The Other Face of China

Posted on October 7, 2012

Books about contemporary China can be divided into two schools. By far, the most numerous belong to the first, which largely praises China’s rapid and impressive macroeconomic growth since the early 1990s. These groups of academics, businessmen and journalists believe that China’s rise as an economic power will surpass the United States, making them “the world’s largest economy” by 2030. They project that China will not only become the premier economic power, but also become the preeminent military and political power that overwhelmingly determines the terms and conditions of the new world system, replacing the United States in the military, financial and monetary power index to the point of dominating the commanding heights of world influence.

Political and economic analysts vie with fund managers, public relations specialists, economic and business forums , futurists and psychics, along with outright hucksters seeking to land a fat contract with a Chinese investment company or government office keen at expounding notions such as “when China rules the world”, “the post- American world” or “the hemispheric shift to the Asia and the Pacific”, with all the consequences of how that trajectory of Chinese power will impact the rest of the world.

Markets, finance, oil and mineral deposits in Asia, the Middle East, Africa, Latin Americas all are inextricably linked to the need to sustain China’s inevitable leap to the top of the table of power relationships.

The second school of thought draws an entirely different projection and conclusion. Members of the more “sober” view are less numerous and rarely capture headlines in the media and specialty trade magazines. Susan Shirk, a former American diplomat now teaching at a university in the United States, drew a more restrained picture in her 2005 book The Fragile Superpower, in which she sought to assess China’s weak institutional support in the internal structure and reach of China’s elements of governmental power. Others in this group focus on China’s opaque banking system run by the state-backed system with little capacity to develop a robust “red capitalist” financial system to underwrite the burgeoning economy away from the blistering growth in the Eastern coastal area of China, to China’s vast hinterlands in the north and west.

Gerard Lemos, a former British Council official who spent more than four years teaching at the Chongqing University of Technology and Business, has written The End of the Chinese Dream, based on his field experience gauging “the real world” of China’s rise from the ground level, in and around China’s third-largest city and its environments.

Eschewing the broad macroeconomic projections favored by marketing firms, Lemos embarked on examining the dynamics of China’s forgotten poor. Central to his message of getting to the real fate and feelings of the marginalized poor is his use of employing “The Wish Tree” method of assessing opinion among the underclass.

Behind the blinding figures of an eight percent GDP growth rate, the skyscrapers of Shanghai, Guangzhou, Beijing and “the unattractive urban sprawl of Chongqing” highlighting the promise for the emerging 300 million middle class, lies the grim reality of fear, uncertainty and continued abject deprivation of millions of Chinese workers who fear for their health, family well-being and financial support as a result of the Chinese government’s decision in the early 1990s to embark on political and economic reform, and entry to the wrenching and ruthless market-based global economy.

In the 10 years between 1992 and 2002, the government laid off 50 million workers from state enterprises, and another 18 million that lacked the benefits provided by their old jobs. During the same period, there were 400,000 registered cases a year of mass social protests across the country, in some cases involving murder, clashes between urban workers and migrants competing for a living wage. Inequities and injustices among the urban-rural divide also grew sharply, taxing the competence and resources of the People’s Security services and, in some instances, requiring the deployment of the People’ s Liberation Army to contain and suppress violent action by the poor.

Lemos lists a number of issues that arise from collecting data and feelings of those who registered their fears and worries through the “Wish Tree” they signed into. Fear about their future: unhappy families, educational pressures, failing health, prolonged financial insecurity and the dangers of polluting industries.

During the rule Mao Zedong in the 1950s and early 1960s, the Chinese dream consisted of owning a bicycle, a radio, a watch and a sewing machine. Under Deng Xiaoping in the late 1980s and early 1990s, the list consisted of “the eight bigs”: color television, refrigerator, stereo, camera, motorcycle, furniture, washing machine and electric fan. The 2010 China Human Development Report listed “the three bigs”: an education, a house and a car, but noted that finding jobs, access to medical service and attending school also became big concerns.

China’s current problems, albeit on a lesser scale, are a warning to other emerging markets, including: Russia, Brazil, Mexico, Nigeria, India, Pakistan, South Africa, Indonesia, Vietnam and Bangladesh. Growth may be fine for the middle class, but not for the forgotten lower class. As in China, the most challenging political economic issue is the widening Gini coefficient index, which has risen from 0.32 to 0.45 in income inequality, equal to contemporary United States, the most unequal society in the “developed world”. In differing trajectories, China and the US must each address this severe disparity in the monetized banking and financial worlds. Their success or failure in facing this reality, will decide which country remains “top dog” in 2030.

Categories: International

Japan Asserts its East Asia Security Role

Posted on August 6, 2012

Overshadowed by the US-China rivalry over Asia-Pacific security primacy, Japan over the past few years has begun to quietly but firmly assert its security role in East Asia and the Pacific.

Its long-standing alliance with the United States and linkages to the US-Korea and the US-Taiwan security treaties network has given rise to its renewed security presence in East Asia, particularly given the uncertainty over reports regarding possible implications of the ongoing Chinese civilian and military elite relations over the role of the military in relation to politics and party leadership.

Japan’s recently published annual Defense White Paper cites “the worrying influence of the Chinese military in foreign policy issues over the disputed islands in the East China Sea” and “the need to reaffirm the presence of US forces stationed in Japan” against “regional contingencies” and “to bring a sense of security” to countries in the region.

The publication of the paper has received strong criticism from neighbors China and South Korea. While China has attacked the white paper for its gross “distortions”, jeopardizing Tokyo-Beijing relations and heightened tensions in the region, South Korea has issued an official reprimand, particularly regarding Japan’s reiterated claim to the Takeshima Islands, which are also claimed by Seoul under the name Dokdo.

