Tuesday,19 June, 2018
Current issue | Issue 1335, (9 - 15 March 2017)
Tuesday,19 June, 2018
Issue 1335, (9 - 15 March 2017)

Ahram Weekly

China’s new deal

The environment featured prominently at this week’s National People’s Congress in Beijing

Delegates leave the Great Hall of the People after attending the opening session of the annual
Delegates leave the Great Hall of the People after attending the opening session of the annual

Beijing’s skyline was bathed in the honeyed light of a beautiful dawn this week for the annual parliamentary pageant known as the National People’s Congress (NPC) held in the Great Hall of the People in the Chinese capital.

Blue skies are a rarity in this and other Chinese cities, which are often cloaked in debilitating grey smog. The Chinese Communist Party had ordered a clean-up of the skies for the occasion, however, and the lawmakers and dignitaries who descended on the Chinese capital this week were granted a clearer view of the sun and the formerly chimerical moon. 

There was an air of anticipation as the Chinese leadership signalled that the masses must be weaned off unbridled economic growth and focus on less polluting practices. The Communist Party leadership stressed that the focus now would be on greener and cleaner technology, announcing to popular surprise that the country would see its lowest economic growth rate in two decades in 2017.

Meanwhile, the world was watching as more than 3,000 Chinese lawmakers converged on Beijing. 

US President Donald Trump has been baiting China, but Beijing’s response has been muted, with the country now the world’s second-largest military spender. Last year, China set aside a 7.6 per cent uptick in military spending, bringing it to $147 billion.

“The figure marks the smallest military spending increase in seven years and continues a trend of lowered growth amid China’s slowing economy – a sign that the country isn’t trying to outdo America in funding defence in 2017,” observed Eoghan Macguire of the US channel NBC News. “Although China has become the second-biggest defence spender in the world, its investment still pales in comparison to that of the US,” he added. 

Even so, Reuters reported recently that the increase in China’s defence budget of $9.7 billion would move Beijing’s total defence budget well past the $145 billion mark for the first time. The People’s Republic now accounts for more than 10 per cent of global arms sales.

China’s large cities are by and large inelegant industrial sprawls, and America’s post-industrial cities can also evoke disheartening landscapes. In spite of their differences, the countries have much in common. Yet, even as the US has become more isolationist under Trump, China has emerged as a champion of freer international trade, and it has made great strides over the past two decades to integrate itself into the international trading system.

China’s global trade exceeded $4.16 trillion at the end of 2013, and by 2016 China’s total external trade ranked the first in the world.

“China would like to work with other countries to validate the upgrade of the ASEAN–China Free-Trade Area Agreement. We will push forward the construction of the Asia-Pacific Free-Trade Zone, and strengthen trade negotiations with related countries and regions,” Chinese Premier Li Keqiang told lawmakers at this week’s NPC.

“Free trade as we understand it is under extreme pressure,” Michael Every, head of financial markets in the Asia Pacific for the Dutch bank Rabobank, told Guardian Australia this week. “If the US doesn’t run a huge trade deficit, the world trade system as we understand it today breaks down,” Every added.

“Sometimes it is hard to sift the real from the magical in the Trump administration, and bombast appears to be the default strategy of the day. But people should be clear about what would happen if the US actually tried to blockade China from supplying its forces constructing airfields and radar facilities on the Spratley and Paracel Islands” in the South China Sea, US commentator Conn Hallinan wrote recently on the US CounterPunch Website.

“There is no question that China has been aggressive about claiming sovereignty over small islands and reefs in the South China Sea, even after the Court of Arbitration at The Hague rejected Beijing’s claims. But if a military confrontation is to be avoided, it is important to try to understand what is behind China’s behaviour,” Hallinan noted.

Beijing has been building artificial islands on reefs in waters also claimed by other nations in the South China Sea, making its neighbours increasingly nervous. China’s military build-up and projection of naval power has caused concerns in the region, where it has taken an increasingly assertive stance in territorial disputes.

However, at this week’s NPC spokeswoman Fu Ying said that “the US has little understanding of China generally. Every single candidate talked about China during the [US presidential] elections campaign. But all I heard were either old stories or untrue stories. This phenomenon is unnatural and abnormal, especially in a society with a free flow of information,” she said.

Reacting to Western media allegations of widespread problems in China, Xinhua, the state-run news agency, accused the foreign news media of “hype” and suggested that activists were manipulating the press to “smear the Chinese government.”

“The stories are essentially fake news,” Xinhua trumpeted, using a phrase more often associated with Trump.

The New York Times, a paper that Trump has dismissed as propagating “fake news”, unleashed a scathing attack on China’s freedom of the press. “If the Chinese version of journalism, which is really only propaganda, is considered mainstream, it will challenge the understanding of what real journalism should be,” warned Patrick Poon, a researcher for the international rights group Amnesty International in Hong Kong. He was quoted by a China correspondent for the Times based in Beijing.

“All news media run by the party must work to speak for the party’s will and its propositions and protect the party’s authority and unity,” Chinese President Xi Jinping was quoted as saying a few weeks before the NPC.

But “despite the continuing tightening of control of the media over the last three years, Xi is not fully assured that the state media, even the most central ones such as Xinhua and [Chinese TV] CCTV, are fully under his control,” professor at the School of Information at the University of California, Berkeley, Xiao Qiang said.

The fact that the US harbours known Chinese dissidents has long been a bone of contention between Washington and Beijing, and Xi is not one to mince his words. “The Party is the centre, and you serve our agenda. This is much more central now, and it’s being defined for all media platforms, from social media to commercial media,” he told reporters at the NPC. 

The dynamics of the Chinese economy are also changing. The less-developed interior is vying with the coastal provinces to catch up on industrialisation. According to the US magazine Forbes financial analyst Yue Wang, Guangdong Province’s ZTO Express logistics service had 14.3 per cent of the market in terms of the total number of parcels it handled last year, and it is now second only to the Shanghai-based private express enterprise YTO at 14.7 per cent.

China has set a 2017 growth target of “around 6.5 per cent”. It is now the world’s biggest market for industrial robots, with sales growing by about 20 per cent a year. 

As Britain’s Financial Times newspaper has put it, “China’s power struggles create commodity snakes and ladders”. Moreover, “the clash of priorities between currency and growth has roiled prices.” Nevertheless, China may have the upper hand in any trade war with the US.

“China’s factories now compete less on cheap labour and more on advanced technology. China has top-notch infrastructure, a skilled workforce, and factories that thrive on process innovation – the ability to rethink how products are assembled to maximise efficiency and flexibility,” explained the media company Bloomberg in New York, signalling the booming international interest in Chinese economic affairs.

Trump has vowed to reduce America’s $347 billion trade deficit with China. Jack Ma of the Chinese technology and logistics company Alibaba has promised Trump that he will create jobs by linking one million American small businesses with Chinese buyers. All eyes are on the business models that feed off proximity to Alibaba’s headquarters in the southern Chinese city of Hangzhou.

“The bigger players are becoming bigger, while the smaller ones will be eventually eliminated,” explained James Guo of ZTO.

The People’s Republic of China may still be run by the Chinese Communist Party, but the country’s economy is increasingly capitalist.

While state capitalism has not entirely been replaced by market capitalism, the differences between the two are increasingly blurred.

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