospheric gas concentrations is human-induced (Kaufmann and Stearn 1997; Tett et al. 1996). Human-induced contributions to CO2 emissions stem from fossil fuel use through energy consumption and industrial production activities. In addition, land-use changes such as deforestation affect the exchange of carbon dioxide between the earth and the atmosphere (Goudie and Viles 1997). Furthermore, other consumption-related activities such as paddy cultivation and livestock production appear to be responsible for greenhouse gas releases to the atmosphere, especially methane releases (Heilig 1994). It has been shown that slowing fertility can make substantial contribution to slowing greenhouse gas emissions (Bongaarts 1992). O’Neill et al. (2000) demonstrated that declines in fertility to below replacement level could reduce projected emissions in 2100 by 37% in the world. Therefore, it is quite reasonable to accept that China tends to experience increases in emissions because of the growth momentum of the population. China’s population is likely to peak in 2023, according to a study by online database company Global Demographics and analytics firm Complete Intelligence.15 The Chinese government had previously estimated that the country would hit its maximum population size in 2029. It is quite reasonable to argue that when an enormous population rapidly multiplies its per capita income, the impacts can be massive and ecologically destabilizing.16 Population Ageing and Environment: Since China has already stepped into the third stage of the epidemiological transition, it is quite obvious that majority of its population will be susceptible to non-communicable diseases with the concurrent rise in the proportion of elderly. Prevalence of some of the non-communicable diseases such as chronic lower respiratory diseases and diseases of circulatory system can be significant due to factors such as economic conditions, lifestyles, as well as environmental factors (Velkova et al. 1997). For example, exposure to dust, fumes, or gases also may contribute to chronic lower respiratory diseases (Becklake 1985). It has been claimed that inflammation and oxidative stress are major factors contributing not only in Alzheimer’s disease and Parkinson’s disease, but also in diabetes, cardiovascular disease, the metabolic syndrome, lipid disorders, obesity, asthma, and cancer (Stein et al. 2008). It is highly likely that the degenerative and man-made diseases to replace 14

https://www.unfpa.org/press/population-and-reproductive-health-key-achievement-mdgs. https://www.cnbc.com/2019/05/03/chinas-population-could-peak-in-2023-heres-why-that-mat ters.html. 16 https://www.jstor.org/stable/656133?seq=1#metadata_info_tab_contents. 15

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infectious and parasitic diseases at an increasing rate during the first 25 years in the twenty-first century. Chinese people will surely encounter an increasing burden from chronic noncommunicable diseases as the country’s population is aging rapidly. It is expected that by 2030, the burden of chronic noncommunicable diseases to rise by at least 40% in China compared to 2012, according to the report issued by Peking Union Medical College and the Chinese Aging Well Association.17 Chronic noncommunicable diseases caused nearly 80% of the deaths of old Chinese people in 2012. In 2012, majority of Chinese people aged 60 or above had suffered cerebral strokes, malignant tumors, ischaemic heart disease, diseases of the respiratory system, and diabetes. In this context, there can be fundamentally three types of morbidity: Highly fatal chronic diseases of the heart, cancer and stroke, and chronic diseases involving repeated or continued medical care such as diabetes, kidney diseases, arthritis, obesity, allergies, etc.; accidents and predominantly traffic accidents; diseases caused by stress, such as drug dependency, mental illness, peptic ulcers, suicide tendencies etc. It seems that abnormal inflammation and oxidative stress are major pathways through which numerous environmental factors are included and contribute to a diversity of chronic diseases. Numerous environmental chemicals encourage excessive oxidative stress and inflammation and contribute to the risk of neuroinflammation and neurodegeneration. As Stein and others (2008) exemplified, there is substantial evidence for air pollution to contribute for brain inflammation and the risk of Alzheimer’s-type neurodegenerative diseases. Therefore, it is quite logical to anticipate that China’s elderly people to experience such diseases if hazardous impact of environmental factors is not controlled effectively in the coming decades. In addition, the government will have to allocate a substantial funding for healthcare of the elderly as the number of elderly who will suffer from such diseases can rise due to the proportional increase in the elderly population with ever rising life expectation. Moreover, offering medical and health care facilities will be increasingly costly and complex as it will be required to deal with not only for chronic nature of the diseases but, also, the need of acquiring new ways of tackling the problems of survival and ageing.

Suggested Reading Becklake, M.R., 1985, “Chronic Airflow Limitation: Its Relationship to Work Industry Occupations,” Chest 1985, 88:608–617. Bongaarts, J. B.C., O’Neill and S.R. Gaffin, 1997, “Global Warming Policy: Population Left out in the cold,” Environment, 39(9): 40–41. Bongaarts, J., 1992, “Population Growth and Global Warming,” Population and Development Review, vol. 18(2) : 299–319. Goudie, A.; H. Viles, 1997, The Earth Transformed: An Introduction to Human Impacts on the Environment, Blackwell Publishers. 17

http://www.chinadaily.com.cn/a/201902/07/WS5c5bf3c2a3106c65c34e8538.html.

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Heilig, G.K., 1994, “The Greenhouse Gas Methane (CH4 ): Sources and Sinks, the Impact of Population Growth, Possible Interventions,” Population and Environment: A Journal of Interdisciplinary Studies, Vol. 16 (2): 109–137. Kaufmann, Robert; D. Stearn, 1997, “Evidence for Human Influence on Climate from Hemispheric Temperature Relations,” Nature, vo. 388: 39–44. O’Neill, B. C.; F. Landis MacKellar and Wolfgang Lutz, 2000, Population and Climate Change, Luxemburg, Austria: International Institute for Applied Systems Analysis. Stein, J; Schettler, T.; Rohrer, B., and Valent, M., 2008, Environmental Threats to Healthy Ageing, Greater Boston Physicians for Social Responsibility and Science and Environment Health Network, www.agehealthy.org/ccount/click.php?id=. Tett, Simon; J.B. Mitchell; David E. Parker and Myles R. Allen, 1996, “Human Influence on the Atmospheric Vertical Temperature Structure: Detection and Observations,” Science, vol. 274, Nov. 15: 1170–1173. Velkova, A., Wolleswinkel-Van Den Bosh, J.H., Mackenbach, J.P., 1997, “The East-West Life Expectancy Gap: Differences in Mortality from Conditions Amenable to Medical Intervention,” International Journal of Epidemiology, 26(1): 75–84.

Chapter 116

The Need for China’s Leadership on Delivering Global Sustainable Environmental Protection Andrew Mark Farmer

116.1 Introduction The year 2019 marks the 70th anniversary of the foundation of the People’s Republic of China. In these 70 years China has changed dramatically. In doing so, it has addressed many different challenges, but China faces many more challenges in the years ahead. This anniversary is a time to look to the future. This paper explores one issue which is important for that future: that of sustainable environmental protection. Action by China is essential not just for China to achieve sustainable environmental protection for itself, but for the world as a whole to achieve this. The changing nature of industry, technology and land-use inside China presents challenges and opportunities for the environment. China’s extensive changing interaction (economic, diplomatic, and social) with the rest of the world also presents challenges and opportunities to deliver sustainable environmental protection. Chinese leadership will be key. Achieving sustainable development requires individual actions (by individuals, businesses, governments), but also shared views (and agreements) on how to address the planet’s key problems and needs (such as those set out in the UN Sustainable Development Goals). China’s part in this is enormous, both its individual actions and its contribution to shared objectives, and what China does will determine the nature of a “shared future for mankind.” Chinese leadership can be expressed in different ways, which are in turn explored in this paper. • Leading by example: where China acts domestically that others may learn from. • Addressing impacts beyond its borders: activities by China have impacts in other countries or globally and action can be taken to address these. A. M. Farmer (B) Institute for European Environmental Policy, Brussels, Belgium e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_116

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• Trade: the central role of China in world trade has consequences for environmental sustainability. • International environmental governance: this is critical to addressing many of the world’s problems and China can support effective governance.

116.2 Leading by Example The first area for China to lead upon in relation to environmental sustainability is simply to lead by example. China has pressing environmental, social, and economic issues which are evolving as it develops. How sustainable the choices that it makes are in relation to these issues are important lessons to others around the world. China faces many environmental challenges. Perhaps most well known outside China are the extreme air pollution events in some cities, which led to the country declaring a war on pollution in 2014. However, it also has problems with solid waste management (e.g., plastics), with water pollution (e.g., from agriculture) and pressures on biodiversity. This short paper is not the place to review these challenges, but how China tackles these problems may have important lessons globally, both to present the simple message that the country considers that such problems are important, and also lessons on the measures taken and whether/how these have or have not worked (and why). It is important to stress that such lessons are not limited to the primary policies adopted by China, but how they are implemented. For example, the government has noted that while there are policies to control air pollution from different sources (such as the Atmospheric Pollution Prevention and Control Law), ensuring that the several million sources across urban and rural areas comply with these obligations is a problem. How China’s ensures compliance and the role of public participation in this has important lessons for others. China will have a particular challenge in developing its circular economy (for which legislation has recently been adopted). It has huge potential benefits for China in its use of resources. However, there are conceptual challenges as while many materials may be made circular within China, the country is a major net exporter of materials, including critical raw materials.1 Further, as waste is processed to produce end-of-waste materials (or by-products), the quality of these materials will have implications for the quality of products exported to other countries. How China examines the competing demands domestically is also an important signal to others. How it sets objectives for the environment alongside those of social and economic development, how it analyses the interactions between these and the governance systems to deliver policy integration (whether nationally, regionally, in cities, etc.) are all areas where China can lead by example.

1

European Commission, 2018, Report on critical raw materials and the circular economy.

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116.3 Addressing Impacts Beyond China’s Borders Activities within China affect the sustainability of environments beyond its borders. The most high-profile issue in this regard is the emissions of greenhouse gases (GHG) and their global impact. China now emits more GHG than any other country in the world. At present emissions continue to rise (2018 showed a 2.3% increase following relatively level years from 2014 to 16). It has adopted policies to control GHG emissions, including the announcement in 2017 of a new emissions trading system. It is also massively expanding its renewable energy generation. Some projections suggest emissions to continue to rise until 2030, while others2 suggest they will peak earlier (and before China’s commitment in the Paris Agreement). Addressing these emissions is essential to tackle the global climate emergency and doing so is critical to China demonstrating its leadership in global environmental sustainability. It is also important, however, to note that China’s relationship to global GHG emissions is not limited to emissions from the country itself. It is an important provider of finance for infrastructure projects in many countries across the world. In some cases, these are investments in renewable energy. However, in other cases they are investments in fossil fuel plants. It is estimated3 that of all the coal-fired plants under development outside of China, one third (amounting to 102 GW) are being financially supported by Chinese institutions or businesses. There is, therefore, a need for China to review its financing policies to ensure it can be a leader in global sustainability. Of course, this applies to activities beyond the energy sector, such as the financing of projects which may affect biodiversity protection. An important example of such a policy is the Belt and Road Ecological and Environmental Cooperation Plan,4 affecting co-operation with a wide range of countries. However, while this plan is important in stressing “ecological civilization and green development,” it is important that these principles are applied in practice as development activities take place. Another critical area of global concern is the presence of plastic in the ocean, with its impacts on ecosystems and, potentially, on people. Such plastic enters the ocean in many ways, but a key pathway is leakage from land, such as via rivers or coastal communities. Even with its improving waste management practices and infrastructure, it is estimated that 1.5–3.5 million tonnes of plastic enter the ocean each year from the coast of China.5 Tackling plastic pollution leakage into rivers and the ocean is important not only for China to protect its own environment (and the economic activities that depend upon it), but also to show leadership on this pressing global problem. 2

Haikun Wang et al., 2019, China’s CO2 peak before 2030 implied from characteristics and growth of cities, Nature Sustainability. https://doi.org/10.1038/s41893-019-0339-6. 3 https://climateactiontracker.org/countries/china/. 4 Ministry of Ecology and Environment 2017, “The Belt and Road Ecological and Environmental Cooperation Plan,” http://english.mee.gov.cn/Resources/Policies/policies/Frameworkp1/201706/ t20170628_416869.shtml. 5 J. R. Jambeck, et al. 2015, “Plastic waste inputs from land into the ocean,” Science 347, 768–771.

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A further example of the impact of Chinese activities beyond its borders is that of fisheries. China has sought to control fisheries activities, but the evidence is that objectives in this regard are not being met, indicating a problem of ensuring compliance (such as the effectiveness of inspections). The number of Chinese fishing vessels has risen steeply in recent decades and their ability to extract fish has also increased. So, between 1988 and 2015 the number of vessels has doubled, but the catch size has tripled to over 13 million tonnes in 2015.6 Fishing takes place both in Chinese waters and in international waters. The increasing demand for seafood by the Chinese population in the future will continue to put pressure of fisheries activities. Of course, vessels from other countries around the world also apply significant pressure on fisheries, but it is important for China to continue to work towards sustainable fisheries practices and to support sustainable fishery practices by others in appropriate international fora.

116.4 Trade Trade has large consequences for environmental sustainability. China accounts for a large amount of global trade, from a wide range of export and import of raw materials to an export of an increasing range of manufactured products, from vehicles to electric goods and clothing. Many countries have requirements to be applied to the products placed on sale in their markets. These may reflect issues of health and safety. Many reflect issues of environmental protection, such as restrictions on toxic contaminants and provisions to support re-use and/or recycling of materials to support circular economic systems. Goods manufactured in China need to meet the requirements of the markets they are shipped to. China can support leadership in this area both by developing its own product requirements to protect the health and the environment within China and to ensure that these are required of the goods that it manufactures and ships abroad to contribute to sustainable environmental protection globally. Trade is not just the movement of raw materials, goods, and capital. It also includes the movement of waste and China’s decisions regarding this have had significant consequences. China was a major destination for plastic waste, for example. It has been estimated that from 1992, two thirds of the world’s plastic waste ended up in China.7 This created significant challenges within China, and it started introducing stricter waste policies, from 2010, followed in 2013 by the “Green Fence” and a ban in 2018 on 24 types of recyclables and solid waste entering the country, expanded to 32 categories of waste in January 2019. The ban has had huge consequences for those countries which exported the waste (such as in Europe and neighbouring East Asia). It has certainly helped to develop new policies to manage plastics in the EU,8 6

http://d.old.wanfangdata.com.cn/Periodical/zhongguosc201804015. Amy L. Brooks, Shunli Wang and Jenna R. Jambeck, “The Chinese import ban and its impact on global plastic waste trade,” Science Advances, Vol. 4, no. 6. https://doi.org/10.1126/sciadv.aat0131. 8 European Commission, “A European Strategy for Plastics in a Circular Economy,” 2018. 7

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which previously sent around 20% of the plastic waste it collected to China. It has also posed risks to other countries, such as in Southeast Asia, which may become new destinations for plastic waste.9 This is not a criticism of China’s policy; far from it. The policy has been necessary to protect China’s environment and people and it has helped to focus policy development in waste-exporting countries. It has had a positive impact. However, it would be helpful if China were to support other countries at risk of receiving such waste, such as in lessons learned within China and policy and infrastructure changes that have occurred.

