To understand China and its policies is to understand its trajectory.
We live in a world of now. We see what is happening and what people do about what is happening now. Be that individuals, companies or groups or nations, we are used to trying to understand what they are doing now about what is happening now.
China is very different.
It is not just about history. They do spend long periods of time analysing history, understanding history and researching how others have reacted to challenges.
But it is about what some people refer to as their long term approach.
One hears it said the Chinese think in decades and centuries.
In some ways that is very true.
The Chinese think deeply about the future, where they would like and can get to, and then, on the basis of research and experimentation they move.
There is a classical fable of the foolish old man who moved the mountains, a story from 2400 years ago.
The mountains obscured the needed sunlight and presented serious obstructions. So the old man resolved to move them. He told his sons they would start digging. Many scoffed at the ridiculous task. But over generations they did move the mountains. Some scoffed. But they started moving it and eventually, after generations, they did.
Life is not made of such small ambitions and moving physical objects, but China has set out on a course to move the mountain.
Starting in 1978 from a country confused by the Cultural Revolution, but unified and organised, they used a plan developed over two or three decades to transform this backward and poor nation into a nation of reasonable or modest prosperity.
Deng stated that clearly in 1978. We will become a moderately prosperous socialist nation by 2049 in its first stages of socialism. Most foreigners dismissed this as making a passing acknowledgement of China’s past commitments to Socialism. In fact it was guiding everything.
Of course his modern interpretation of socialism is not something we could then, or even now, understand as we sit in a world gripped by rhetoric and simple meanings of words. Socialism is a word of abuse in some nations. Moderate prosperity would never be a term used by a western politician seeking election – too modest a target.
But for China each word had meaning
His words meant everything. They came from decades of experience and thinking and planning. They used Chinese traditional thinking mixed with Marxist analysis, and produced a modernised blueprint of China. A modern economy that provided for the growth of China but the social justice also to create a modern nation.
China had to produce a modern agricultural system to provide food for its people on a land space a fraction of that of other nations. It had to move 1 billion people off the land into towns and cities. When it began this few had any idea of what was planned, being experimented with and ultimately achieved. It had to replace a feudal, peasant class with a modern agricultural work force using modern large scale methods with entirely new business structures to enable that. Began in 1979 it is over half way through. It is a most remarkable feat, one that took other nations many decades with much, much smaller numbers.
China had to transform a backward industrial sector into a global state of the art industrial sector. While Mao had tried this with the great leap forward, and it had taken other nations from 75 to 150 years, China is well advanced in this, and is now the powerhouse economy of the world.
Transforming this sector into a modern mixed economy, enabling and managing the mixed economy was a huge challenge which started with producing a global exporting giant. It did this within 20 years and surprised the world. Now it is becoming global and modernising and creating a mixed ownership system which is designed to marry the best aspects of private ambition with management of just and shared outcome. The state and the Party will guide a mixed economy through a combination of SOE’s, effective regulators and strategic shareholdings.
China had to build a service sector in a nation where it accounted for less than 5pc of gdp but already has risen above 65pc. China’s service sector scoffed at 10 years ago is already being recognised as an emerging world leader.
The party will develop the long term policies and guide the short and medium term. The state will ensure the economy and society are progressed on a shorter term macro approach.
Regions will replace Provinces as the main forces of social and economic reconstruction into the 21st and 22nd century, provinces moving more towards delivering services.
China had to identify a social set of values and how to share the cake without allowing ideological fantasies of equality to impact the driving force of ambition – a challenge which most nations have failed to cope with.
Within that it had to manage its developing urban population without them becoming mere work forces drugged with alcohol and mass entertainment. It still manages to show the fine traditions of learning and culture that were the hallmark of the soviet inspired systems of Europe, but failed with the failing of that system. It is a flourishing society, although the challenges of individualism and social norms will continue to reverberate for generations.