The Japan-China dispute over the Senkaku/Diaoyu islands has given rise to a perceptible nationalist surge in Japan, even as the Chinese military attempt to project its influence within the Chinese Party hierarchy, months before the expected leadership change within the Chinese Communist Party. Tensions are reported to be running high ahead of the 18th National Congress of the Communist Party of China, with the Chinese military’s desire to control the state’s military policy before the October 2012 congress — a forum held once in a decade to decide on party leadership change
at the top.

Meanwhile, Chinese defense ministry officials have tried to assure its domestic and foreign policy constituents that “protecting national sovereignty and maritime rights and interests will be closely coordinated with other departments in conscientiously discharging our responsibilities”.

In recognition that the civilian–military tussle has led to confusion among civilian and military leaders in Beijing, among command-level operational units in the PLA Navy and associated fisheries, as well as para-military forces in East China and South China Seas, the Japanese defense forces have been placed on high, though subdued alert.

Uncertainties regarding East Asia multilateral security policies is compounded by criticism in the United States that the “Asia pivot”, announced by the Obama administration in November 2011, has not resulted in a tangible manifestation that “60 percent of American forces will be deployed to the Asia-Pacific region”.

Several US congressmen and US think-thank analysts have pointed to the continued American deployment to Afghanistan, Pakistan and Iran. All this is in conjunction with uncertainty as to how the retrenchment of the US$450 billion US defense budget over the next 10 years will affect the “rebalancing” of US forces to the Asia-Pacific region, including the US-Japan alliance
system.

Preparing for these uncertainties has added urgency for the Japanese defense forces to quietly but firmly raise its profile in its relations with both US and Chinese forces, which have for so long overshadowed Japan’s security profile in East Asia.

Categories: Defense, International

Redefining the World’s Global Commons

Posted on April 3, 2012

With 5 percent of the world’s population and still producing 25 percent of the world’s GDP, the US continues to dominate international standards in politics, diplomacy, economics, trade, finance and communications.

Even with the current burden of its deficits from the 2007-2008 financial crises, the US’ defense budget of US$650 billion remains greater than the combined defense budgets of Russia, China, India, Japan, Britain, France and seven advanced countries in Europe. Control of the global commons remains in the US’ strong hands.

Defense of the global commons has two dimensions: a strategic-military dimension; including cyberspace, nuclear, sea and air conventional forces and undersea capabilities, and the natural-environmental dimension; including water, natural resources, Arctic regions and climate change.

Like other dominant powers throughout history, the US has sought to prevail over management of the global commons within the context of its national interest, hence the scope and size of the US defense budget.

In 1992, Washington spent more than $450 billion on 700 American bases in North America, Europe, Asia and the Pacific, the Middle East, surpassing the defense expenditures of the next 12 major powers combined. From the Arctic to Northern Europe to the tropical waters of Oceania, the sun never set on the backs of American GIs.

Twenty years later, the United States is spending $650 billion to sustain America’s global leadership over the next decade, even as it phases out $450 billion in spending over the next 10 years.

Part of the reduction is related to addressing US deficits after more than 15 years benefitting from loans extended by Europe, China, Japan and South Korea. All of these countries enjoy the privileges of America’s security assurances. China implicitly acknowledges the need for the US’s “stabilizing presence” – despite its occasional defiant rhetoric and statements of its national interest in the Taiwan Strait, the Korean peninsula, the South China Sea and the Malacca Strait.

The rise of East Asian economies has led Washington into tricky negotiations and to forge new implicit understandings about the cost structure of safeguarding the regional commons regarding international trade, investments flows and political pre-eminence in East and Southeast Asia.

Both regions are subject to the area of responsibility of the US Pacific Command, whose essential role in cyberspace and nuclear and undersea capability remains both intact and unchallenged. The phased reduction of US defense expenditures may reduce America’s near hegemony, but credible alternatives to Russian, Chinese or Indian “spheres of influence” have yet to materialize.

While China enjoys a comprehesive strategic relationship with the US, China is well aware that its investments across the world are secured by US military forces. While US soldiers and marines secure Iraq and Afghanistan, Chinese oil and mineral companies have gained rights in Iraq’s northern region and to mine copper in Afghanistan. China’s access to Brazil’s “Chinamax” superport has guaranteed an adequate supply of iron ore for China’s burgeoning steel industry — yet it is the US Navy’s omnipresent 11 carrier strike groups worldwide that ensure China’s access to oil and strategic materials from Africa and that its worldwide exports to emerging economies are delivered on time.

While it takes two to three weeks for Chinese oil tankers to reach their ports from the Persian Gulf, it is US naval strike groups in the Indian and Pacific Ocean that secure strategic military commons. China may be keen to present the renminbi as alternative currency to the US dollar and the euro, but the risk of imported inflation by loosening its peg to the dollar will force China to consider the security costs of abruptly challenging America’s military primacy. In addition, America’s dominance in cyberspace security over international finance and banking transactions across Hong Kong, Shanghai, Tokyo, Seoul and Southeast Asian countries faces no serious challenge.

In the long run, US management of the strategic-military and the environmental commons will have to be rebalanced with the assistance of China, Russia, India, Japan and other growing economies and markets in East and Southeast Asia. For the moment, however, the terms for a more distributive control of the global commons will have to be patiently negotiated not only by the defense, finance, trade and environmental ministries but also by the chambers of commerces across the world.

Categories: Defense, International