GOOD MORNING FROM LONDON
THIS COLUMN IS A MIX OF ARTICLES ABOUT CHINA. SOMETIMES AN ITEM FROM THE FOREIGN MEDIA. SOMETIMES A COMMENT ABOUT CHINA. SOMETIMES A FOCUS ON SPECIFIC ISSUES EG; THE GREAT LEAP FORWARD OR THE CULTURAL REVOLUTION.
THE THEME IS MORE POSITIVE THAN NEGATIVE. MORE REALISTIC AND LESS PREJUDICED. THE UK MEDIA IS KNOWN TO BE THE WORST IN TERMS OF COMMENT ABOUT CHINA SO MY POSITIVES HOPEFULLY PROVIDE BALANCE.
I AM A MEMBER OF THE LABOUR PARTY BUT THIS COLUMN IS NOT PARTY POLITICAL.
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#1 CHINA ANNOUNCES $1.4TN FISCAL PACKAGE
THE FINANCIAL TIMES
“China has announced a Rmb10tn ($1.4tn) fiscal package to bail out local governments and help shore up its faltering economy, as it braces for increased trade tensions with the US under Donald Trump.
The long-awaited fiscal plan is one of the biggest to target the country’s troubled local authorities, but it disappointed investors expecting more support for flagging household consumption in the world’s second-largest economy.
The measures announced on Friday by the National People’s Congress, China’s rubber-stamp parliament, follow a monetary stimulus package released in September that was Beijing’s biggest since the coronavirus pandemic.
As part of the bailout, Beijing would authorise local governments to issue bonds over three to five years to restructure most of an estimated Rmb14tn in “hidden” or “implicit” debts, finance minister Lan Fo’an said in a rare press briefing at the Great Hall of the People in Beijing.”
GRAHAM PERRY COMMENTS;-
The World knows that China has been wrestling with the fall out from past high levels of indebtedness – particularly in the property sector. The reaction to China’s problems are revealing. Critics and opponents of China are gleeful believing that the China surge – even the China miracle – is over; the Communist Party is failing; problems are mounting that spell the end of China’s post Deng Hsiaoping experiment. China is falling apart and the leading role of the Party has been fatally undermined. That is the narrative of the hostile anti-China sector – everything is going wrong.
Time will tell whether the prophets of doom are proved right. For the present China is embarrassed. Things have gone wrong. Mistakes have been made which affect the pockets of the people. The Party will have lost some of its allure and internal critics will be seizing the moment to force the Party to change direction and for Xi Jinping to be called to account.
But rumours of the Party’s demise are premature. The history of the Chinese Communist Party shows a significant ability to learn from mistakes and to make changes without tampering with the basic political model. It is much more likely that the Party will emerge stronger rather than weaker. This is not mere hopes but realistic conclusions based on China’s past record.
China bounced back from the disaster of the Cultural Revolution – a much greater threat to the leading role of the Party than current economic problems. China’s leadership met the needs of the people and created prosperity that replaced poverty. The Party has accumulated considerable experience – not simply from 1979 or from 1949 but all the way back from its creation in 1921. It has a record of adjustment, correction and improvement. This is not idle indulgence. It is based on concrete review.
But time will tell. Don’t bet against the Party. It is the most experienced political body in the world.
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#2 MORE VISA FREE VISITORS TO CHINA
SOUTH CHINA MORNING POST#
“For the pandemic years, China was effectively closed to foreign tourism, its tight controls on quarantine and isolation staunching the flow of visitors from abroad. These days China appears to be trying to make up for lost time as it seeks to revive still flagging visitor numbers and bolster international relations.
Since Friday, nationals from South Korea, Norway, Finland, Slovakia and five other countries have 15 days’ visa-free entry for business, tourism, family visits or transit.
China has been easing restrictions on foreign visitors to help provide a boost to its struggling economy and to promote people-to-people exchanges to counter strains with the United States, Europe and some Asian neighbours.
The special treatment in some cases coincided with warming relations. Slovak Prime Minister Robert Fico, who met President Xi Jinping last week, welcomed Chinese clean energy investment and expressed a willingness to join a group led by China and Brazil seeking a political settlement to the Russia-Ukraine war.#
GRAHAM PERRY COMMENTS;-
A much under-appreciated difference between the experience of the USSR and of China is the role of tourists. There was no tourism to the USSR in the years 1917 to its fall in 1990. A few select foreigners were invited by Moscow but no people-to-people visits took place.
For many years foreign tourists have poured over China and tourism has offered two significant advantages – first, hard currency income as tourists spend money in China as they travel the length and breadth of the nation. Secondly, the tourists returning home talk about their visit and promote others to make the same trip. Tourism becomes an advert for China – its parks, its restaurants, its trains and its increased focus on comfortable travel, sightseeing and indulgent eating.
Critics of China tend to be mechanical in their thinking. They start with the Soviet experience and look for parallels. To an extent that is understandable because the USSR and China were/are experimenting with a new system of society and people experience. But the differences are more significant than the similarities. China is not the USSR Mark 2. China is quite different for a number of reasons – some historical and some practical. To absorb the true significance of China it is necessary to view China through the prism of China and not that of the USSR.
Easing visa restrictions is a big opening-up step by China. It is tourist friendly and is welcomed by the Chinese who are keen to show off their life style to puzzled and inquisitive foreigners.
The situation was quite different in 1965 when I made my first visit to China – eight weeks. Tourism was restricted to a few. Hotels were not many. Travel was not easy. Cycles were everywhere and cars almost non-existent. China lived at ground floor level. The choice of clothes was few. Just a handful of restaurants and lots of famers carrying produce to the cities for sale.