116.5 Contributing to International Governance International environmental governance takes a wide variety of forms, and it is important for China to lead in supporting such governance mechanisms. These range of global structures such as UNEP, GEF, UNSCD, Agenda 2030 and agreements reached such as the UNFCC and, indeed, China has stated its commitment to multilateralism and recently stated that it “has always been an active participant in and defender of the multilateral efforts to address climate change”.10 In all cases of global governance, not only is it important for China to continue to play its part (meeting its share of commitments, for example), it is increasingly important for China to lead in the development of these governance mechanisms, helping them to evolve to meet the changing environmental and social challenges facing the world. China’s position reached during the 2018 EU-China summit on the ocean, for example, is positive in this regard. The joint Declaration11 stated that “The two sides share the objective of maintaining, strengthening and, as appropriate, creating ocean governance mechanisms and structures, including in the area of fisheries, that keep the oceans clean, healthy, productive, and safe whilst creating the best possible investment climate that is conducive to enabling sustainable use by present and future generations, including job creation and sustainable economic growth,” and that “Cooperation to improve global ocean governance, such as for the conservation and sustainable use of oceans, their resources and ecosystem services, including to elaborate the text of an international legally binding instrument under UNCLOS on the conservation and sustainable use of marine biological diversity of areas beyond national jurisdiction.” Such co-operation will be important for China to contribute

9

Politico 2018, China’s trash ban forces Europe to confront its waste problem, https://www.pol itico.eu/article/europe-recycling-china-trash-ban-forces-europe-to-confront-its-wasteproblem/. 10 Ministry of Ecology and Environment 2019, “UN Climate Action Summit: China’s Position and Action,” http://english.mee.gov.cn/News_service/news_release/201909/t20190917_734051.shtml. 11 2018 EU-China Summit, Declaration on the Establishment of a Blue Partnership for the Oceans: Towards better Ocean Governance, Sustainable Fisheries and a Thriving Maritime Economy between the European Union and the People’s Republic of China.

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to addressing the challenges set out in the recent IPCC report on the Ocean and Cryosphere in a Changing Climate.12 Alongside issues of global governance are those of regional governance, in particular the importance of multilateral environmental agreements (MEAs) and similar arrangements. For example, China has forty major transboundary watercourses with neighbouring countries,13 such as the Mekong, Brahmaputra, Ili, Irtysh, and Amur rivers. In most cases China is the upstream country and, therefore, use of water by China and discharge of pollutants into the water courses may affect downstream users. The transboundary governance of these water courses varies from formal river commissions to informal communications. As water issues increase in importance (and China’s water needs evolve), its relationship with its neighbours on transboundary water course will have important consequences for China’s relationships with its neighbouring states.14 It is important for China to work constructively to identify the environmental, social, and economy challenges for these catchments and to develop solutions benefiting the whole catchment, ensuring a sustainable environment in the longer-term. Further, it is important for China to continue constructive engagement with others developing environmental solutions across a range of subjects, such as the series of EU-China Ministerial Dialogues on Environment Policy, which has taken place since 2003, as well as the EU-China Energy Dialogues. These set out joint commitments and exploration of issues ranging from the 2030 Agenda for Sustainable Development, common priorities for pollution control, circular economy, green finance, energy efficiency, renewable energy, and more.

116.6 Conclusions In conclusion, it is important to stress that it is not simply the case that China could take the lead in helping to deliver environmental sustainability, but that it is essential for China to take the lead or global environmental sustainability will not be achieved. Leadership will be required across many sections of society in China. Of course, there needs to be commitment at the highest levels. But all need to play their own parts. This means that such leadership cannot simply be left to the Ministry of Ecology and Environment (important though leadership from that Ministry is). Other Ministries need to lead as well: on energy, transport, agriculture, fisheries, etc. Further, environmental sustainability will not be delivered simply by leadership in Beijing, it will

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IPCC 2019, Special Report on the Ocean and Cryosphere in a Changing Climate. https://www. ipcc.ch/srocc/download-report/. 13 Lei Xie and Shaofeng Jia 2017, “China’s International Transboundary Rivers Politics,” Security and Diplomacy of Shared Water Resources, Routledge, p. 222. 14 Hongzhou Zhang and Mingjiang Li 2017, China and Transboundary Water Politics in Asia, Routledge, p. 242.

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require leadership at all governance levels. This is a major challenge to achieve, but it is essential. It would, therefore, be useful for China to develop a strategy or similar statement of its vision for leadership in global environmental sustainability covering different aspects, as covered earlier in this paper. This may state what China aims to deliver domestically, what it aims to deliver in its actions and relations with other countries and its vision for contributing to global environmental governance. To be effective, it would also need to identify which Chinese institutions need to take specific steps to help deliver this strategy. The 70th anniversary of the founding of the People’s Republic of China is a major milestone in the development of the country. It is highly appropriate for China to explore how it can contribute to the “shared future for mankind.” Without a sustainable environment, there will be little future for mankind and Chinese leadership should help deliver a sustainable, shared future for all.

Chapter 117

On Behalf of the Comrade Citizen Gerard Alphonso Jean Jacques

117.1 Introduction The United Nations Development Programme created the Human Development Index that promotes a multidimensional perspective on modern “human development.” It moves away from a purely rational economic perspective that values interest rates, economic returns, and the language of economic and infrastructural success and instead it recognizes at least three elements of human development, viz. “good” health, informed and educated citizens (through years of formal education), and a “decent” standard of living, the latter referring to the economic premium. The Index has its challenges and can hardly be considered the most reliable measure for analyzing human development, e.g., years of formal education in one jurisdiction may not necessarily lead to an improvement in one’s life, additionally, impressive national economic growth figures do not in any way logically suggest an improved life for most citizens. In fact, history has shown that even in advanced industrialized countries, there exist high disparities between rich and poor and educated and poor. Wealth generation, therefore, is not by itself, an indicator of “development.” The Index, however, recognizes that the discourse about human development must move away from the traditional linear conceptualization of development as a structural feature and it must absolutely consider agential factors. It is the view of this essay that human development is first of all a process. It takes place over time, and it is shaped by agential action (or inaction) and spatial phenomena. The individual actor, therefore, is central to development, not the multinational corporation. In fact, the actions of the corporation must be determined by the

G. A. J. Jacques (B) Interministerial Coordination and Policy Monitoring of Government of Dominica, Roseau, Dominica e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_117

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needs and aspirations of the individual actor because at the core of human development is the human, not impressive physical structures or hefty reserves in the bank, sensu stricto; these are outputs of the process that, in turn, influence agential behavior. This discussion on the concept of human development is key to our discussion here because it raises another concept, sustainable development. If agential action is at the core of human development, the responsibility for converting physical resources into wealth and other structures that can serve Man is heavily placed on the actor such that his actions must be constrained so that all actors after him can also participate in the process. To do otherwise is to thwart the process and perpetuate an existential threat to the survival of each actor. The concept of human development is therefore not only a process that has at its core agential action and attributes but also is constrained and facilitated by structural conditions. This observation has already been articulated by the Brundtland Report of 1987 as quoted above in the opening salvo to this essay.

117.2 Dislocation The problem is, in the process of seeking to convert resources into outputs that can benefit himself (the masculine form is used here in its generic sense), the actor creates structures that actually cause a dislocation of the self (Giddens, 1991), alienating the individual from the values that he has learnt and from his fellowman and developing perverse sub-cultures that manifest themselves in various forms of human depravation and degeneration. One category of outputs of the process of modern development is, consequently, islands of disillusioned second-class citizens who may embrace desperate measures of survival, risking hazardous crossings across borders, committing to a life of criminal activity, submitting themselves to substance abuse, etc. This condition, the “tribulation of the self” (Giddens, 1991) is often characterized by “feelings of restlessness, foreboding” (181), hopelessness, and desperation. The recent trends in human migration, for example, suggest that the process of development is heavily burdened in some jurisdictions where economic wealth has not resulted in an improved situation for actors and where these actors have found themselves in a desperate situation to improve their condition. The result has been a rise in the number of broken families in the societies of origin, a rise in reported cases of modern slavery, environmental degradation as societies mobilize in what appears to be a race to deplete physical resources to accommodate the increasing and changing appetites of their populations, the spatial dispersion of societies that once shared a common identity, and a loss of identity for stateless citizens. Additionally, the process of modern human development has often transformed the actor into a modern slave to the structures that he has created, notably technological structures, alienating him from social interaction and destroying the glue that binds actors together and fosters the growth of the individual and of societies (Putnam, 2000). The process of human development therefore, as we have known it, has succeeded in producing outputs that have brought much satisfaction to many but have also resulted in tribulations of the self, which manifest themselves in ways that threaten the very structures that

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the actor has created for his enjoyment. Let us advance this discussion by examining an option for the re-insertion of Comrade Citizen at the center of the policy and planning.

117.3 Replanting This observation forces us, at the minimum, to ruminate on the type of state- citizen relationship that is needed at the local level and national level if we are to secure the process of human development so that it benefits current and future generations, united by common challenges and a shared future. Securing our gains in a postmodernization era requires a replanting and a re-engineering of the individual. We have already established that at the heart of development is the individual actor; any approach to institutional re-configuration for a common future must begin to consider the place of Man, the ordinary citizen, the individual actor. This is the main point of focus of this essay, that it is through agential action/inaction that development must be sustained and therefore it is at this level that academics and political actors must focus their efforts. Certainly, this is not to nullify the potential effects of institutions. However, institution-building is context-specific and history has taught that energies spent in institution-building that ignore this critical link between human context and institution are wasted. The record of the evolution of the Integrity in Public Office Act (2003) in Dominica (Jean-Jacques, 2016) as well as the development of similar anti-corruption agencies, especially in developing states, is a clear example of this reality. The call therefore is not simply for the construction of relevant institutions but of institutions that are compatible with the varying contexts that form the commune, i.e., institutions that are sensitive to the varying needs and aspirations of individual residents. In seeking to re-plant the individual citizen so that he retrieves himself and participates fully in the development process, conscious that his actions/inaction today have repercussions for tomorrow, we can revert to the Maximin Principle of Rawls (1999). Rawls proposes two principles of justice: First: each person is to have an equal right to the most extensive scheme of equal basic liberties compatible with a similar scheme of liberties for others. Second: social and economic inequalities are to be arranged so that they are both (a) reasonably expected to be to everyone’s advantage, and (b) attached to positions and offices open to all (1971:53).

It is the second that is of relevance here; in particular, it is the position of significance that Rawls places on the condition of the disadvantaged, the less fortunate, and the alienated that inspires our search for a path to re-centering the individual actor in the process of development. From this perspective, any policy initiative by the state or any action/inaction by a corporation must be guided by an understanding of the impact of these on the least advantaged in our societies. The logic being that development that benefits even the least advantaged would be more just and more sustainable because it would have considered the state of all categories of actors in a

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society, even those yet to be born. This approach to development reaches at the core of state-society relations because it raises issues of distributive and redistributive policies to facilitate development. In a world of fast-paced technological advancements and the attendant challenges that they impose upon societies, the “tribulation of the self” can easily go unheeded. Technological giants design and propagate their technology using glittery ads and predatorial communication campaigns to sedate and recruit their annual supply of unsuspecting followers and customers, irrespective of the ramifications of these for the customers. There appears to be little concern for the deleterious effects of these advanced technologies on social capital. In fact, we are now moving at breakneck speed on to advanced robots that will replace humans in some areas that we have always considered sacred: our kitchen and our bedroom. Additionally, pharmaceutical companies are expanding their portfolio of products to match the growing pace of consumer purchasing power. These, like modern robots, have improved lives. However, they are often sold at costs that most dwellers of the average inner city neighborhood, especially in a developing state, can barely afford. These citizens consequently languish in their illness or resort to illegal activities in order to survive. We can also address a third area in which the state has appeared either reticent or unwilling to act to protect the individual actor: farming. Farming is one industry across the globe that political leaders love because it provides food and employment for many. Yet, most countries can be said to have policies that do not truly support the farmer. When the Trump administration imposed a sleuth of tariffs on the importation of Chinese produce and goods and the Chinese retaliated, it was the American farmer who first felt the backlash of the American sanctions through a loss of access to the Chinese market. Closer to home, notwithstanding significant investments in improving road access and providing other modes of inputs to farmers, many of the latter still operate on small family holdings and can only enjoy moderate improvements in the sale of their crops. To compound the situation of food production, the use of farm practices that are harmful to the environment and to humans has seemingly increased as persons seek to improve their output and boost their economic earnings. The economic paradigm dominates, and the sustainability of human life remains in peril. Clearly, the development of structural features has not necessarily resulted in the development of the agential capabilities to makes those structures work for all actors. In this post-modern age, the roles for state have changed, its responsibilities have become deeper, demands of state have increased and wherever it interacts with the supra-state, its responsibility and accountability to citizens have increased. More are clamoring for the protection and material support of the state. It must use its power to reign in actors who seek to operate with scant regard for the interests and the needs of the less advantaged and it must also expand its social safety net for the many who find that the “cost of living” has dramatically surpassed their ability to cope. What the individual actor needs is aggressive intervention to protect the rights and interests of every individual, not solely the corporations whom they offer handsome concessions. There is some regulation of telecommunications, but the cost of communicating is

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still prohibitive enough that many school children have to visit Internet cafes or their neighbors to conduct research online. Of course, this deployment of resources must not be solely directed at nonstate actors. While working to help Comrade Citizen to stay afloat in the postmodern era, the state itself must seek to improve its relationship with the citizen by providing opportunities for education and training that will liberate the individual from the enslavement of technology, the bondage of pharmaceutical companies, and the burden of cycles of poverty and/or crime. These opportunities can manifest themselves through formal institutions of learning at various levels. The recently created National Institute for Global Strategy (NIGS), under the Chinese Academy of Social Sciences (CASS), may be a step in the right direction because it seems keen on being sensitized to the development issues and solutions for a sustainable future from the perspective of constituents across the globe. It aspires to a re-configuration of the spatial interaction among nations, recognizing unique identities and culture, but also embracing the commonalities among us. This will require a fundamental transformation in the modes of conceptualizing power relations, state-citizen relations, and a shared future. However, the NIGS is at a macro level. What is proposed here is statecitizenry engagement at a micro level. Individuals may not readily wish to attend formal classes. Many may get caught up in the daily vagaries of life and attending classes would simply be another burden. These individuals have to be met and incentivized to participate in education and training programmes. The failure of the state to take on such an aggressive approach to the education of its citizens will mean a prolonged disconnection between the individual and the structures of development that he sees emerging around him, whether these are in artificial intelligence, elegant post-modern skyscrapers, pharmaceutical, or internationally inspired legislation. In summary, the common and traditional approaches to development with their biases towards structures rather than humans are in fact antithetical to human development because they favor the economic premium and seem to have least focus. The development of structures is only useful if those structures can meaningfully improve the quality of life of all citizens, beginning from the most disadvantaged among us. The advancements in telecommunications will have little relevance to our survival as a specie if the marginalized rural poor cannot use them to produce healthy food, for example.

