The three milestones of China
As I write this, the world is preparing to watch the parade to mark the People’s Republic of China’s 70th anniversary. The parade is expected to feature new armaments in a Beijing with guaranteed clear skies, because the city has been on lockdown for days to ensure good air quality.
This milestone is the first of three major ones stretching all the way to 2049, the centennial of the People’s Republic, with the intervening milestone being the centennial of the Chinese Communist Party in 2021. All the more are people being reminded of Napoleon Bonaparte’s famous injunction, “China is a sleeping giant. Let her sleep, for when she wakes she will move the world.” Napoleon’s era saw the end (in 1800) of China being the world’s biggest economy; by 2030, 19 years before the regime’s centennial, the country is predicted to reclaim the position of being the biggest economy on earth.
Right now, however, China is having a foreign currency shortage. Last Sept. 29, Vice Commerce Minister Wang Shouwen announced the country would open up more sectors of its economy to foreign investors, and leave its policy of “protecting” the rights of foreign companies operating in its shores unchanged. One political observer noted that this year alone, $1.2 trillion of foreign currency debt is due; and that the Belt and Road flagship initiative of Xi Jinping is slowing down, with China-Pakistan Economic Corridor projects halted. This is in contrast to very recent, aggressive posturing by China against foreign corporations and even in terms of its international commitments, such as stating that the Sino-British declaration on Hong Kong is outdated (and thus, by implication, invalid).
It’s Hong Kong, of course — and by extension, Taiwan — that is overshadowing the Great Festival in Beijing. That is, in a political sense. Hong Kong’s stubbornness excites Taiwan, and public opinion in the two places mutually reinforce each other against Beijing. But the problem extends to Macau, too, because it was the sluice gate through which vast amounts of accumulated wealth began leaking out of the mainland; and when efforts to curb gambling junkets there were put in place, tech-savvy Chinese figured out ways to go offshore. This all suggests the “one country, two systems” template, in place since Deng Xiaoping officially closed the chapter on foreign imperial treaties imposed on China in the 1990s, is problematic for his successors.
Even though Hong Kong’s economic share in China’s economy has shrunk compared to the time it was handed over back to China by Great Britain, it continues to play a vital role because of a legacy of colonialism — its legal system, which remains Western in orientation and practice. This gives foreigners the confidence to set up shop there and engage the economy in a predictable manner: The city is where foreign funds are raised for IPOs for Chinese firms. But the existence of the Hong Kong legal system stands as a continuing reproach to what passes for a justice system in the mainland, with its show trials. And as the insistence on individual rights spills over into the streets, it also serves as an insurmountable counterpoint to Beijing’s control over the organs of government in Hong Kong—a fact that subverts Beijing’s efforts to entice Taiwan to reincorporate itself into China.
Because our institutions have a highly underdeveloped — in fact, practically undeveloped — analytical competence when it comes to China, it makes our government (whatever administration is in place) highly incompetent in figuring out how to approach relations with China. The end result is to lurch from one extreme to another — from incautious belligerence to carefree bootlicking — without a larger consensus to temper things, because no consensus exists either in officialdom or among the public.
As it is, the ongoing great gamble on China has collided with China’s own cautiousness when it comes to making commitments to unreliable Filipinos, while what it really wants — support in its crackdown on the drain on national wealth the Pogos (Philippine offshore gaming operators) represent — is unacceptable to the sectors making money, formally or not, from their presence here. In recent days, some shutdowns of unlicensed Pogos took place, but that was a revenue-oriented crackdown, and only marginally, if at all, related to China’s official displeasure over Pogos.