China will continue to develop its concepts of democracy which will learn from Chinese history and the experience of others, especially those systems of the West which stress consensus, such as those in Northern Europe. It will adopt the Rule of Law to ensure China develops without hiding behind power, and accountability and the rights of the people will be developed into meaningful codes to be unfolded over the next decade or two.
China had to contend with a continent and region very diverse in ways and peoples, and a broad area of Central Asia which had defied Western attempts to control it, and where the Muslim religion had taken over largely from Buddist traditions. China’s policies for its neighbours are covered by a long term plan for its relations with 60 nations and the construction of a system known as the Silk Roads. It is the newer part of the Chinese long term thinking that we have come to see. It is given the name of One road and One belt. Sometimes this means we see it as a modest plan , but it leads to the transformation of the world’s major land mass known as Eurasia. It covers 3.4 billion people.
It is a globally transformational plan. Many new towns and cities, built along the new railway lines and roads, will enable sparsely populated areas to become engines of future growth. China has detailed plans for the development of this vast new region of Eurasia. But it knows that any ambition to own or control, to use it for self-serving purposes, will render China vulnerable to medium term failure.
Within this the Chinese have a view about a new emerging system which enables nations to share prosperity and to seek peaceful development within an arc of peaceful coexistence.
This will undoubtedly involve the globalisation of the RMB but as a step towards a settled international system of exchange rates with flexibility to allow change as events happen.
The globalisation of the RMB is not the end game but just another hill in the many hills that lie in the mountain to be moved. It would seem that it probably involves a regional approach to resetting currencies into a move back to gold based values for currencies to reduce speculation and anarchy in currency markets.
China enables change outside its borders and does not use force to create the change. But its military capability to protect itself is novel, imaginative if provoked. They will not allow others to militarily undermine them, nor fret over the setbacks or the destruction that might be wrought. They will do their best to help others avoid such conflicts and encourage compromise and solutions. But, in the end China will be prepared for trouble and not scared by it.
China knows that moving the mountain will involve pain and hardship, setbacks and joys. But in the end China is on a march from 1978, based in the centuries that preceded it, to a new China that emerges from 2049 that is based on moderate prosperity.
For those who cannot see the direction and the stops along the way, the transformation of China and the world around it, take the time to see the stops they have passed through already and reflect on what is to come.
China is still feared and viewed negatively by many who do not understand it. Their antagonism, sometimes fuelled by simple instincts, is based upon a desire not to lose control, that the different cannot be better.
But they might be unable to see the big picture of where China sees itself going. They scoffed at the suggestion in the late 80’s, as I did, that they could become the world’s largest trading nation. They doubt now their intentions and condemn the Party as corrupt and an evil force. But China is moving forward and it is better we understand their long term plans. Then we can address how best to manage our interests. How global and regional structures can enable our interests to be pursued.
Europe has been a great opportunity for the USA. It has not been a region that has blocked the USA. Eurasia is another such opportunity for the USA and Europe.
China is not just in the now. They are in the long term. They are in the now.
They do not want to change us or make us like them. They could care less about that.
They just want China to develop, be safe and exist in a peaceful world that values sustainable development and then calms to a normal existence based on enough, but not utopia. There will always be challenges and change but their world does not contemplate 12 shirts if 7 are enough. You can have 12 but the economy will not be based upon creating demand for 12.
We can do that. They care less. But that is not their direction of travel although it may look like that for the next 10 years or so.
Not puritans nor do they deny the ambition of enjoyable life, they do not seek equality or to dominate the civilisations of the world. They embrace diversity but it is a diversity that is distinct for each of us.
If we and the Americans want three cars and 12 shirts and to drink and dance, then they care less.
They just reserve the right to go a different way.
If you want to know China and its impact then you better identify where the foolish old man is trying to move the mountain to and for.
It will affect our lives. It is full of opportunities for us if we can grasp them.
We can benefit from their thinking by helping to create the routes to enable this to happen with benefits to us, and structures which enable the development of a peaceful world.
We can move mountains as well. The last 200 years shows that.