117.4 Conclusion This discussion of the need to re-focus policy and planning on the individual citizen, on Comrade Citizen, has much significance for all, consequently: policymakers, public functionaries, academics, entrepreneurs, etc. It is especially significant for the CASS, which houses one of China’s most prestigious think tanks, the NIGS, because the Chinese government has made significant strides in positioning itself as the new leader of the post-modern world. If China’s leadership is to be exemplary

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and sustained in the face of growing challenges to our existence, it could do well to heed the call to re-center the “ordinary” Comrade Citizen in its development agenda. It is here that the Dominican example can be of help to China’s leadership. After experiencing the near complete devastation of its social and economic life in 2017 by the unearthly Hurricane Maria, the government and people of Dominica laid out the path for its resurrection and resurgence in a document entitled The National Resilience Development Strategy: Dominica 2030. The central vision of this roadmap is human survival, “to be the first climate-resilient nation in the world.” For Dominica, this has meant a calculated and systemic effort to ensure that basic health services are “climate proof” and accessible to all even during an adverse event; that through an aggressive housing campaign the houses, especially of the vulnerable, are “climateproof”; that roadways, even backstreets in little hamlets and villages are “climateproof”; that our institutions are flexible and spatially organized so that they can reach and serve the vulnerable within one hour of the notice of an impending event and within 30 min of such an event (in fact, every public warning of an impending storm is accompanied by a request to shelter and protect the elderly, the infirmed, and persons who for various reasons are disadvantaged); etc. For us, these are early days in the journey towards resilience, using our model of development, however, we believe in its success because we are driven by an understanding of the existential threat to our future and, equally critical, we recognize that the nation cannot be resilient if large segments of our population are not. The Peoples’ Republic of China is celebrating the 70th year of its founding, 70 years since it began a process of development. It has enjoyed many successes and is now reinforcing its place in the global community as a leader by aspiring to construct a community, a global community, with shared values. The government and people of the Commonwealth of Dominica have enjoyed strong fraternal relations with the Government and people of the PRC. We salute them on this laudable mission. As Prime Minister Hon. Skerrit has previously stated, China can count on Dominica’s support. However, our Chinese brothers and sisters would do well to be cautious in the process so that we do not re-establish the previous models of development that have failed the citizens. No effort must be spared in centering the least advantaged citizen at the heart of any institution or effort towards that mission. As indicated above, the NIGS is a progressive concept, but it too will be assessed within the framework of the thrust of this essay, that is, the extent to which its deliberations and actions include the concerns and needs and ideas of the least advantaged and the extent to which it aims to improve the conditions of these demographics as we pursue the global community. This has been a petition on behalf of Comrade Citizen.

Suggested Reading Giddens, A., 1991. Modernity and Self-Identity. Self and Society in the Late Modern Age, Stanford (CA), Stanford University Press.

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Gilpin, Robert, and Jean M. Gilpin. 2001. Global Political Economy: Understanding the International Economic Order. Princeton, N.J.: Princeton University Press. Government of Dominica. 2018. The National Resilience Development Strategy - Dominica 2030. Roseau, Dominica: http://www.dominica.gov.dm/government-publications/national-dev elopment-strategies/the-national-resilience-development-strategy-dominica-2030 Jean-Jacques, Gerard. 2016. “Power Relations and Good Governance: A Social Network Analysis of the Evolution of the Integrity in Public Office Act in the Commonwealth of Dominica.” PhD diss., Université Laval. Putnam, R. D., 2000. Bowling Alone: The Collapse and Revival of American Community, New York, Simon and Schuster Rawls, John. 1999. A Theory of Justice. Revised Edition. Cambridge, Mass: Belknap Press of Harvard University Press. World Commission on Environment and Development. 1987. Our Common Future. Oxford: Oxford University Press.

Chapter 118

Transparency Facilitates Financial Markets Marty Schenker

On behalf of Bloomberg, I would like to thank the organizers for your invitation to discuss the extraordinary development of China over the past 70 years. China’s growth has truly been remarkable. China’s economy has moved from poverty to moderate prosperity, from isolation to a position as the world’s biggest exporter, from emergence in innovation to its leading edge. Average incomes have risen from $721 a year in 1980 to $16,097 in 2018, growth that has lifted millions out of poverty. The next 70 years can be just as bright. Continued reform and opening of the Chinese economy, the adoption of new technologies and the introduction of more market forces will help further improve living standards. But, of course, along the way there will also be plenty of challenges. Every country’s circumstances are unique. There has never in history been a country with as large a population as China’s that’s undergone as rapid an economic transformation. As China has opened its borders to international participation, Bloomberg has been on the ground to witness the opening and transformation. We began in the Chinese mainland about 20 years ago with a single journalist based in Shanghai. Today, Bloomberg employs a few hundred professional people in Beijing and Shanghai, working for various departments, including data, sales, and research and editorial. Our newsroom staff in those two cities has also expanded significantly. The scope of our coverage has changed as well. What started with one reporter covering all of China has become a much more focused and specialized team that’s able to provide a more granular and holistic view of this country’s various markets, industries, and its many opportunities and challenges. The pace and size of China’s financial markets really requires on the ground resources to uncover and report, M. Schenker (B) Bloomberg News, New York, United States e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_118

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so global investors can understand the nuances of investing in China and its many complex challenges. Let me give you an example. The electrification of the automobile is a trend that is posing severe challenges for carmakers and energy companies around the world, but one that is also creating tremendous opportunities. Bloomberg has a global team of journalists that has made electric cars a focus of coverage, including in China where we have multiple colleagues tracking this industry. In addition, BloombergNEF has a team of analysts in Beijing dedicated to understanding and forecasting everything from demand for new-energy vehicles to price points for batteries. As a result, Bloomberg was first to point out how China’s massive battery- production capacity would help dramatically lower the price of electric vehicles, making them affordable to a much larger percentage of consumers around the world. We have also been first to identify and to profile some of the cutting-edge Chinese startups that are reshaping the auto industry with their electric vehicles. Bloomberg’s ability to use data and objective reporting to enlighten markets and policies did not happen by accident. In 1802, Thomas Jefferson, one of the Founding Fathers of the American system of government, wrote: “We might hope to see the finances of the Union as clear and intelligible as a merchant’s books, so that every member of Congress and every man of any mind in the Union should be able to comprehend them, to investigate abuses, and consequently to control them.” Jefferson’s comments could well serve as a guiding principle behind the creation by Michael Bloomberg of his eponymous financial industry service 200 years later. From the beginning, Michael Bloomberg understood the truth that shining a light on the dark places of finance creates a variety of virtuous outcomes. Add the power and speed of computers and you have an extraordinarily powerful tool for making investments. In addition, the growth we have had in China did not happen just because Bloomberg wanted it to. It is a reflection of the changing relationship China has with global markets. Bloomberg today is the global leader in financial data, information, and analytics. Our customers around the world use the Bloomberg Terminal’s wealth of data and news as a window to understand China. And every day, through their decisions about what they read and watch, those people tell us that they want to better understand China. China has made solid progress in the liberalization of financial markets. The latest milestone is the inclusion of Chinese government and policy bank bonds to the Bloomberg Barclays’ Global Aggregate Index. JP Morgan has also announced a plan to start a phased inclusion of Chinese government bonds into its benchmark index next February. More recently, China has set timetables to end foreign financial ownership caps. All of these things are good news. We at Bloomberg have learned time and again that efficient financial markets are a building block of sustainable development and that they require transparency. Bloomberg, in all its forms, provides that transparency to financial markets.

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As China continues to accelerate market opening up and integration with global markets, enhancing transparency and communication will become even more important. As foreign investors move in, they will want to see more transparency on policy and data. Without it, they will be cautious, stay out, or demand a larger risk premium. Transparency comes in many forms. Here are two that Bloomberg has identified as integral to our standing as an essential resource for the global financial and business community: The first is transparency on policy. That doesn’t mean policymakers sharing all their internal debates, but it does mean providing clarity to the markets, many times through the financial press, on what is actually going on. The second is transparency of data. Economic and corporate data have to be comprehensive, timely, and most important, accurate. The more information that markets have, the more efficient and effective they are at allocating resources. Likewise, as the Chinese economy continues to open, the more information that’s available, the more smoothly China’s integration with global markets will go. As Bloomberg Chairman Peter Grauer said recently at the China Development Forum, our company has “learned that open, transparent markets provide the best support for economies against instability and financial shocks.” “Ultimately,” he said, “the shift in financing toward more diversified funding sources, a greater role of open markets and clear-headed assessment of risks and returns can drive more efficient capital allocation.” Our experience in the U.S. and around the world is that transparency in the form of an objective and data-driven press is an essential underpinning of trustworthy markets. The pursuit of objectivity and transparency is one Bloomberg has undertaken every day since our company’s founding in 1981. During that time, we’ve also had the privilege of observing many changes in how information is distributed and some of the issues that have arisen. I wanted to share two noteworthy examples from our experience. The first is about the fairness of information disclosures. In the 1990s, Bloomberg News used real-time and historical data to track and write about unusual movements in stock prices in companies for which there was no apparent news to cause the price movements. Eventually we learned that these companies were giving analysts and investors access to material information on a selective basis, including briefings by the chief executive. The Securities and Exchange Commission eventually responded with Regulation FD, or Fair Disclosure, which stipulated that all companies must make material information available equally to all shareholders. The second is about the fine balance between ensuring market stability and the importance of transparency. In 2011, Bloomberg News published a story and spreadsheet detailing $1.2 trillion in undisclosed loans that the U.S. Federal Reserve gave to financial institutions during the 2008–2009 financial crisis. The data that drove that story was only turned over to us after we won a lawsuit filed against the Federal Reserve. In our view, providing information about these loans was not only important because it gave transparency to taxpayers, but also because it would

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increase our understanding of the crisis and its aftermath, and possibly help prevent a reoccurrence. China has already made strides in increasing transparency, and we applaud the ongoing efforts of policy makers to encourage even greater information disclosures. Timely disclosure of information, with clear road-maps and timelines, helps build market confidence and allows international businesses to plan for the future. As this country continues to grow and its impact on the world becomes ever greater, the need for communication and transparency will only increase. Data and information that are timely and trusted will be integral to a brighter economic future for China and also the world at large.

Chapter 119

China’s Way to an “Ecological Civilization” Cassio Luiselli Fernández

…green waters and clear mountains… are golden and silver mountains and waters. — Xi Jinping on Ecological Civilization.

The astonishing rise of China in world affairs is clearly the leading global issue of our times. It shifted the center of gravity of the world’s economy towards the Northeast of Asia. A vast zone where China is by far the largest economy as well as the paramount political and military force. A region very much populated and with strong economies (besides China, Japan and South Korea) but devoid of critical natural resources and fossil energy. In any case the global balance of power now has to acknowledge the might and influence of China and its region all over the world. In spite of its strength and dynamism, so far it has been a remarkable peaceful ascent. For sure, there are tensions, conflicts and contradictions; but no major confrontation has taken place for decades because the Chinese new world presence and strength. It has triggered an intense competition with the USA in trade matters, but still it has been managed through talks and negotiations. For instance, the new ambitious Chinese endeavor of the Belt and Road Initiative, known for its acronym BRI, entails a major geopolitical reconfiguration of Eurasia, with an enormous potential for world development. But so far it has received a very enthusiastic reception from many countries eager to participate in it instead of opposing it, even in faraway places like South America. Almost no region of the world has been left untouched by the Chinese ascent. Latin America, especially South America, through the massive exports of commodities has changed its economic landscape; in Africa something similar has occurred and Chinese investment in infrastructure there has been very transformative and remarkable.

