In this occasional column I will be sharing with you insights from various sources on matters having to do with China’s changing relationships with the world. This inaugural column presents thoughts from Kevin Rudd, former Prime Minister of Australia, on political forces at work within China; articles from the McKinsey Global Institute pointing out the inevitability of Asia’s global leadership and the wisdom of greater engagement with China; a short video that presents a balanced summary of the Belt and Road Initiative; and a commentary from Brad DeLong, former Treasury official in the Clinton administration, offering America lessons from British and Dutch history, on how to accommodate to a rising economic power.
In “What’s Next for China’s Political Economy?” (Project Syndicate, August 2, 2019) Kevin Rudd reminds us that “Xi, too, will face a “re-election” challenge at the 20th CPC Congress in 2022. Despite having abolished term limits for the Chinese presidency, he will be feeling significant political pressures of his own.” Xi knows that “for the CPC to fulfill its national mission, it must achieve two fundamental economic objectives. The first is to generate sufficient growth to boost living standards and sustain employment opportunities, thereby entrenching the party’s long-term popular legitimacy. The second objective is to enhance China’s national economic capacity so that it can defend its core interests and bolster its global standing and influence.”
Rudd tells us that the CPC has developed a five-prong strategy to respond to China’s growing crisis in private-sector growth, including policy measures to rekindle private-sector growth and restore business confidence; liberalizing interest rates, changing the exchange-rate regime, and increasing foreign participation in China’s financial-services sector; embracing reform of economic institutions; universalizing trade, investment, and other economic reforms that were previously offering just to the US; and economic stimulus via tax cuts, packages to stimulate consumption, and fresh infrastructure investment.
The McKinsey Global Institute paper, “Asia’s future is now,” by Oliver Tonby and others (July 2019) notes that “Asia is on track to top 50 percent of global GDP by 2040 and drive 40 percent of the world’s consumption, representing a real shift in the world’s centre of gravity.”
“The question is no longer how quickly Asia will rise: it is how it will lead.”
The burden of a second McKinsey Global Institute paper, “China and the world,” by Jonathan Woetzel and others (July 2019), is that “The relationship between China and the rest of the world is changing, and a great deal of value could be at stake depending on whether there is more or less engagement.” This study warns that businesses must adjust to great uncertainty in the times ahead.
“What’s happening with China’s Belt and Road,” is a two-minute Youtube video from the Center for Strategic and International Studies (CSIS), Washington DC, July 30, 2019. It offers a fair-minded summary of the Belt and Road Initiative, from an American point of view.
“America’s Superpower panic” (Project Syndicate, August 12, 2019) is Brad DeLong’s advice to America’s leadership: “History suggests that a global superpower in relative decline should aim for a soft landing, so that it still has a comfortable place in the world once its dominance fades. By contrast, US President Donald Trump's incoherent, confrontational approach toward China could seriously damage America’s long-term interests.” ….
… “In addition, [the leadership] should read “The Sources of Soviet Conduct,” the 1947 article by US diplomat George F. Kennan that advocated a US policy of containment toward the Soviet Union. “Three of Kennan’s points stand out. First, he wrote, US policymakers should not panic, but recognize what the long game is and play it. Second, America should not try to contain the Soviet Union unilaterally, but rather assemble broad alliances to confront, resist, and sanction it. Third, America should become its best self, because as long as the struggle between the US and Soviet systems remained peaceful, liberty and prosperity would ultimately be decisive.”
The ABCF mission is to build a deeper understanding between the Chinese people and Barbadians and Caribbean people from all walks of life. The association’s focus is on personal experiences, people-to-people contact, cultural exchanges and exchanges of ideas, and the facilitation of travel, business and study. From the outset we aim to learn from and build on the experiences of the Caribbean and China, and to develop mutual understandings and support that will be to the benefit of both sides.
