GOOD MORNING FROM LONDON
The purpose of this Column has always been to provide a balance to the welter of
critical and negative information that is available daily in the media about China.
Remember the perspective. China flies the red flag. It is a Communist country and it
is much disliked by governments headed by the US who, looking ahead, see – quite
incorrectly – a world dominated by a China ever keen to compel the rest of the world
to adopt the Communist model of development in preference to the capitalist
Warning bells rang in the major capitals of the world in 1917 when the Bolsheviks
ousted the Kerensky Government. The same bells are ringing with even greater
intensity today as the example of China reaches an ever-increasing audience. Just
one instance is the recent BRICS meeting in Johannesberg. The grouping of Brazil,
Russia, India, China and South Africa will be joined by Saudi Arabia, Iran, Ethiopia,
the United Arab Emirates, Argentina and Egypt as part of an expanded collective.
These six new entrants are among dozens of countries that have expressed interest
in joining the BRICS. Further expansion is inevitable. The world is changing and
organisations such as the United Nations, the IMF and the Groups of 7 and of 20 will
soon encounter strong headwinds.
But back to China and the current storms affecting its economy. China faces
problems and this Column writes about them. Some in the West sees these
problems as a vindication of their predictions that just as the USSR crumbled in the
early 1990s under the pressure to maintain a policy of “guns and butter” and parity
with the US, so China, too, will buckle as its people take their frustrations onto the
streets forcing a change of government. This is a reflection of the enmity in
Washington to China.
One incorrect observation so often made by the West is the alleged inflexibility of Xi
Jinping’s leadership but reflect for a moment on the presence of 800+ Billionaires in
China. The Communist Manifesto and then the writings of Lenin and the well known
phrase “From each according to his ability to each according to his need” focused on
the creation of a classless society. Marx, in particular, stressed the class-based
nature of Capitalism and urged its destruction by the working class to ensure their
And yet in China today the Party, led by Xi Jinping, has given Billionaires their heads
and allowed them to employ large numbers of workers and to make profits. Xi is
following Deng Hsiaoping and has focused the minds of the population on ‘What
Works’. After the fundamental failure of the Cultural Revolution and the consequent
economic stagnation, the priority for the People was their well-being and not their
study of political tracts. This was a massive change from what had gone before and
reflects positively on the creativity of Xi’s leadership.
The Billionaires in China are not the Oligarchs in the USSR. As Jack Ma found out to
his cost, they cannot dictate to Beijing and the Party. Billionaires are needed
because, unlike Party members whose focus is on politics and the construction of
the New China, the Billionaires have zest, imagination and creativity when it comes
to creating prosperity – the priority of the Party – and jobs but the Billionaires know
they have to stick to making money and not get involved in politics. If they do, they
will pay a price and remember the Party stepped in and stopped Ma’s $38bn
floatation in Hong Kong because Ma tried to dictate to the Party. Embracing the
Billionaires and giving them an important role in the economy is an example – not of
Xi’s alleged inflexibility – but of his creativity.
This Column will continue to focus on topical issues and the next Post will examine
growing tensions in the S China Sea as Thomas Shoal becomes another flash point
– how near are we to hostilities and war?
And with Dispute Resolution on the Agenda I will consider Bias and Prejudice in
Mediation – as opposed to arbitration. There are differences.