C. L. Fernández (B) National University of Mexico, Mexico City, Mexico e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_119

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So far then, it’s quite significant the success of the “Peaceful Ascent” doctrine of China. Nevertheless, this dramatic change has had major internal impacts on China and has created some serious dilemmas. Some of them are only internal in scope and impact, like the demographic, urban and internal migration tensions, or the pollution of air, soil, and water bodies. But there are other dilemmas that have great implications not only for China, but for the world as a whole. This is because the sheer size of China´s population and economy. Paramount among these “global dilemmas” are the issues of climate change (global warming) and, very much related, the unsustainability of the present pattern of production and consumption of the global economy. There will be not a solution to either of these dilemmas without China´s full participation. In this regard, the Chinese proposed concept of “Ecological Civilization” has a remarkable global importance. There will not be such an ecological civilization (EC) if it is not global. No matter how big or powerful a county is, the very nature of these events requires a global, comprehensive approach and commitment. This is the reason why in this short “paper statement,” China has now the strength to lead these efforts globally in cooperation with many other countries and international and multilateral organizations. Indeed, if the rise of China is the most profound economic and political phenomenon of our times, the other, not less dramatic is, by far, the dramatic warming of the world due to climate change. This can only be solved if the whole world works to a low or a no carbon economy: this would be the gist of a new, world “ecological civilization.” Let us briefly discuss the Chinese concept of this Ecological Civilization (EC). The concept was first put forward by former President Hu Jintao in 2007 (shengtai wenming 生态文明). And since then, it has attracted an enormous amount of academic and political interest. By the year 2012 the Chinese Communist Party (CCP) elevated it as a paramount objective. Since 2013 President Xi Jinping took it in earnest and was considered a core element of his view of a “Socialism with Chinese Characteristic for a New Era”. Therefore, it was no surprise that in 2018 it was also ratified in the Constitution of the PRC. Somewhat it was considered the logical evolutionary step after the agricultural and industrial civilizations. That is: now it’s the time to build a “Socialist Ecological Civilization Construction with Chinese Characteristics.” Of course, this is a strict Chinese social construct, but bodes very well for a new global order away from carbon, fossil fuels and a wasteful consumption economy. Thus, EC provides a new vision of development that anticipates a new global energy and ecological transition. The present global environmental picture remains quite bleak. The pollution and depletion of resources, the loss of biodiversity and widespread species extinctions grow unchecked. Emissions of GHG are rising unabated without firm commitments from most countries. A renewed role of China, framed in the EC context, looks more urgent than ever given that the Trump administration is pulling out the United States of climate and environmental governance. With regard to climate change, we must bear in mind that fresh data keeps getting more and more negative as reported by the IPCC and other reliable academic and

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scientific sources.1 Indeed, the Intergovernmental Panel on Climate Change (IPCC) is the United Nations body for assessing the science related to climate change2 and the related UN Climate Action Summit 2019 have produced very worrying set of data and models with regards to warming and the emissions threshold not to cross if we really want to avoid unmanageable consequences. In fact, global emissions are reaching record levels and with no clear signs of peaking. The last four years were by far the hottest on record, and winter temperatures in the Arctic have risen by 3 °C since 1990. As we can see from multiple sources, sea levels are rising, coral reefs are dying, and we are seeing a life-threatening impact of climate change on health, through air pollution and very severe heat waves. Risks to food security are already present in several countries.3 So, the impacts of climate change are being felt everywhere and are having very real consequences on people’s lives. Climate change is disrupting national economies, costing us dearly today and it will cost even more tomorrow. But there is a growing recognition that affordable, scalable solutions are available now that will enable us all to leapfrog to cleaner, more resilient economies. The ambitious yet pragmatic Paris Agreement (2015) is a very useful roadmap to overcome the worst of climate change for the next decades. There is still some time left, perhaps ten to twelve years, to reduce global average temperatures to no more than the now accepted range of 1.5 °–2.0 °above preindustrial levels. But the Paris Agreement will be meaningless without leadership and decisive action. China alone is responsible for an astounding 26.8% of the world’s total carbon dioxide (CO2) emissions (and combined with the U.S. an impressive 43%). Being the most populous country and a heavy user of coal, its renewed role in the forging of an EC is crucially important: If it can meet its huge potential for emission reduction, it will be an epochal change in the efforts to tackle global climate change. So far, we have reasons for optimism. In spite of some recent setbacks, the government has seriously engaged in reducing the “coal intensity” index of its economy. In a parallel way, they are combining this reduction on coal consumption with measures to improve air quality and limit overall GHG emissions the signs have been good so far. But there is not much room nor time left for any relapse. The carbon market, the government’s primary climate-action plan, has to keep growing to reduce carbon consumption: China still consumes as much coal as the rest of the world combined (and accordingly, emits more carbon than any other country). But it has shown resolve to change the wrong environmental course. The success of their “eco-civilization” campaign is for real and in everyone’s interest. We must salute them, especially when Washington remains inactive and reluctant to assume environmental action.

1

Wallace-Wells, David (2019), “the Uninhabitable Earth: Life after warming,” Jim Duggan Books, New York. 2 https://www.ipcc.ch/sr15/chapter/spm/. 3 https://www.un.org/en/climatechange/un-climate-summit-2019.shtml.

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The challenges to China EC will be compounded, at least in the short and medium term by the challenges posed by its deliberate and vigorous policy to induce massive urbanization. For all these reasons we must applaud President Xi’s defense of the Paris Agreement, supported by deeds such as a very ambitious plans to invest in clean energy, green finance and disincentives for carbon. As well as an energetic policy of energy transformation or transition. China should not afford to lose momentum in its efforts to create a low carbon internal economy and induce one abroad. To achieve a gradual transition towards an EC, China is relying on a mix of market forces and command and control standard measures but let us remind ourselves that they are embedded on a vision of a “market socialism.” That is a model unique to China or, rather, as it’s being named, a model of “market socialism with Chinese characteristics.” It’s a model that attempts to harness the market forces with a strong state regulation and social leadership over these market mechanisms. It’s a model with strong centralized political features and dirigisme philosophy, not very different form the prior Korean, Japanese, or even French models of development. It’s worth bearing in mind that this Chinese “model” has produced the most rapid era of economic growth and employment creation the world has seen in at least a century.4 Over a period of a little more than 30 years it has lifted out of poverty hundreds of millions of people and created a vast middle class. Something never seen before. Now the big challenge is to achieve a second transition to a cleaner, leaner, and sustainable economy. It will largely depend on how the state will be able to harness the market forces toward environmental precisely defined goals. In other words, how much a free role to the market and how much to the state. And how both of them interact with the largest corpus of society as a whole. In this regard, we should not forget the idea of the “Chinese dream”, associated with Xi Jinping, the “Chinese Dream” is about Chinese prosperity, collective effort, socialism, and national glory. Xi Jinping refers to the dream as a form of national rejuvenation. “The construction of the ecological civilization is the power in the present and the advantages in the future.” “To move towards a new era of ecological civilization and to build a beautiful China are an important part of realizing the Chinese Dream of the great revival of the Chinese nation”.5 Indeed, the enormous economic and material expansion of China’s economy has had a very big environmental impact. China has worked very hard to overcome this situation. For one, air pollution is a very serious problem in most Chinese cities, this pollution extends also to soil and many water bodies, especially rivers. This, besides degrading many ecosystems, poses serious health risks and diminishes the overall quality of life of the population. But besides, this, as we already mentioned, China’s

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See Maddison, Angus (2003), “The World Economy: A Millennial Perspective,” Development Centre studies (OECD), Paris. 5 Xi Jinping, Work Together to Build a Good Home for the Good ecology of the Earth, http://pol itics.people.com.cn/n/2013/0721/c1024-22,265,318.html.

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emissions of Carbon Dioxide (CO2) and other Greenhouse Gases (GHG), the main cause of global warming, are already the largest of the world. Thus, the ambitious quest for an Ecological Civilization (EC) which encompasses more than a mere sustainable economic development: it has to do with the moral fabric of society and includes changes in the way we produce, but also in the manner that we consume. Let us not forget that China is a very large and unique civilization in itself. Indeed, it is the longest civilization continuum that we have in the world. China is much more than a conventional “nation state” (or country). Its five millennia civilization makes China particularly endowed and apt for tackling this civilizational challenges. China has to transcend the pattern of production and wasting consumption that has defined the western nations and even Japan or South Korea. Particularly, it has also to implement a dramatic shift in the energy mix and consumption patterns. This is a must if China wants to truly achieve an EC. So, growth has to be redirected and become more sustainable, less energy and materials dependent. Throughout the rest of the twenty-first century, the impact of climate change will be felt ever more strongly. If we truly want to avoid an environmental catastrophe it is imperative to deviate from the unsustainable path GHG emissions and other threats to the atmosphere, the earth’s biomes, and biodiversity. It’s a daunting task that belongs to all countries. But China, not only for her sheer size and strength but for its commitment to the EC, should play a leading role. We need not only a new way to produce, but also a “circular economy” which minimize wastes and consume in a different way, globally. As the main trading and manufacturing county in the world, China is well positioned to conduct this process. A major decoupling from economic growth and energy consumption as well as the intensity of materials used in producing goods should be a good starting point. China is fighting its many environmental problems and challenges head on and with great resolve. Pollution of air, soil and water is particularly worrisome. Its main cities are suffering an alarming level of air pollution. The government has announced a “war on pollution” and a wide battery of environment-enhancing measures. Among them: increasing the energy efficiency of the economy, using less coal and cleaner technologies. Reusing and recycling of wastes throughout the economy. On the energy transition front, China is taking the leadership on clean energies, mainly wind (Eolic) and solar. To achieve this it will take time, financial resources, and a steady stream of innovations. But the course is well set already. There will be a more rigorous physical planning and ordinances in order to achieve a more “beautiful China”. All this will be achieved through a mix of market based mechanisms (incentives, disincentives) as well as “command and control” measures. There will be a very strict systems of water saving and conserving schemes, energy, and other key resources. They would draw a “Red Line” of environmental protection and, to achieve real sustainability staying within the carting capacity of the different regions and ecosystems. In general, the recent environmental performance of China has clearly improved with some sectors and regions legging behind. But carbon emissions are still growing albeit more slowly in recent years. The energy mix reflect this: hydro electrical plants share in the energy mix are growing fast as well as other renewable and “clean” energy

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sources. China plans to increase the share of renewables in the energy matrix form the present around 12% to more than 20% by the early 2020s. It has already the world’s largest installed capacity in wind and solar energy, and both are growing fast. Besides, energy intensity or energy efficiency (the diminishing of energy input per unit of product) has been improving steadily. After all, a civilization change, beyond protecting the material-ecological basis of the economy, must include a transformation in the way we produce and consume, as well as a sustainable use of territories and ecosystems. In other words to dramatically reduce the “ecological footprint” of China6 which is the largest in the world on a total basis (in per capita terms it is still relatively modest). In accordance with this, China has devised a strategy called “CIRCLE” that includes a virtuous circle that combines compact urban development, less reliance on cars of internal combustion engine (gasoline) reduction; a more “circular” economy and a gradual shift to a low and stable urban “metabolism” (less waste), and less carbon consumption, which still is very high in China, around two thirds of the energy mix.

119.1 Cooperation Between Mexico and China Although much smaller than China, Mexico is a large country and economy by any standard of measurement and comparison. Its young population, mostly urban, of more than 127 million is surpassing Japan as the tenth most populous country in the world. Its economy ranks the eleventh in the world with a GDP of a little more than 2.5 trillion U.S dollars (PPP). In both income per capita and HDI Index Mexico is still ahead of China. As an upper middle income country, Mexico is also plagued by pollution problems, mostly in the urban realm, and is starting to feel the effects of global warming. Mexico’s contribution to GHG houses is 1.3% but it ranks the 11th in the world. There is ample room for cooperation projects with China in these matters. In recent years, Mexico has played an important leadership role in the fight against climate change. Always very active in Kyoto Framework discussions and the COPs. After the remarkable Cancun Cop #16 which redressed the failures of past meeting, Mexico was instrumental for establishing a finance framework for climate change, with the establishing of the multilateral “Green Fund.” In fact, Mexico was an early adopter of climate policies: It was the second country in the world to promulgate a Climate Change Law (2012) and has established a public policy body: the National Institute for Ecology and Climate Change (INECC for its Spanish acronym). Mexico passed a key Energy Transition Law and issued a national determined contributions declaration (NDC).

6

The ecological footprint measures human demand on nature: the quantity of natural resources it takes to support people or an economy. Thus, is a measure of human impact on Earth’s ecosystem and reveals the dependence of the human economy on natural capital.

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It is for these reasons and facts that I am convinced that the time is ripe for a dramatic expansion of the China-Mexico cooperation frame on environmental matters, and especially with regards to Climate Change. Both countries have enjoyed over 47 years of close and friendly relationships. We even arranged a strategic alliance in many fields. The mutual benefits of working hard in bilateral as well as multilateral climate and environmental issues are beyond any doubt. The road to forge ahead a truly global “ecological civilization” is open to us. Let’s make history together.

Chapter 120

Strategic Studies in Developing Countries Aydin Nurhan

120.1 Definition In the classical sense, strategy is an effort to get rid of uncertainty, a long term policy planning based on realistic evaluation, solid resources at hand, to achieve desired goals. Lawrence Freedman, in his book Strategy: A History defines strategic approach as “an ability to look up from the short term and the trivial to view the long term and the essential, to address causes rather than symptoms, to see woods rather than trees.” And the Strategic Research Centers are the governmental or non-governmental institutions to facilitate this effort. Their mission is to take the raw data and turn it into “processed information” eligible for application by executives. In the information age, humans can reach so much data, yet, especially diplomats, military, and intelligence services get lost in the environment of “information pollution.” Add to this the daily bureaucracy they have to deal with, they are not in the best position to read deeply, reflect and innovate doctrines or policies. Hence decision makers opt for powerful analyst brains and the processed information of respectable think tanks. Strategic Research is a very expensive, luxury activity, requiring millions of dollars, many a time to be spent for no substantial benefit in the short run. They are especially luxurious for developing countries which have not yet reached the level of offensive, pro-active foreign policy. It is a luxury field for them because politicians and bureaucrats of passive, re-active states (the intended customers), do not know how to use, or what to do with the processed information. Many times, developing states, for pride, spend hundreds of thousands of dollars for hosting international brainstorming panels. Creative ideas produced in these A. Nurhan (B) Center for Strategic Studies, Ministry of Foreign Affairs of Turkey, Ankara, Turkey e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_120

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panels cannot be canalized into action by these countries. But using the creative ideas of these panels; the militaries, diplomats, and intelligence services of powerful states can develop hostile ideas against these very hosting countries by swiftly and effectively turning the outcoming new ideas into action. The greatest handicap of countries not advanced in strategic studies is the clog in channels, where processed information cannot reach the decision makers and put into action. In developing country bureaucracies and business circles, there is not yet an awakening to apply information in practice.

