In the autumn of 2016, China hosted for the first time the annual summit in the group of 20 leading industrialized countries and major economies, the G20 – 19 countries and the EU. This host role is one of several signs of the country’s growing importance as an international superpower. But it is not many years since the country came out of a century-long wave valley.
- What led to the Chinese downturn in the 19th century?
- What role change are we seeing in the British-Chinese relationship?
- How did China get out of its centuries-long backwater?
- What does China think about globalization today?
China’s long decline came during Western imperialism in the wake of the industrial breakthrough. This breakthrough gave a British-clad Europe and eventually the West an edge that enabled large western countries to dominate the world – including the ancient empire of China. But now the balance of power is reversed . One symptom of this is the rapidly growing Chinese economy, which measured by purchasing power is already the world’s largest (though not per capita). It gives market power . Another is the growing Chinese influence precisely in the heart of the former British Empire. And Brexit seems to be strengthening the connection.
2: China’s centenary downturn
The British were in place in China before the industrial breakthrough, in the port city of Canton (now Guangzou), the only place where foreigners could trade. When the British were about to become ” the workshop of the world “, they made an attempt to open up China in 1792-93. They sent a large delegation with the aim of establishing diplomatic and trade relations, marketing British goods, opening more ports and lowering customs duties. It was more than a regular trade delegation; it was a thrust that could have led the empire westward.
At the head was the experienced diplomat Macartney , who had served in both St. Petersburg and India. The British East India Company sponsored the expedition. The delegation itself numbered nearly a hundred and the accompanying boat crew 600, spread over three vessels.
The range of goods Macartney brought with him, 600 packages, showed the versatility of British business. But something was gifts and preferably meant to make an impression and show the latest in science and technology. The East India Company preferred more of the new textile and metal finished products that the British successfully exported to Europe and America. Macartney had been in contact with the new industrial cities and James Watt, the inventor of the steam engine, and had seen it work, but thought it was too heavy and difficult to carry. As early as the 18th century, however, there were a number of restrictions and prohibitions against exporting machines, against “exporting their technological advantages”. These were first abolished in the 1840s.
The British envisioned easier access to a large market with nearly 300 million people. It was undeniably the multiple of Britain’s fewer than ten. But Macartney carried with him the Enlightenment’s freedom deals and also believed he represented “the first people in the world”. After all, the British also ruled far and wide the populous India, right there “disguised as a merchant”, via the East India Company. The emperor and China refused to establish closer ties and thus indirectly Western technology and science. While the British said they were open to learning, the Chinese responded negatively to King George III’s letter – they did not need this, they said.
Just then, Europe entered the long period of Revolutionary and Napoleonic Wars (1792-1815), and England had other things to think about. But the company was the driving force for a new, but also the unsuccessful advance as soon as the wars were over, the Amherst delegation in 1816. There was no meeting with the emperor. The British found it difficult to bend in the dust for the emperor and bang his forehead against the floor nine times (kowtow), as envoys from Chinese tribute countries did. An echo of such diplomatic ingenuity was the awareness of the lack of red carpet for Obama when he arrived at the G20 summit in 2016. On the way home, Amherst made his way around St. Helena and visited Napoleon, who is said to have said that China was a sleeping giant, as it were wisest to let sleep.
3: China’s thorn rose sleep
China slept too long – and abruptly woke up to new weapons . For the next round, the weapons spoke when China suffered defeats for England in the opium wars in 1840–1842 and 1856–1860. The British wanted China to open up to foreign trade, among other things to be able to sell opium there, but first and foremost to get more balance in trade , as they imported large quantities of tea, porcelain and silk. After the two lost wars, China entered a hundred years of weakness and internal unrest until the Communists’ victory in 1949. Then came a phase marked by the consolidation of the new regime, before it opened up more to the world under Deng Xiaoping .
Although China was not conquered, great powers secured strongholds in the country. England took Hong Kong, and Germany and Russia were allowed to lease areas in the Gulf towards Beijing. China was more or less divided into spheres of influence , a weak form of imperialism . For a long time, the empire had to put up with forced free trade imperialism and open-door politics . This policy was an American initiative around 1900 and aimed at European powers so as not to be banned from trading in e.g. China. The United States itself had opened Japan.
The last signs of the Western onslaught disappeared as late as 1997 and 1999. At that time, Hong Kong and the old Portuguese enclave of Macao were left to the People’s Republic.
4: The state is important
China’s recent history is an example of how planning and state are important to developing countries. Governments will plan the development and use the state to lead and govern it. As in the Soviet Union, state capitalism also became a means in China after the Communists took over. China can show muscle in a more direct way than the liberal Western democracies. There, a relatively free business community will be an independent power factor that balances the state’s power.
Like Japan in its day, the Chinese have paid a high price for their rapid retrieval – of the technological advantages of others – in the form of a lack of democracy and eventually widespread environmental problems. Growing energy consumption has generally followed industrialization and economic growth as a shadow. The strong share of coal in Chinese energy consumption (> 50%) is now being sought by the authorities to steer clear with a comprehensive investment in renewable energy ($ 103 billion in 2015 alone) and other environmental measures, such as natural gas replacing coal.
