China will change and the world with it – the UK has a decision to make

The transformation taking place in China is beyond any observer’s ability to capture. Clearly we are now entering an era where we will see the full impact of Socialism with Chinese Characteristics – a market economy whose development is going to be managed by the Party and Government to produce an economy not seen anywhere before.

 

Deng Xiaoping called the  essence in 1984 when he spoke of the unique ability of a single party state to move the progress of the economy.

 

Xi Jingping has been preparing for the big transition for the last five years and is now pressing the button for a change of huge scale to be achieved in the next 5-10 years. The move of Party heavyweights into the front, and public, line was the signal for the big change. The recent third Plenum showed how vast the scale of change will be. The state and the economy will undergo rapid change to move towards fast progress and the sharing of the wealth of China in a new way.

 

The move of Wang Qishan to be Vice President heralds a move of China in the world. The challenge of the USA on tariffs, the Kim-Trump talks, are all small signals of a big change in the world ahead. China is going to move fast to help build a world where its role as one of the leading nations promoting a concept of a shared future, is going to be felt in a positive way. China and the World is a new era of global development where China will work with other major nations to achieve global sustainable development, which means growth and stability for many. Some may be foolish enough to try to undermine or stop this. But China is only proceeding after extensive tests and preparations for the unexpected. It does not mean they will succeed but the record of the last 40 years is truly impressive.

 

BRI and China’s economy can continue to provide the main part of world growth well into the middle of this century, and that is the lifeblood of the West. It is for us to manage our interests and handle change. It is too late for us to try to roll back change. Now our challenge is to ensure our role.

 

The term changes for the President of China are to enable him to make this change happen.  It will take up to 15 years to manage the change and get it settled. He will begin change when it is settling down and new leaders emerge with the experience of the new ways. The existing leaders will manage the change not the next era. They will manage the next generation of leaders into the new era, and not abdicate early. A new leadership will emerge about 2027 is my guess, and take office in about 2032. Though the form of Party doing policy and Government doing implementation may have changed by then.

 

Many Western nations have been taken by surprise in the transformation of China in the last 40 years. It is nothing compared to the next 40 years. By 2049 China will be unrecognisable just as it has been since 1978. China’s wheat crop is over 600 million tons, whereas it struggled to get up to 300 million tons in the late 70’s. Moving 700 million people out of poverty into urban life, stimulating a new manufacturing industry in China, and a new service sector, obscured China transforming its agriculture from small units to large scale modern agriculture. It could only be achieved by moving almost 1 billion people off the land. It is a spectacular achievement. Just think of how Africa might change.

 

Yes the 700 million is amazing and unique. But the 1 billion is more so, and the doubling of wheat and other crops on a smaller land space is even more incredible. This is the result of the first Plenum held after each 5 yearly Party Congress. It is agriculture that has been the first priority. Feeding the people.

 

So when we begin to grasp the scale of change for the next 40 years, we can see that this is not the first phase of achieved change. It is the second. We can probably conclude that their vision of where to get to by 2049 is well thought through, tested and very likely to be achieved.

 

If Western nations want to help their businesses exploit the opportunities properly then they need a whole new approach to China. A Ministry or Commission of Asia or China is probably needed,  led by people with objectivity as their first priority, will be required. Until you remove the blinkers of prejudice you will not be able to see. Until you know what is happening you cannot  position yourselves to address the phenomena on the way.

 

Is there a huge danger mounting in the East that will threaten our very existence and lives? Only if we continue to be blind. China is clear on its priority – to achieve a proper and reasonable standard of living for its people and to help other nations from its borders outwards, to share with China in that. China does not seek to be a superpower – that does not last. China may appear like a superpower at times during its journey , but it has philosophically rejected that destination. It does not last; history shows that. History is the great resource for China’s future planning.

 

The USA will try to maintain its old ways to lead the world. China will not be distracted by them. China will work hard, with WQS working with Xi, to manage that relationship so the USA does not feel undermined, but it does allow global change from which it can benefit. The USA has more resources to understand China than any other nation. Its companies are more alive to global opportunity and change than any other nation. The USA can, and probably will, benefit from China more than any other nation.

 

European nations and companies are frustrated at their inability to progress their China agendas. It is their inability to see the wood for trees that is the problem. The UK cannot see BRI and changing China within a structure that sees beyond a world fast disappearing. Brexit is a signal of the UK finding its first modern marriage to leave the EU, feeling uneasy in the changing world. The problem is not the EU, it is the failure of the marriage to be used to manage change and the growing of the children. The new world is emerging and the marriage is a suitable base, but the participants have to grow up , accept change and mature. The leaders of the EU and the UK are unsure which way to turn. Squeezed between the USA, Russia and China, Europe is still the key part of the world. It is no accident all world wars have been fought here.

 

Europe needs to find its role and focus. The breakup of the Soviet Union created a new Europe where former soviet nations were focused on American – ie Nato – protection. The UK has recognised that. The EU has not. Europe is two blocks. It needs to find how to become one again. The euro and federalism is a challenge to the USA and resisted with Brexit.

 

If Europe does not rebuild then it will fail to adapt to the emerging changes of China.

 

The UK is best placed to prosper from the worlds change if it adds a third dimension to its existing two vantage points. No nations lives within the USA and the EU like the UK. We are abysmal in understanding China, however. We had the tools to understand China and we allowed them to slip in moves to contain the new within old ways. We are still stuck in 19th century thinking.

 

We have to transform to bring our China skills to the level of our USA and Europe skills. We can then participate in China. We can then balance our relations with the USA and Europe. For now we are 33pc blind. And that 33pc is the key 33pc for the next 30 years.

 

Our challenge is not to cast ourselves into Brexit, that may happen in some form. It is to become the leading nation understanding China. It is a huge task which requires a skilled set of leaders on China. Was it Winston Churchill who enabled us to move into a new era with the USA? Was it Edward Heath who enabled us to move into a new era with Europe?

 

We need now a leadership who enable us to engage and prosper with China and lead the world in comprehending China. We are lost in potential conflict with Europe and Russia. We can only manage the new world by embracing China, while being realistic about the risks that brings. We can do that safely and without losing the USA or Europe.

 

China does not exist to help the UK. It is for us to have a secure and mature understanding and relationship with China. If it is too open and naïve we will be eaten. If it is too protective and insular we will miss the train. No nation in the world has the experience in this era that the UK has. But we must start to look beyond Moscow and Brussels and lead the world on China. We cannot be too open but China will respect our ability to protect our national interest even while trying to circumvent it. We must be focused and resilient.

 

If we manage things right with China then we will be able to lead on Africa and other key parts of the world. Why? Because the deep changes in the world are being led from China for the next 30-50 years and we can help shape outcomes effectively if we really get involved. This is what the UK did in the 20’s and 30’s, and the 50’s with the USA, and in the 60’s and 70’s with Europe.

 

The man from Beijing on Africa was here last week and no Minister even knew. They did not meet him. We have little idea of what China is going to help Africa become over the next 30 years. Europe, then North America, then Asia experienced successive Industrial Revolutions which collectively give us the modern world. The next one is Africa. We are blind to the conductor and the shape and scale. We let the man on Africa from China come and go. Nothing is more descriptive of our challenge than that picture.

 

Brexit is a euphemism for the realisation that the UK has lost its global pioneering. Through China we can find it again.

 

But first we need to understand China.

 

Just my thoughts

 

Stephen



Categories: Economic policy, Econonomics, News

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