120.2 Culture of Doctrine Starting with the USA, Western administration mentality prefers policies based on integrated, coherent doctrines. Doctrines are born out of solid, consistent ideas which have been distilled throughout years. Western executives have the ease of choosing one of the doctrines proposed to them, harmonize it with their worldview, and assume it as state or corporate policy. In strategic studies, some countries are taken under microscope as laboratory insects, observed and analyzed in all dimensions, and then taken into evaluation for manipulation in the interests of the observing state. The most important factor in strategic studies is the awakening hunger in the brain of the decision maker. When we look at 10–15 years back issues of Foreign Affairs magazine, we see the intellectual inquisitiveness and search of American policies practiced today. When wise decision makers face vital decisions, they give the issue at hand to think tanks and have it elaborated by official and civilian thinkers. This tradition of referring to independent experts, saves executives from random, arbitrary decisions taken by a few persons behind closed doors. Offensive, pro-active states, let us say looking for a 20 year perspective on a certain field: • give the issue to universities, allocate research and Ph.D. scholarships • spend millions of dollars to build networks among international strategic institutions (ad hoc networking for case studies or continual networks for long term strategies) • to exploit thinking brains of target countries, they establish branches of their think tanks in those countries. Through these brains, they also inject their manipulating ideologies into the targeted countries. Governments with offensive, pro-active policies do not make random symposiums, they develop projects which would answer their curiosities and needs, first formulate the target, then make the budget to attain that goal.

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120.3 Defensive Culture Contrary to the doctrinaire approach, we have the defensive, palliative, “saving the day” approach of the developing states. In the international game of chess, countries other than regional or global powers are in a defensive position. They may try to be “Game-Breakers” against the strategies of “Game-Makers.” They are re-active, expect the offense always from across, and try to predict and block or break the game of the offensive powers.

120.4 Education Philosophy Root cause of the problem is the philosophy of education: that of memorization rather than conceptualization, submission rather than liberal spirit. Decision-makers in many developing countries think money or rank brings wisdom with it. Their brains are not hungry for creative solutions yet. Hence, they do not feel the need for expert opinion. Neither do they read professional literature. They do not know how to use counselors and consultants. Their decisions are based on memorized, narrow information, moreover, sentimental, momentary, random, arbitrary choices. In strategic studies, to get correct answers, correct, relevant questions have to be asked. And correct questions evolve through concentration in a field through years, and a lot of reflection. This concentration for an official who is in a daily hurry is a luxury, and out of question.

120.5 Liberal Atmosphere Another characteristic of strategic institutions is playing the devil’s advocate. Strategic studies, in a way, resemble vanity fashion shows with maverick ideas, many a time luxurious, impossible to apply to real life. Yet they usher decision makers to reflection, opening their visions and horizons. Another must for these institutions is the liberal atmosphere where brains who have been tested as responsible thinkers, can assert maverick, anti-status-quo, heretic ideas without fearing being coined as traitors. On the other hand, the delicate separating line in the training of the civil servant and strategy staff is neglected in many countries. An official is required to memorize his topics well, give impeccable data to his seniors when asked, but keep his ideas to himself unless asked for. Whereas a strategy staff is trained to give “ideas” rather than memorized data. He is conditioned not to focus on individual data, rather to synthesize them, dilute them with his wisdom and use this synthesis for creative thinking. The greatest mistake the

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executive would make is to ask for “impeccable data” from these special, expensive minds rather than ideas, rebuke them for snobbism, intimidate and deform their formation.

120.6 “Les Absents Ont Toujours Tort: Absents are Losers” Strategists, like diplomats, are one international family, always together at international forums. Every major issue has its own clans within this family. Developed countries in particular, make sure that their experts who are highly specialized and sophisticated in their fields, are present at all important international brainstorming sessions. Because they know the motto “Les absents ont toujours tort: absents are losers”. Powerful strategic minds of defensive countries, perpetually participating in the sessions of these clans, may gain clout throughout years as respectable members. In this long process, first they shall be affected by the prevailing international culture of these groups, join in spirit with them, then gradually start being taken seriously within the group. This is the point where they can convincingly sell their cause to the international community. Yet, when developing countries establish strategic institutions, in the beginning, these new centers become the best source of intelligence for foreign powerful states. Because the brightest brains of these countries come to meetings with the best “processed information” and “pulse” of their countries and put them forward with enthusiasm and eagerness in a sincere manner. Unknowingly, they may be serving the interests of other countries, whereas they may also unknowingly fall into the trap of being the importers of ideologies, becoming intellectual compradors of the foreign powers. Hence, in early phases of strategic studies, countries have to be alert to these dangers. In reality, Strategic Brainstorming Sessions are games among states on who can turn the “processed information” produced in these sessions into practice for their national policies. In this open game, every expert throws his expertise into the hat, then everybody gets what he needs from the hat and utilizes it. And the greatest point here is that the underdeveloped country cannot turn this processed info into action, utilization, not even aware of the game. Still yet, the developing countries have to join this game at a certain point. Turkey through the revolutions of Presidents Ozal, Gul, and Erdogan, has reached a considerable level in strategic institutions by now. Political parties’ and the private sector’s awakening for strategy has come to an encouraging point today. Diplomatic missions of powerful states also get into effective communication with the local think tanks. Yet diplomats of passive countries are not even aware of the think tanks in the countries they work. They do not become members of these clubs, and if by chance they receive think tank reports, they would not know how to utilize that information either.

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120.7 Parallel (Second Track) Diplomacy Considering that cold relations among states sometimes take long years, leading to stalemates in relations, one of the efficient ways to overcome these clogs is to engage private or semi-official institutions in the game. In modern, democratic societies, as public diplomacy comes on the stage, NGOs play a very positive role both as mediating institutions and pressure groups on foreign policy. As think tanks are one big international family among themselves, with their networks and international meetings, they may effectively be instrumental in finding solutions to bilateral and multilateral conflicts.

120.8 Turkish Outlook From the point of view of Strategic Culture, Turkey gives us two opposing images. On the one side, the country shows the re-active, defensive reflexes of the dissolving Ottoman Empire, yet at the same time, it shows the pro-active, offensive reflexes of the rising Republic, catching all off guard and in surprise. As Turkish economy is at the threshold of trillion dollar GDP, it is getting ready to enter among regional and global actors; parallel to this development. Republican administrations shall feel the need for offensive, pro-active policies, train multilingual experts in all fields of interest and base their policies on doctrines developed on serious analyses and alternatives.

Political Parties and Think Tanks Considering the frequency of military coups in Republican history, it would be unrealistic to expect Turkish political parties to have a sophisticated level of strategic culture in developing their policies. In this reality, civil servants cannot expect strategic decisions and direction from politicians yet. Opposition parties establishing shadow governments and effective think tanks to feed and support their shadow ministers, and the maturity of this approach seems a bit distant yet.

Bureaucracy and Think Tanks Looking at the issue from bureaucracy, the information processed at think tanks does not seem to be effective on bureaucratic practice yet, either. Once upon a time, a

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general had said that they did not need the science of sociology to understand the nation. Turkish think tanks, rather than working for lobbies and corporate interests, are at the level of supporting diplomacy, military, economy, and social decision- making. But gradually, they also do some research for globalized private sector which has reached the maturity to need their services. We can say that foreign diplomatic missions and corporations in Turkey take our think tanks more seriously and value their services more eagerly than our own.

Corporate Sector and Think Tanks As Turkish corporations open to global competition, they start feeling the need to enter the field of strategic plans and decisions, hence, both restructuring internally, and ordering research to Turkish and foreign think tanks. To emphasize again, institutions at offensive, pro-active level feel the need for strategic studies on target institutions to manipulate or defeat them. Business world not only needs research for competition among themselves, but also needs it to affect policies of governments for their vital interests.

Think Tanks as “Civil Pressure” Institutions Especially in the Western world, pressure groups like environmentalists, women’s rights groups, etc., order research just like the corporate sector, to convince the public and the governments to follow their advice and requests. There is also awakening in this field in Turkey.

120.9 Activities Research Priority of Strategic institutions is to make research or bid out research. They have their own fellow researchers as well as guest researchers, and they give scholarships to academic studies in fields they seek light, etc.

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Conferences, Seminars, Grassroots Strategy Culture Meetings of strategic institutions in developing countries are generally elitist, closed circuit, do not rise on pyramids, do not get nourishment from democratic, grassroots participation. Their meetings are held in the stiff, solemn atmosphere of spies, generals, diplomats, and reliable academics without much liberalism or creativity. We may perhaps say that these meetings are a bit wider occasions for bureaucrats with the participation of trusted civilian brains, to widen horizons for decisions to be taken behind doors by a few. Conferences, especially keynote speaker luncheons and dinners are common grassroots events in the Western world, especially the USA. Friendly groups of about 20–30 persons eat together once a month and call an expert as the guest keynote speaker. This tradition is both a horizon widening, as well as reflection building practice, yet in Turkey, apart from Freemasons and Rotarians, not very many groups are in such practice. Yet, happily, when world-class brains are invited by think tanks, interest is in speedy growth especially in business community in the metropolis. Think tanks may play a constructive role in awakening intellectuals for such lectures; they can send their fellows to such events. Governors, mayors, and NGOs, in cooperation with universities, may also play a leading role to trigger the culture of strategic studies in rural locations.

Cooperation with Foreign Institutions (Networking) In parallel to their research, think tanks also organize seminars, conferences, roundtable discussions, and panels, or participate in invitations, and collect and produce knowledge. As resources of weak institutions of developing countries are scarce, they can do local events, whereas financially strong institutions of rich countries can host international events costing hundreds of thousands of dollars. Financially poor institutions are passive in international arena; they rather answer the initiative, intellectual inquiry, and invitations of rich and powerful foreign institutions. Underdeveloped countries undermine their brains due to corruption, nepotism or negative selection, and do not ask for their valuable opinions. When these brains are invited to international conferences, they run with utmost enthusiasm to give the best processed information about their countries to foreigners, not to betray their countries, but to prove their knowledge, art, and science. As strategic institutions invite each other to their conferences, they also, with bilateral and multilateral agreements, go into institutional co-operations. Advanced think tanks also release daily, weekly, or monthly emails to promote their agendas and worldviews to their partnering institutions and the expert audience in their field.

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“No Product Without a Buyer”: NGO-Government Relations Strategists are like artists. They are intellectual, creative artists. Just like any other artist, they would be too happy to see their innovative ideas spread to the community, to the masses. The greatest dream of a strategist is the adoption of his ideas by the Government and put into practice. The mechanism of interface in turning the processed information of think tanks into government practice are the Strategic Research Centers of the Foreign Ministries, Militaries, Intelligence Services, Interior and Economic Ministries, etc. These semi-official Strategic Institutions ideally work in close cooperation with civilian think tanks and play a bridge, catalyzer role, take the processed information of civilian institutions and help in transferring them into action by their bureaucracy. In the case of polemically dangerous fields these government Strategy Centers, rather than doing research themselves, should invite independent institutions to enter an open bid. They may also financially and logistically support (provide airplane tickets and per-diems for important international symposia) and encourage civil institutions in the fields they are hungry for processed information and help them become centers of excellence in specific fields of national requirement. Government strategic institutions, alongside their official research, also take initiative in areas where they smell certain trends, do the necessary research, and this liberally processed information is also presented to the decision makers.

120.10 Publications Another important activity of strategic institutions is publishing periodicals and other publications of the articles of fellows and international experts. Serious think tanks publish serious, referee-managed quarterly journals. Publications of NGOs prefer enlightening the public in their cause and try to create pressure on political authority to their demands.

120.11 Library, Archive, Electronic Data Bank The power of a strategic research center, above all, is measured by the richness of its library. As it has a general library in strategic studies, a good one has a library of specialization, special collections. If an institution attracts specialists from around the world, it may have two reasons: one, a special, valuable collection, and two, presence of respected global authorities among its fellows. Technology is swiftly bringing all historical data into digits, still yet we are far away from finding the most valuable collections on the Internet yet.

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Another serious factor to be an important center is to have a reliable and dailyupdated web page. If the web pages are not seriously updated and disciplined, we cannot speak about a serious institution. Links should have a special importance; they help researchers a lot in searching the correct info at correct directions. In the age of information wars, and public diplomacy, another good idea for the web pages, may be to target grassroots audiences. A practical advice is to have different length reports for different needs, say 20 pages, 10 pages, 5 pages, 2 pages and half page, executive info on every important cause, so that anyone in the world interested in the subject can choose the best length, fully furnished for his quick need, and make an easy empathy. These papers would give a synopsis to researchers, but more importantly, save the wider audiences the effort of going to forty or fifty Internet sites to collect reliable, comprehensive data. Lastly, these summaries would give a pro-active stance for the country in affecting world audiences to its cause.

120.12 Finances As think tanks get open and secret funds from the governments, they also get orders from the business world, either in the form of commercial payments or sponsorship. Resources include the founders, foundations, sponsors, political parties, NGO or corporate donations, advisories, and research ordered by clients.

120.13 Personnel The top qualification for an expert to work at a strategic institution is the thirst, the hunger for knowledge and a passion for wisdom. Hence these institutions should cooperate with universities to follow the brightest students with these qualities, support them for masters and Ph.D.s in global universities, have them learn specific languages, and employ them with civilized salaries so that their brains would not be bothered by daily mundane needs. As would be realized, this is an expensive and long-term investment. And luxurious for developing countries. As in capital accumulation and state enterprises in early phases of capitalism, it would be wise of the governments to pioneer by investing in strategic institutions. These experts, after maturing, may quit the government institutions, but still they should be seen as national assets. The western countries have pools of experts in a wide variety of fields. Especially television, when faced with a special agenda, goes to the list in the pool, and ask the expert opinion of one of the authorities in the field. Whereas in developing countries, because there are no such relevant pools, the televisions interview the so called “mediatic experts” who neither know the subject

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in depth, nor the culture and language, let’s say, of a country or a region in the agenda and give just surface evaluations. As preparing strategists with PhDs for desks of specialization in the long run, and until they assume their desks, short term solutions for think tanks would be to cooperate with universities, use their academicians, and also employ foreign academics make research on their own countries. The important point here, is to have the desks of specialization with cell system, with no more than three experts, and make sure the number is not diluted in time. The aim here is to have the information concentrated in cells of a very limited core of specialists who are continuously busy. These few experts shall be the ones present in all international fora and well experienced in the long run as a member of this specialized family. To repeat again, think tanks do not need bureaucrats to save the day. They need enthusiasts, passionate, curious wisdom-lovers hungry for knowledge, who, once full, would like to pour over their unstoppable knowledge to wide audiences.