Even with some privatization since 1979, China is still a centrally controlled one-party state with five-year plans and large state-owned companies. But is now governed as a kind of socialist market economy with a mixture of collectivism and individualism and private initiative.
However, finding a balance between growth and geographical and social equality is not easy. For it is especially the coastal provinces that are leading the way in modernization, while the interior of the country is not characterized by the same dynamics and growth.
Export-led growth has long been central to Chinese economic policy. But when Chinese state- and state-dominated companies spread their capital and operations around the world not unlike other great powers, it inevitably follows politics. The state is often involved in resolving foreign policy conflicts that arise, protecting its own citizens and influencing framework conditions through agreements on customs and other matters. We see Chinese heads of state constantly traveling to ensure the country’s market access. And exports will continue to be important for Chinese growth.
But leaders are also seeking to reduce dependence on exports and stimulate the domestic economy and domestic consumption. At the same time, it is seen as crucial to develop a welfare state, before the median age becomes too high (now 37.1 years). The “elderly wave” – an ever-increasing proportion of the elderly – received i.a. the authorities to abandon the one-child policy in 2015.
5: Into the big ones
In the wake of the oil crisis in 1973, the G7 cooperation group emerged with leading western industrialized countries and Japan as partners. China then saw itself as a developing country and more as a mouthpiece for the world’s developing countries. With new stability after the Cultural Revolution, the People’s Republic instead of Taiwan was accepted as China’s representative in the UN and eventually received some assistance through UN agencies. This was probably not of great importance for the recovery – the strong economic growth from 1980 onwards. It was rather its own, Chinese moves – political and economic – that became decisive – including more openness to and trade with foreign countries.
In 1986, the country became a member of GATT, the forerunner of the World Trade Organization (WTO), which was established in 1995. After lengthy negotiations, China became the 143rd member state in 2001, with a transition period of 15 years. This means that according to the agreement with the WTO, China should automatically be granted market economy status by the end of 2016. Such a status will provide better protection against accusations of dumping prices on export goods, ie against anti-dumping measures from other countries. The US and the EU are now refusing to give China market economy status .
Both the seven, Russia and China are part of the larger G20 group, which has roots from 1999, after the Asian crisis. It was more firmly established after the financial crisis (2008–) because the western countries in the G7 saw a need to involve more countries in the co-operation. The globalization of the economy had in fact involved several countries in the world economy and made it natural to invite them to take part in the work of restoring the world economy after the collapse in 2008. Since 2008, the G20 operates regular annual summits. The following year, the BRICs also started, a group of countries of “emerging” markets, which include Russia and China. China’s new role illustrates both the country’s growth and the global shift to the east and south in economics and power relations. Developing countries, especially in East and Southeast Asia, account for an increasing share of global value creation – of the world’s production of goods and services.
6: China looks west
In a similar way as the British 200 years ago emphasized “the human race” with common interests for civilization and peace, the Chinese in the G20 point out that the world is interconnected, and that global cooperation and globalization are now important . Not least, this was President Xi Jinping’s message at the Davos Economic Summit in January 2017. At the same time, it may appear that the further development of the WTO – and more global free trade – is stagnating. Instead, regional agreements or bilateral agreements are created.
According to shoe-wiki.com, the TPP and TTIP negotiations on free trade zones are US advances against Asia and the EU. But among others, the newly elected president Trump has created uncertainty here, at least around the TPP. However, China has its own plans. The Chinese president Xi Jinping launched in 2013 the so-called ” One belt, one road” initiative t , ref. The historic Silk Road . Through the development of this infrastructure, China will strengthen connections to the west through Asia to Europe and Africa both by sea and land . How will it affect the power relations in the world if China here finds itself together with a Russia that seems to be increasingly rejected by Western countries?
7: The image is turned upside down
The advances also include England, which has become even more relevant with Brexit . Xi visited England in 2015, and he and then-Prime Minister Cameron spoke of a new “golden era” between the two countries. Xi met with Prime Minister May at the G20 summit, and afterwards the British government gave the go-ahead for the construction of the Hinkley nuclear power plant, in which, among other things, the state-owned Chinese nuclear power company participates in the project. And China is already in the British energy sector. A Chinese-owned company is the operator of the British largest oil field. And the state investment fund CIC is part of a consortium that recently invested heavily in the gas grid of National Grid, the British parallel to Statnett in Norway.
In November 2016, Deputy Prime Minister Ma Kai traveled to London with a delegation to negotiate new agreements, the eighth co-operation meeting. As long as the United Kingdom is a member of the EU, a separate trade agreement is not possible. But Britain is the country in Europe where Chinese capital is heaviest . Now they are expanding the Royal Albert Dock in London to a new business center in the heart of the former British Empire. And a Chinese freight train actually set course for London in the New Year.
Chinese companies have even acquired the football clubs Aston Villa and West Bromwich and are heavily involved in Manchester City. And football, in fact, as an old working-class sport, is a product of the industrial revolution. This sport arose when workers had shorter working days and more free time. Behind Aston Villa from 1874 is now Tony Xia, one of the young ambitious intellectuals who after China’s opening to the world had the opportunity to study at prestigious universities such as Harvard, MIT and Oxford and emerges as an internationally oriented modern business owner. It demonstrates how changed the situation is since China once hesitated to enter the industrial revolution.