The changes have been vast and this leaves its mark on the people who know they have achieved real progress. Poverty has been eliminated. China wants the world to view China so tourism matters. Life is not only about government-to-government contact. People-to people contact matters just as much. It is against this background that the easing of visa regulations makes a considerable impact.
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#3 LARRY ELLIOTT – RETIRING ECONOMICS CORRESPONDENT IN THE GUARDIAN
“Trump’s impending return to the White House highlights a fourth lesson from the past 36 years: the world’s economic centre of gravity – symbolised by the emergence of China and India as forces to be reckoned with – has moved from West to East from North to South.
To be sure, China has some deep structural problems, but it has lifted 800m people out of poverty since the late 1970s, has developed expertise in hi-tech manufacturing, and poses a bigger threat to US hegemony than the Soviet Union ever did.”
GRAHAM PERRY COMMENTS;-
When looking at China do you take the narrow and limited focus of a moment in time or do you step back and review the country’s development in the context of time – decades, generations, eras?
In truth you need to do both. You need to see the changes today but more importantly you need to see the perspective from yesterday. A detached, objective analysis is required with all countries but especially with China because of the binding commitment entered into by Deng Hsiaoping in 1979 to convert China into a “prosperous country” by 2049 – the 100th anniversary of the founding of the People’s Republic of China in 1949.
Let’s start with the problems and the negatives and as Elliott observes “China has some deep structural problems”. You get nowhere in life if you do not correctly assess the present and China does have problems. The Property Sector’s bankruptcies has identified some core problems which affects the well-being of the people. Some of the people will be very unhappy and use the crisis to consider alternative systems of government – the dismantling of the overall power of the Party. There will be others who have suffered financial setbacks who will look to see if the Government can respond.
Only time will tell but China has been here before – the Cultural Revolution presented the Government with far bigger problems than those that exist today. There is confidence – in China and within the international financial community – that the Party will emerge stronger and wiser from the upset caused by excessive indebtedness in the property sector.
And then the focus turns to China’s achievements which Elliott readily acknowledges and the consequence of China’s progress leads to the fundamental geo-political challenge of the modern era – the threat to US hegemony. This is the number one over-arching issue of the present day. China is rising and the US is receding. The issue is not whether China will follow in the footsteps of the US and become the new Superpower. It won’t happen. China has made clear repeatedly that it will never become the #1 military power – China has just one military base overseas (to service its merchant fleet) against the US’s 800+. You do not make yourself the world’s dominant military power on the basis of just one overseas base.
The issue is not China but the US – how will it react to its increasingly apparent decline. “Go for broke” with a final throw of all its military dice and thereby condemn the world to all out War or will saner voices prevail within Washington?
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#4 THE IMPORTANCE OF CHINA’S SETBACKS
SEE CHINA POST #537
In China Post #537 I stressed the importance of reviewing the negatives in China’s experience. Some people suggested I was prejudiced even “letting down China”. Why focus on the bad news when China’s achievements since 1949 show good news? Talk up its good news and leave its opponents to focus on the bad news.
This is an incorrect approach. It is unsustainable. It is important to confront what has gone wrong when bad things intervene. They are part of the crucial experience of development. Critics of China gleefully talk up the negatives and that is to be expected but it is the emergence from the negatives that is China’s key story. What were the lessons of the Great Leap Forward, the Cultural Revolution, and the Tienanmin Deaths? They happened. They are part of China’s experience. They matter and people who are excited about the developments within China need to embrace the negatives as well as the positives.
So how did the Gang of Four take power? Did Mao facilitate their rise to power? How bloody was the Cultural Revolution? And how close were the Party to losing their leading position?. The short answer is very close because the Party had presided over a period of chaos, confusion and vicious attacks and counter-attacks. China went through a very gruesome stage in its history.
Mao was genuinely concerned that China’s younger generation was becoming soft, non-political and disinterested in politics. He decided to stir them into action. This was a mistake. Confusion, chaos and mayhem resulted and in the intense boiler heat of political attack and counter-attack China was stymied by a rash of self-indulgent challenges and recriminations. No question – Mao carries considerable responsibility for the negatives that damaged China during the ten years from May 1966. Does that mean that Mao is condemned root and branch? No – for this reason. Mao was at fault and carries major blame for the Cultural Revolution. It was a Big Negative. But there is a Big Positive as well for which Mao deserves credit. He did lead China successfully during two Wars for which he deserves – and receives – credit. The Civil War against the KMT and the National Patriotic War against Japan.
All leaders need to be reviewed and re-assessed. Recently in the UK there has been new comment about the role of Winston Churchill. Was he a Plus or a Minus. He is respected even revered for his key moment of leadership in World War II when in May 1940 he stood firm and refused to negotiate a peace deal with Hitler via Mussolini which would have amounted to surrender. It was a big moment in UK history and Churchill stayed strong as the Nazi forces through their full military might at the cities of the UK.
But Churchill has negatives as well in his career – the Dardanelles in World War 1; his support for the invasion of the new Soviet Republic in 1919; his role as Chancellor in the General Strike of 1926 and his refusal to entertain Indian independence. As with Mao, there is a judgment to be made and the balance lies in Churchill’s favour because of his leadership in 1940 and the eventual victory over the Axis powers – Germany, Italy and Japan. For the Chinese, Mao’s role in leading China from the hills and the fields of agrarian China from 1927 to the creation of the People’s Republic in 1949 tips the balance in his favour – the failings of the Cultural Revolution notwithstanding.
In future issues there will be comment on the Great Leap Forward in 1959/60/61 and the Tiananmen Deaths of 1989.