120.14 Translation/Interpretation Office One of the most valuable qualities of think tanks is “continuity.” Foreign office, military, intelligence, police staffs are too mobilized, frequently moving to different posts in different geographies. This mobility leads to lapses in corporate memory, whereas strategic institutions have experts who serve in the same post for many years. Continuity and memory would be a necessary qualifity for these institutions. And with their continual knowledge accumulation, having experts who would know the culture and languages of their specific fields, they may also have a pool of translators for government and private sector needs and get revenue in return.

120.15 Result Strategic Studies has started becoming a need for emerging powers that would be eager to have offensive, pro-active policies. The increase of strategic institutions in a developing country would give us the bright news that the era of random, unserious decisions behind closed doors based on the daily psychological fluctuations of the executives are fading.

Chapter 121

External Factors Affecting Sustainable Development of Mongolia Zagdtsesem Ukhnaa

This presentation considers sustainable development policy of Mongolia, external factors affecting sustainable development policy of Mongolia, especially factors from neighboring countries, and cooperation work between Mongolia and China briefly. The scientists from the late 60s of the last century warned that global economic development can be stopped due to emphasis on economic growth through improper use of natural resources and capital that led to environmental degradation and risk. This issue gained attention in international arena and the global development new trend of solving the environmental, social, and economic issues comprehensively. It is getting more established in virtue of subsequent meetings organized by United Nations, especially the 70th session of the General Assembly of the United Nations held in 2015 on the theme of “Transforming our world: The 2030 Agenda for Sustainable Development” that approved the “Sustainable Development” program until 2030 and the goal to implement the 17 key objectives, and as of today, the countries of the world are planning to develop their development standard and promote the green economy. I would like to thank the Professor Wang Linggui, the Executive Vice Chairman of the Board of Directors and Secretary General of National Institute for Global Strategy (NIGS) of the Chinese Academy of Social Science (CASS) and other organizers of today’s 7th conference on “Ecological Societies and Sustainable Development,” giving me the opportunity to make this presentation. The Government and Parliament of Mongolia has approved several documents regarding green economy development, such as “21st Century Sustainable Development Program of Mongolia” in 1998, “National Development Complex Policy of Mongolia 2008–2021” in 2008, and “Green Development Policy” in 2014 respectively. Based on the abovementioned documents, the “Concept of Sustainable Development of Mongolia 2030” was approved by the resolution No. 19 of the State Great Z. Ukhnaa (B) Institute of International Affairs, Mongolian Academy of Sciences, Ulan Bator, Mongolia e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_121

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Hural and the “Action Plan for Green Development Policy (2016–2030)” approved according to the resolution No. 35 of the Government of Mongolia respectively, which we aim to implement as a long-term strategic plan for development. The “Concept of Sustainable Development of Mongolia 2030” has determined 44 objectives, which will be implemented through 14 directions for the following goals: Mongolia will reach the frontline of middle-income countries by per capita income in 2030, with many stable economic growth sectors, where average middle and rich middle class dominates in the society and will be a country with a stable democratic governance that preserves ecological balance. Effective policies of the Government of Mongolia, political stability, and every Mongolian’s efforts are essential to achieve this goal. On the other hand, in current circumstances, where regionalization, integration, and interdependence of countries are increasing, mutual productive development of foreign economic relations through studying external factors or development experiences of neighboring countries and adapting them to our own country, bilateral and multilateral cooperation in foreign trade, tourism, investment, etc., will be real factors to implement our development strategy and goals. The Johannesburg Declaration (2002) and the Rio Declarations (1992, 2012) were set objectives to promote integration of the three mutually dependent, mutually sustaining elements of sustainable development, which are related to the economy, society, and the environment, to expand international cooperation and achieve universal sustainable development, and in order to improve the implementation of the sustainable development concept, as stated in Principle 7 of the Rio Declaration: “It is important to develop cooperation and partnership between governmental organizations, local authorities, private sector, citizens, domestic, and foreign investors.”1 In a world of interdependence, the disparities in development of countries and regions have still been impeding the implementation of the UN 2030 Sustainable Development Goals. But I hope that the Belt and Road initiative for China’s “joint development” complies with the 7th Principle of the Rio Declaration and will make a great contribution to regional prosperity and development. Mongolia has been supporting the “One Belt One Road” initiative from the beginning and has been keen to participate in the initiative. This initiative gives Mongolia, as a landlocked country, an opportunity. On the other hand, as a regional partner country, mutually supporting each other’s initiatives regionally and internationally. The President of the People’s Republic of China Xi Jinping paid a state visit to Mongolia by the invitation of President of Mongolia Tsakhia Elbegdorj and, during his visit, signed 26 documents concerning cooperation and relations between the two countries, which included the “Intergovernmental agreement on sea transit transportation of Mongolia through the territory of the People’s Republic of China” and the “Intergovernmental agreement on development of cooperation on railway transit transportation.” In addition, he signed the “Memorandum of Understanding between

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D. Dagvadorj, “Education for sustainable development,” UB., 2004, p. 24.

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the governments to develop railway cooperation” and the “Memorandum of Understanding between the Ministry of Road and Transportation of Mongolia and the State Railway Agency of People’s Republic of China on renewal of the Mongolian-Chinese border railway agreement.” Although the abovementioned contracts and agreements are concluded, our country uses only Tianjin port for transportation. This is largely due to lack of infrastructure in our country’s railway policy and that the issue of infrastructure development in new railway direction is largely unresolved. The construction of new railways and the improvement of infrastructure is a complicated problem that requires a lot of money, but it is necessary to solve these issues in a timely manner and start participating in regional economic relations. Furthermore, it is obvious that this issue will have an impact on economic development of our country. The “Action Program of the Government of Mongolia in 2016–2020” stated to “Develop transit transportation through developing international cooperation of transport sector and joining regional infrastructure and transportation integration.”2 We need to pay attention to implement of this clause, to attract foreign investment in the road and transport sector, mobilize internal resources, establish the economic corridors of China-Mongolia-Russia, which will be established in the frame of cooperation of the “One Belt One Road” program. The Presidents of Mongolia, the Russian Federation, and the People’s Republic of China have met on the second summit meeting of SCO and BRICS countries, held in the capital city of Bashkortostan Ufa of Russian Federation in 2015, and agreed to establish the “Economic Corridor” between Mongolia, the Russian Federation, and the People’s Republic of China. During the meeting, they have officially signed the “Memorandum of Understanding to make a plan for establishing the Economic Corridor of Mongolia, Russia and China”. The third summit meeting of the Presidents of Mongolia, Russia, and China was held in June 2016 during the 16th Session of the Chairmen of the Shanghai Cooperation Organization member countries, which was organized in Tashkent, the capital city of Uzbekistan, and although they signed 32 specific documents, in the frame of the Memorandum made in 2015, and steps were taken, but it has been planning to implement more than 10 projects with high implementation basis. As stated in the “Economic Corridor of Mongolia, Russia, and China” establishment program’s document, areas of cooperation should be: first, promoting interdisciplinary development of transport infrastructure, secondly developing border ports, improving customs and quarantine control, third strengthening cooperation in industry and investment sectors, fourth, deepening trade and economic cooperation, fifth, expanding humanitarian exchange and cooperation, sixth, protecting environment and strengthening cooperation in ecological sector, and seventh, developing regional and border cooperation. The implementation of the program is set by the Ministry of Foreign Affairs of Mongolia, by the Development and Innovation Committee of People’s Republic of China, and the Ministry of Economic Development of the Russian Federation.

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By implementing the “Economic Corridor” program of these three countries, opportunities for development of real economic relations with third countries will be increased for Mongolia, and possibilities to join regional economic integration and our country’s position in Northeast Asia also will be increased. For our country, as one of the Northeast Asian countries, it is very important to strengthen the economic position in this region, join the road, transportation, information, and communications network, have equal relations with regional countries, not stay behind from the development of cooperation in this region, create economic and other real interest of these countries in Mongolia, and develop relationships and cooperation with Northeast Asian countries. Supporting the policy and activities in participating in multilateral regional cooperation in Northeast Asia and in strengthening strategic stability and security cooperation will play a significant role not only in protecting interests of our country, but also in strengthening our position in this region. The Prime Minister of Mongolia J. Erdenebat has signed Memorandum of Understanding between the Government of Mongolia and the Government of China, regarding coordination of “Development Road” (“Steppe Road” project) and “Belt and Road” initiatives during his visit to People’s Republic of China in 2017. This became one step towards participating in the “One Belt One Road” building project. In case of successful implementation of the “One Belt One Road” building project and if Mongolia participates in this project, then the transportation barrier to exporting our products to international markets will be reduced and economic cooperation in the region will be increased. Mongolia will be able to develop mutually beneficial economic cooperation and actively participate in regional economic processes. Our country is interested in cooperating with neighbors and regional countries in this area broadly. It is needed for the transport sector to attract foreign investment and mobilize internal resources, in order to establish a real “Economic Corridor of China, Mongolia, and Russia.” Member of the State Council of the People’s Republic of China, Foreign Minister Wang Yi visited Mongolia in August 2018 by the invitation of the Minister of Foreign Affairs of Mongolia D. Tsogtbaatar. During the visit, Wang signed on the Cooperation Plan of 2019–2020 between Ministry of Foreign Affairs of Mongolia and Ministry of Foreign Affairs of People’s Republic of China and agreed to provide specific work plans for implementation of “Belt and Road” initiative and “Development Road” initiative of Mongolia. In addition, he agreed to form negotiations between governments in respect of transboundary economic cooperation zone of Mongolia and China. Agreed to intensify the trilateral cooperation of Mongolia, Russia, and China three countries, accelerate construction of economic corridor of Mongolia, Russia and China and to support regional development.3 There are 32 projects will be implemented in the frame of building of economic corridor of Mongolia, Russia, and China. But first of all, projects of railroad upgrades, 3

www.mfa.gov.mn.

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highways, and power transmission lines to implement in near future are being discussed by three parties. The “Economic Corridor of Mongolia, Russia, and China” is an integral part of the infrastructure mega project “Development Road” from Mongolia, “Silk Road” from People’s Republic of China and Eurasian Economic Union of Russian Federation. Both Mongolia and China have good neighborly relations and are developing strategic partnership. This year marks the 70th anniversary of the establishment of diplomatic relations between the two countries and celebrating through overviewing the achievements of the cooperation in the 70-year period, identifying further goals and objectives. The President of Mongolia Kh. Battulga made an official visit to the People’s Republic of China in April 2019 by the invitation of Xi Jinping, the President of the People’s Republic of China, the heads of the two countries have exchanged their views in respect of developing and expanding the cooperation between Mongolia and China in such sectors as political relations, trade, economy and humanity, and international and regional issues. Also, in the frame of the visit, they have signed 18 documents, which include the plan of cooperation between the Government of Mongolia and the People’s Republic of China regarding to make progress in building of “Development road” and “Belt and Road” projects; jointly organizing Mongolian and Chinese exhibitions; Memorandum of Understanding between the Ministry of Food, Agriculture and Light Industry of Mongolia and the Ministry of Commerce of the People’s Republic of China; about the beginning of the medium-term program for the development of trade and economic cooperation between Mongolia and China; and Memorandum of Understanding between the Ministry of Foreign Affairs of Mongolia and the Ministry of Commerce of China. The cooperation of the two parties leads to improving the structure of trade, increasing port capacity and exports of agricultural products, developing transit transportation, humanitarian, and tripartite cooperation, deepening relations between the two countries, in accordance with “mutual benefit and partnership relationship” of the development, and developing comprehensive strategic partnership relationship, which will play an important role not only in the interests of the peoples of two countries, but also in developing regional cooperation.

Chapter 122

Economic Growth and Inclusive Development in the Era of Disruptive Technology Boonwara Sumano Chenphuengpawn

We are living in a highly dynamic world where changes happen at an ever- increasing pace. Such changes are driven by new technology and innovation which are affecting many economies and societies. One of the most transformative technologies nowadays is probably Artificial Intelligence or AI. Over the past few years, AI has significantly improved and demonstrated capabilities that are either equal to or better than human. For examples, AlphaGo Zero won a competition against AlphaGo, which had previously defeated the human Go world champion. The program “Libratus” won poker games against human players, and the AI-powered robot in China, “Xiaoyi,” passed the national medical licensing exam. On one hand, AI advancement has enabled robots to perform tasks similar to humans and has become a part of our daily life. AI can be deployed in various business sectors. In respect of marketing and sales, AI could help in providing customer service and conducting analysis of previous sales figures. In manufacturing and supply chain management, AI could facilitate preventive maintenance by equipping expensive machinery, such as an electricity generator, with sensors so that it can detect deviations in order to prevent potential machine failure and significant loss. Furthermore, AI can help with detecting and preventing fraudulent transactions. More and more businesses are adopting new technology and innovation. For examples, the John Deere Company invented a smart tractor with functions that can be controlled remotely. Japan makes use of a movement sensor to enhance the production of wagyu beef. Denso Company Thailand applies lean automation in its automobile parts manufacturing operations. As a result, the company was able to reduce the human labor component in its system. On the other hand, technology is having a severe impact on the labor market. Many positions, such as those which require repetition of work, will be replaced by B. S. Chenphuengpawn (B) Thailand Development Research Institute, Bangkok, Thailand e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_122

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disruptive technology in the near future. According to a study of Frey and Osborne,1 50% of workers in many countries will be replaced by technology. Even those with high levels of education and some technical skills may also face job insecurity, as proven by a number of tech companies and startups around the world. SoftWear Automation, a tech startup in the United States, for instance, succeeded in developing automation called “Sewbots” that are capable of carrying out the whole process of T-shirt manufacturing. SMACC, a German startup, is also disrupting accounting departments around the world through its development of machine-learning software for invoice data extraction and processing, optimized payments, and even liquidity analysis. Robo-Lawyer, an AI-powered automated system, provides clients with legal consultation. Hence, all levels of jobs will soon be affected to different extents by disruptive technology. These new technologies and innovations have great potential to promote economic growth through the invention of new products and services, reduction in business costs, and boosting competitiveness. At the same time, the invasion of AI can put many people at risk of unemployment and thus increase the government’s burden on social welfare. In order to ensure a balance between economic growth and inclusive development in the era of technology disruption, there are at least three things that countries should focus on: introducing a new way of learning to encourage new skills for the future, providing inclusive social protection for the people affected by automation, and finding a suitable policy to manage disruptive technology. This paper discusses the three measures in the following sections.

122.1 Developing Skills for the Future First, to ensure continuous economic growth in the era of AI, both the current and the next generation of the labor force are very much expected to keep reinventing and empowering themselves with digital skills. Moreover, there are three domains of human competence with which AI may barely compete in the foreseeable future: delicacy, creativity, and social intelligence. The occupations requiring high proficiency in the three competency domains, such as surgeons, will be at lower risk of being replaced by future technology. This means the educational curriculum and the way of learning have to be transformed to prepare new generations with the attitudes, skills, and knowledge needed by twenty-first century learners. Such learners should have the opportunity to develop their curiosity and creativity, and their communication, collaboration, and problem-solving skills through active learning approaches. Some governments have already introduced such active learning approaches. In Estonia, students are learning coding through various experiences, ranging from 1

Frey, Carl Benedikt and Michael A. Osborn, 2017, “The future of employment: How susceptible are jobs to computerization?” Technological forecasting and Social Change, vol. 114, issue C: 254–280.

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employing visual programming language and building robots to help the elderly. In Singapore, the government runs an online platform, called My Skills Future, to help Singaporeans find jobs relevant to their profile or existing skills, as well as identify any missing skills. Approximately 24,000 courses, either run by government agencies or the private sector, are certified by the government. The Singaporean government also subsidizes up to 95% of the fees for such courses; offers training coupon worth S$ 500; and compensates employers for working hours employees spend on self-reinvention. In some parts of the world, it is the private sector that is leading the movement. Andela, a startup in Kenya, offers an intensive six-month course in which participants learn about software engineering and earn a livable wage at the same time. After passing the course, selected candidates are subcontracted to join the development team in global enterprises, and they get paid at much higher rates than they otherwise would. The same model can also be applied to address the needs for workforce reskilling and workforce displacement caused by technological innovations and changing economic conditions. An example is a startup in the United States, called BitSource, which retrains former coal miners as computer programmers. Hence, strong partnerships across different sectors and organizations could be the key to successful skill reform initiatives. For the partnerships to work, each actor should adjust its role and become more open to new approaches. The educators may endorse the use of technology in learning tools and support the learning of all age groups. Employers could increase their support in terms of reskilling, either in the form of providing in-house training sessions, or allowing employees to attend external training without deducting their leave days. The government must also be committed to fostering a policy of lifelong learning, ensuring that people at any stage of life can access re-skilling programs, with strong emphasis on career change.

122.2 Providing Inclusive Social Protection Generally, most governments provide various types of social welfare systems to ensure a better quality of life for their population. To ensure that economic growth spurred by disruptive technology will leave no one behind, social protection policy needs to be adjusted, especially for those who become unemployed due to automation, those in informal employment, and the vulnerable population. Since disruptive technology increases the possibility of unemployment, social protection for the unemployed workers has to be redesigned. To ensure that the increased number of people claiming for unemployment benefits will not threaten the national social security fund, unemployment benefit package should be designed to encourage people to quickly get back to employment. For example, in Denmark, where the unemployment rate is high and labor unions are strong, a system called “Flexicurity” is implemented. The system has two substantial components: flexibility of employment, and stability of financial supports. Flexibility of employment refers to the ability of employers to flexibly hire or not hire new employees depending on the business situation. At the same time, unemployment benefits must be adequate

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to cover daily living needs until the unemployed person finds a new job. To do so, a proactive policy plays a crucial role in providing essential skill trainings and life-long learning in response to the demand in labor market. According to an estimate by the International Labor Organization (ILO) in 2018, around 61% of the world’s workforce are in the informal economy. This is especially true for many developing countries, where a majority of workers are in the informal sector. In the very near future, the number of informal workers is expected to increase significantly as a result of disruptive technology. Owing to enhanced technology, people are able to work as freelancers or start small businesses by utilizing online platforms. According to a report by the European Commission in 2018, 2% of the adult population across 14 member states work more than 20 h per week or earn at least half of their income through online platforms.2 While the informal economy plays significant roles in providing additional income, reducing poverty and inequality, in many countries, however, social protection schemes cannot reach informal workers. Hence, an increase in the number of informal workers who are not covered by social security schemes, and thus are not entitled to social security benefits such as healthcare, old-age pension, work-injury, and unemployment could mean an increase in the social assistance budget of the government. Theoretically, the government should recruit all workers into the national social security system. To do so would be very challenging because of the limitation of data to detect freelancers or other informal workers. Moreover, the lack of data about income and working hours of informal workers prevents governments from designing an attractive package of social security benefits and a suitable contribution rate. Nevertheless, some digital platforms such as Uber and Grab have already collected information about income and working hours of their members. Thus, governments may start with these operators, and gradually expand coverage to other informal workers. Despite the negative impact of technology on the workforce, new technology such as blockchain, digital ID, and e-money can be utilized literally for better provision of welfare services to vulnerable people. Traditionally, social welfare provision is often based on eligible criteria such as nationality and age. This means identification documents are needed to verify such criteria. However, the most vulnerable people in the society are often those who lack identification documents, such as homeless people and people who have problems with nationality or immigration status. Unable to demonstrate identification documents, they become vulnerable due to the lack of access to state’s social protection programs. Even when there is no requirement for identification, many governments nowadays choose to transfer benefit money into the recipients’ bank accounts in order to avoid corruption in the case of cash payment and to save time and cost of operation. In order to open a bank account, however, identification documents are usually required. According to the World Bank, there

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Pesole, Annarosa et al., Platform Workers in Europe: Evidence from the COLLEEM Survey, Publications Office of the European Union, 2018.

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are around 1.7 billion adults worldwide who still have no access to bank account in 2018. Despite such limitations, advanced technology can offer an alternative in providing social protection to vulnerable populations. For them, digital ID could be created using facial and voice recognition, as well as fingerprints. Using an e-money system can widen coverage to reach people who have no access to bank account, especially the vulnerable people who has no identification document. The e-money system could also help minimize the fraud that occurs with direct cash transfers. All information about digital ID and transaction of welfare money can be stored in blockchain, which is difficult to fabricate. This system can prevent the corruption involved with the use of fake ID cards, because all information about identities and transactions of welfare money will be electronically stored for monitoring and fraud detection.

122.3 Finding a Suitable Policy The world is entering into the great era of the digital economy where digital technology will drastically alter the ways of living and doing business. Governments around the world must introduce a set of policies to address the use of new technology and innovation. While these technologies will create more business opportunities, without proper regulation they could also generate turbulence for incumbent businesses and the public at large. A clear example is ridesharing applications, the regulation and legalization of which have been hotly debated in many countries. Ridesharing applications have become increasingly popular among passengers for three reasons. First, it is convenient. Passengers can get the service using their smartphones at any time and any places, and quickly be informed of the estimated pick-up and drop-off times. Second, the rate is fair, both for passengers and drivers, because they can see how much the fare is before accepting or booking the ride. Third, many ridesharing platform operators have introduced systems which ensure the safety of passengers and the quality of service. The operators usually accept only drivers with a clean (non-criminal) record and cars in excellent working condition. Information about the ride such as registration plate number, driver’s name, and route, can also be shared with other people, especially family and friends who may be concerned about the passenger’s safety. The passengers can also rate the drivers and give feedback on the service through smartphone applications. However, in many countries, ridesharing applications are still unregulated. Without proper regulation, ridesharing services are technically illegal. The fact that ridesharing services remain unregulated has made regular taxi operators feel unfairly treated as they are subject to stricter regulations. Usually, regular taxi drivers must pass tests to obtain a taxi driver’s license; the taxis themselves must be registered as public transport vehicles and purchase taxi insurance covering the passengers. Moreover, regular taxis can charge passengers fares fixed by the regulators. Often, the rate is rarely changed to reflect the economic rule of demand and supply. These

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regulatory discrepancies have thus become the motive behind regular taxi drivers’ protests against the entry of competing ridesharing services into their service. Besides, too many or too strict regulations can limit creativity and thus prevent the birth of innovation and start-up businesses. This in turn can affect economic growth and potentially make the country be left behind in the age of the 4th Industrial Revolution. Finding a suitable regulation is thus another approach to strike a balance between promoting the use of technology and minimalizing the negative effects of technology disruption. Several nations are competing for the supremacy in AI development by issuing many policies and programs to promote businesses to adopt and experiment with new ideas and technologies. Among them, China has demonstrated a great example of AI promotion policy. In July 2017, the “New Generation Artificial Intelligence Development Plan” was introduced as China’s strategy to build an AI industry for the country to become the leader in AI development by the year 2030. Several agencies are founded in order to implement the 2030 AI strategy. The AI Plan Promotion Office was formed to be responsible for the implementation and coordination of the AI-related projects, most of them are subsidized by the government. In November 2017, the AI Strategy Advisory Committee was also established to conduct research projects on AI-related issues and to make recommendations on such issues. Additionally, more than 200 enterprises and agencies participated in the establishment of the AI Industry Development Alliance, which has a focus on building a public service platform for the development of China’s AI sector. In conclusion, because the emergence of new disruptive technologies is unavoidable, governments around the world must adopt a new framework for the implementation of policies and regulations in order to be able to use such technology to promote economic growth and ensure inclusive development. There are at least three recommendations, as follows: First, governments should attempt to better understand the true nature and impacts of new technologies. In order to do so, allowing the use of new technology instead of banning everything from the start is a more suitable approach. Introducing a regulatory sandbox or allowing new technology to be used by some groups to assess the cost and benefit of such technology could help governments to decide on the appropriate AI policy for the country. Second, governments should also promote technology development in view of the net benefits for the economy, even if some incumbent business groups may lose out, such as regular taxis in the case of ridesharing applications. Those who are affected by the disruptive technology can be assisted by providing a life-long education and skill training for career change, as well as sufficient social security benefits. Third, regulators should develop a dynamic monitoring system for the use of technology and innovation. Such system must also have a comprehensive data collection mechanism for regular impact evaluation. Technology is changing at an increasingly fast pace, therefore, the impact evaluation must be forward- looking, by considering future scenarios. As the Canadian Prime Minister Justin Trudeau once said, “The pace of change has never been this fast, yet it will never be this slow again. … Technology has

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always brought such promise: a better standard of living, new innovations, remarkable products … But it also brings dramatic shifts in our social, economic, and political cultures.” Because technology will become our future, everyone in the society must be ready for the upcoming age of technology disruption.

Chapter 123

Automation and the Future of Work in Emerging Economies: Issues, Evidence, and a Way Forward Iyanatul Islam

123.1 Introduction There is a sizeable literature that has emerged in recent years on the impact of automation on jobs and livelihoods. This is being ushered in by new technology that manifests itself in various forms. Salient examples include robotics, artificial intelligence, and the rise of digital platforms that facilitate independent work across national borders. Scholars, yearning to attach a suitable epithet to these epochal developments, have come up with a variety of terms. Some call it “industry 4.0,” others the “new globalization” and yet others “the machine age.” A significant part of the literature pertaining to this epoch has focused on estimating and assessing the technical feasibility of automating activities and tasks that are currently being performed by people. Notable examples of such assessments include Frey and Osborne (2017), McKinsey Global Institute (2017), and World Bank (2016).1 These exercises usually find that a large proportion of work, ranging across routine and cognitive tasks, currently undertaken by people can, at least in principle, be automated. Both developed and developing countries are vulnerable to automation. Evidence of this nature fuels “automation anxiety” and thus prompts one to ask: Are emerging economies facing the threat of large-scale technological unemployment? The answer, at least based on first principles, is not obvious.2 The diffusion of technology alters relative prices in both product and factor markets that engenders two competing effects on employment. On the one hand, the substitution of labor by machines leads to job destruction. On the other hand, this “substitution effect” can be more than offset by an “income effect” in which widespread use of technology 1 2

Frey and Osborne (2017), McKinsey Global institute (2017), World Bank (2016). This discussion draws on Islam (2015).

I. Islam (B) Griffith Asia Institute, Griffith University, Brisbane, Australia e-mail: [email protected] © Social Sciences Academic Press 2023 L. Wang (ed.), China’s Development and the Construction of the Community with a Shared Future for Mankind, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-19-7423-6_123

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reduces production costs and prices, raises real income, causes the demand for other goods and services to increase and thus stimulates the creation of new occupations and industries. The direct employment impact of technical progress can also take multiple forms: it can be neutral with respect to use of labor, augment the use of labor with complementary skills or directly substitute workers. The available evidence suggests ground for optimism with “one additional technology job (creating) around five new jobs in the … non-tradable sector” (Frey and Rahbari 2017: 17).3 It should also be noted that the mere possibility of labor-displacing automation does not mean that automation will actually take place. There are inevitably economic, societal, legal, and regulatory constraints that can create long lags between the availability of modern technology and its adoption and diffusion. One estimate suggests that it might take many “decades” before automation becomes a global force and that too is subject to “significant uncertainty” (McKinsey Global Institute, 2017: 13).4 Perhaps one of the most noted cases of robust optimism concerning the impact of new technology on the future of work is the recent work of Sundararajan (2016, 2017). He argues that any loss of formal employment will be offset by the rise of millions of micro-entrepreneurs who will be empowered by digitally enabled technology. Is this really the case? This paper offers a critical appraisal and suggests a way forward.

123.2 Impact of Automation on Employment: International Evidence and Their Implications The notion of “automation anxiety” that lies at the root of an apocalyptic vision that machines will destroy millions of jobs is neatly captured by Fig. 123.1. As can be seen, the most populous developing countries (China, ASEAN-5, India) have a higher risk of joblessness due to automation (57–69%) than either the “rest of the world” (50%) or the OECD countries (57%). Yet, one should exercise caution in interpreting these numbers. The statistics merely show that it is, in principle, possible for a significant proportion of current work undertaken by people to be replaced by machines. Hence, the estimates reveal theoretical possibilities, not actual outcomes. One should also emphasize that in developing countries in general, the challenge is not too much use of modern technology but too little.5 Consider India, an Asian giant, as an example. The World Bank Enterprise Survey (2014) shows that a very small number of small Indian firms (less than 4%) had licensed foreign technology compared with 20.5% for larger firms with 100 or more workers. This constrains their capacity to be productive and to expand their business operations.6 3

Frey and Rahbari (2017). Mckinsey Global institute (2017). 5 This discussion draws on Verick (2017). 6 http://www.enterprisesurveys.org/data/exploreeconomies/2014/india. 4

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Fig. 123.1 The percent of jobs lost due to automation. Sources Adapted from BCG and CII (2017), India: growth and jobs in the new globalization, Table 1, p. 38. Note These estimates were pooled from multiple studies: McKinsey Global Institute (MGI), Frey and Osborne, ILO and CITI GPS and Oxford Martin School. Work is defined in different ways in different studies. In some cases, it is the share of tasks (MGI); in some cases it is the share of employment (ILO, Frey and Osborne); in others, it is the proportion of jobs (World Bank). The estimates for India and China are averages of a range of estimates (52–69% for India; 51–77% for China). All original sources as cited in BCG and CII

Even in the modern manufacturing sector, the use of technology most closely associated with “industry 4.0,” namely robots, is rather modest in emerging economies. Global statistics suggest that two industries, automobiles and electronical/electronics, account for 66% of the global supply of industrial robots.7 Furthermore, only five countries in the world (China, the Republic of Korea, Japan, the United States, and Germany) account for 73% of the total sales volume of industrial robots worldwide. Furthermore, “since 2013 China has been the biggest robot market in the world with a continued dynamic growth.”8 It seems that one should move away from apocalyptic notions of large-scale technological unemployment in emerging economies and focus instead on the ways in which modern technology can be harnessed to create new and productive employment opportunities. Does the rise of digitally-enabled independent work that characterize the “sharing economy” hold promise? Are there ways in which the adoption and diffusion of modern technology can fortify the living standards of the poor and the vulnerable? The next section offers some pertinent reflections.

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Executive Summary, International Federation of Robotics, https://ifr.org/downloads/press2018/ Executive_Summary_WR_2018_Industrial_Robots.pdf. 8 https://ifr.org/downloads/press2018/Executive_Summary_WR_2018_Industrial_Robots.pdf.

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123.3 Harnessing Modern Technology to Create New Employment Opportunities: Implications for Emerging Economies About twenty years ago, Malone and Laubacher (1998: 146) reflected on the “dawn of the e-lance economy”. They drew attention to “electronically connected … elancers” who then “join together into fluid and temporary networks to produce and sell goods and services.” At the time the article was written, Internet connectivity was rather low: around 90 million people world-wide. Malone and Laubacher (1998) speculated that the “e-lancers” would accelerate in growth and size and might even become the norm with the greater spread of Internet connectivity. Since then, more than 51% of the of the world’s population have become connected to the Internet, although there is a persistent digital divide both across countries and within countries.9 The “e-lance” community has certainly expanded. Not surprisingly, a sizeable literature has grown up trying to understand this relatively new form of work and employment. There are various terms used to describe this evolving feature of the labor market: the “sharing economy,” the “gig economy,” the “platform economy”, “digitally-enabled independent work”, “digital labor,” and “online labor”. In the discussion that follows, these terms will be used interchangeably. Sundararajan is probably among the most influential scholars making the case that the “sharing economy” propelled by a community of “micro-entrepreneurs” and working through digital platforms has transformed, and will continue to transform, the world of work as we know it. He even suggests that one might be witnessing the “end of (formal) employment.” One can readily think of iconic examples of the digital economy that “commercialize” personal assets, whether they pertain to transportation (Uber), short-term accommodation (AirBNB), buying and selling of goods (Amazon), or freelance labor platforms (Upwork). The absolute numbers are impressive. AirBNB, for example, has more than two million users; Upwork has 12 million registered freelancers.10 Figure 123.2 depicts the global number of unique visitors to major digital platforms. Sundararajan (2017: 10) argues that the “sharing economy” holds a great deal of promise for emerging economies where “full-time institutional employment is not yet dominant and traditional economic institutions vary in effectiveness.” In such situations, economic exchange through credible and reputable digital platforms can “stimulate a self-employed and entrepreneurial population … and raise … living standards.” There are, it appears, governments in the developing world that have embraced digital labor as an innovative strategy of employment creation. Graham et al. (2017: 138) draw attention to the case of Malaysia where the government intends to “enable the bottom 40% income earners to leverage microwork and online freelancing for sustaining a living.” 9

https://www.itu.int/en/ITU-D/Statistics/Pages/stat/default.aspx. All figures cited here are from Sundararajan (2017).

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Fig. 123.2 Major digital platforms, unique visitors to designated websites (millions). Source Derived from Kassi, O and Lehdonvirta, V (2018) ‘Online labour index: measuring the online gig economy for policy and research’, Technological forecasting and social change, Vol. 137, pp. 241–248, Table 1

Fig. 123.3 Recent trends in the “online labor market”. Source Derived from Kassi, O and Lehdonvirta, V (2018) ‘Online labour index: measuring the online gig economy for policy and research’, Technological forecasting and social change, Vol. 137, pp. 241–248

At first glance, it seems that some emerging economies are well placed to reap the potential dividends from the employment of digital labor. India has become the world’s largest supplier of “online labor” based on an “online labor index” (OLI) created by the Oxford Internet Institute.11 Recent trends in the online labor market based on OLI are shown in Fig. 123.3. One should be wary of the hype surrounding the “gig” economy and the hope invested in it as an important vehicle for employment creation in developing countries. There is much that needs to be known. As Healy et al. (2017: 243) point out: 11

http://ilabour.oii.ox.ac.uk/where-are-online-workers-located-the-international-division-of-dig ital-gig-work/.

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“The quantity of popular commentary and speculation vastly exceeds the quality and depth of the evidentiary base.”12 Some studies that have evaluated the market for digital labor in selected developing countries based on surveys of online workers and transactions in leading online platforms find a mixed picture. There are, on the one hand, “important and tangible benefits for a range of workers, (but) there are also a range of risks and costs that unduly affect the livelihoods of digital works.”13 Such circumspect observations are complemented by an OECD study. It concludes that much work in the platform economy is carried out in small units and irregularly. Platform workers may therefore have multiple jobs, work long hours and under high stress. In addition, such work frequently has no social security coverage, can be terminated at will, and wages are low due to a high level of competition. While platform work has created many opportunities for workers in emerging economies, it has also risked engendering a “race to the bottom” in both pay and working conditions. Moreover, it is likely that a great deal of work remains undeclared, fomenting the informal economy.14 A recent study of the US labor market systematically examines wage differentials among “virtual” workers and workers located in physical work- places with comparable tasks and occupations by drawing on US labor statistics. The author finds that “virtual” workers consistently earn less than workers in physical workplaces in comparable tasks and occupations.15 This seems to go against the conclusion of Sundararajan (2017) that digital workers in the US are better compensated than regular workers probably because the author relied on anecdotal evidence, as a reviewer of his work has pointed out.16 Returning to the case of India, the size of digital labor is probably rather small relative to the vast size of the labor force. Not much is known about wages and working conditions. What is also not known with any degree of reliability is the extent to which the gig economy is a primary or supplementary source of income and as a way of making a transition to the formal labor market.17 Media reports do not seem to paint a positive picture of the conditions faced by some types of workers that form part of this new wave of “micro-entrepreneurs.” Consider, for example, the case of the 900,000 “driver-partners” for Uber and Ola in India.18 For Uber in particular India has turned out to be the biggest market in Asia. However, expansion of this kind of business is constrained by the low level of 12

Healy et al (2017). Graham et al (2017). 14 OECD (2017:14) Graham et al. (op.cit) note that most the respondents in their survey did not pay taxes. 15 Dunn (2017). See also the New York Times which highlights the negative consequences of the ride-share services on wages and working conditions of taxi drivers, https://www.nytimes.com/ 2018/08/09/nyregion/uber-nyc-vote-drivers-ride-sharing.html. 16 See Weiner (2016). 17 A study in the USA suggests that more than 80 per cent of Uber drivers use this role to supplement their incomes. See Hal and Krueger (2015). 18 https://www.statista.com/statistics/690856/number-of-ola-and-uber-drivers-in-india/. 13

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car ownership in India. Not surprisingly, both Uber and Ola have instituted car loan programmes for their driver-partners as a means of increasing car ownership which then can be converted into a commercial asset. However, loan repayments form a major part of the expenses of maintaining a car. This drives down the income of Ula and Ola drivers. Discontent has broken out among Uber driver-partners leading to temporary stoppages of the ride-hailing service.19 This disappointing account of the experiences of Ola and Uber drivers is not unique to India. A similar narrative has been offered in the case of Indonesia.20

123.4 Conclusion: Some Policy and Regulatory Issues In conclusion, one should not downplay the tangible benefits that flow from the evolution of new work opportunities enabled by digital technology. It does, however, suggest the need to engage more critically with the future of the platform economy and the way it will shape the world of work. To start with, systematic evaluations of wages and working conditions in such non-standard forms of employment are required. This will enable policy-makers and regulatory authorities to devise appropriate policy interventions, such as amending labor laws to cover wages and working conditions in the platform economy. The challenge is to reduce the incidence of precarious work in the digital economy while preserving the benefits that flow to consumers in the form of lower prices and wider options. In the specific case of emerging economies, there is the additional challenge of investing adequately in digital infrastructure. Expanding the domain of the digital economy will inevitably be constrained by poor and inadequate infrastructure. Despite phenomenal growth, Internet connectivity is still low in developing countries, reaching just over half the population vis-à-vis more than 85% of the population in developed countries. Both the government, through its public investment and outreach programmes, and the private sector, have a role to play in improving internet connectivity and digital literacy in emerging economies. The long-term aim should be universal digital inclusion, so that one is left behind, which is a key message from the sustainable development goals.21 Finally, one should focus on the broader question of how electronic technology can stimulate other activities that has the potential to reach the poor and the vulnerable. A good example is digital financial inclusion, which seeks to bring the unbanked (typically low-income groups) into the formal financial system at reasonable cost. 19

https://www.ft.com/content/12bf0cce-0d99-11e7-a88c-50ba212dce4d. https://theconversation.com/drivers-stories-reveal-how-exploitation-occurs-in-gojek-grab-anduber-82689. 21 https://sustainabledevelopment.un.org/content/documents/2754713_July_PM_2._Lea ving_no_one_behind_Summary_from_UN_Committee_for_Development_Policy.pdf. 20

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Current evaluations suggest that digital financial inclusion is well correlated with growth and employment while acting as a vehicle for reducing forms of informality, such as purely cash-based transactions.

Suggested Reading Frey, C.B and Rahbari, E (2017), “Do labor-saving technologies spell the death of jobs in the developing world?” in Chandy, L (ed) The Future of Work in the Developing World, Brookings. Frey, C. B., Osborne, M. A. (2017) The Future of Employment: How Susceptible are Jobs to Computerisation, Oxford Martin School, https://www.oxfordmartin.ox.ac.uk/downloads/academic/The_ Future_of_Employment.pdf. Graham, M, Hjorth, I and Lehdonvirta, V (2017), “Digital Labour and Development: Impacts of Global Digital Labour Platforms and the Gig Economy on worker livelihoods,” Transfer, 23 (20) 135-162. Hal,J and Krueger, A (2015), “An Analysis of the Labour Market for Uber’s Driver-Partners in the United States,” Industrial Relations Section, Princeton University, WP no.587. Healy, J, Nicholson, D & Pekarek, A (2017), “Should We Take the Gig Economy seriously?” Labour & Industry, 27:3, 232-248. Islam, I (2015), “Technology and the Future of Work in Advanced Economies,” Social Europe, April 23, https://www.socialeurope.eu/technology-and-the-future-of-work-in-advanced-economies. Islam, I (2018), “Automation and the Future of Employment: Implications for India,” South Asian Journal of Human Resources Management, Vol. 5, Issue 2. Kassi, O and Lehdonvirta, V (2018), “Online Labour Index: Measuring the Online Gig Economy for Policy and Research,” Technological Forecasting and Social Change, Vol. 137, pp. 241–248. Malone, T.W and R.L, Laubacher (1998), “The Dawn of the E-lance Economy,” Harvard Business Review, September-October. Mckinsey Global institute (2017), A Future that Works: Automation, Employment and Productivity, https://www.mckinsey.com/global-themes/digital-disruption/harnessing-automation-fora-future-that-works. OECD (2017), “Future of Work and Skills,” Paper Presented at the 2nd meeting of the G20 Employment Working Group, Hamburg, 15–17 February. Sundararajan, A (2016), The Sharing Economy: The End of Employment and the Rise of CrowdBased Capitalism, MIT Press. Sundararajan, A (2017), “The Future of Work: The Digital Economy Will Sharply Erode the Traditional Employer-Employee Relationship,” Finance & Development 54, June. Verick, S (2017), “Should developing countries fear the impact of automation on jobs?” East Asia Forum, http://www.eastasiaforum.org/2017/11/13/should-developing-countries-fear-the-impactof-automation-on-jobs/. Weiner, J.M (2016), “Yours and mine,” Finance and Development, June, https://www.imf.org/ext ernal/pubs/ft/fandd/2016/06/pdf/book3.pdf. World Bank (2016), Digital Dividends, Washington DC.