China and globalization

Dr Yu Jie

Good evening, ladies and gentlemen. Happy New Year to all of you and welcome back to Chatham House. I’m Yu Jie. I’m a Senior Research Fellow on China, with the Asia-Pacific Programme. Now, the topic today is China and Globalization, a huge topic today, and we have three star list speakers that join with the panel.

Now, nearly 50 years ago, the United States President, Richard Nixon, went to his icebreaking trip to Beijing, has really opened a door to People’s Republic China in the midst of the Cultural Revolution. Now, almost 30 years after, that China’s accession to the World Trade Organization has really helped the country to become the world’s second largest economy, which is not harnessing China’s global outreach with the so-called liberal wealthy West, but also China begin to – intended to position itself as being the leader of the Global South.

The subject we discuss today is also actually shaped by the ongoing COVID pandemic. Some may even question that China perhaps now entering a phase of not globalization, but actually de globalization, decided shutting its door rather than open – rather than embracing globalization with open arms, as Beijing did 20 years ago, since it joined WTO.

Now, joining with me today to discuss this huge subject are Joanna Chiu, and – who is the Author of the Book “China Unbound: A New World Disorder,” and she also serve as the, currently – as the Journalist at Toronto Star, the Canadian newspaper. And he – she also cover Chinese politics with Agence France-Presse, back to – I think back to five years ago, and she also lead the org – lead the initiative that encouraging more female commentators to commentating on China.

Now, also another familiar face in here, Lord Jim O’Neill, and we all familiar with him and he is our Former Chairman of Chatham House and remain as a member of the Panel of Senior Advisors to the – in this institute. He’s also the creator of acronym BRIC and formerly, he’s served as the Commercial Secretary under Prime Minister, David Cameron, and Chief Economist of Goldman Sachs. I mean – and, also, a distinguished fan of Manchester United, and Jim, I hope I got it right this time. And do sincerely apologise, because I got it wrong in – before the event. Now, I hope you accept my apology.

Now, last, but not least, we also have a Professor, Xiang Lanxin, who is the Professor of Emeritus of International History and Politics at the Geneva Graduate Institute of International and Development Studies. And he was also the third Henry Kissinger Chair of Foreign Policy and International Affairs at the Library of US Congress, with numerous publications and his latest book, written – published in 2019, named as “The Quest for Legitimacy in the Chinese Politics: A New Interpretation.”

So, without further ado that I’m going to inviting the three speakers and join with me to discuss the subject today, and as I said, today’s event, it is on the record, so it won’t be held under Chatham House Rule. And if you’d like to tweet the event, you can #CHEvent. Now, Joanna, the floor is yours. I guess you’d like to introduce your latest book, China Unbound.

Joanna Chiu

Yeah, thank you for inviting me to this panel. I’m looking forward to the discussion of speakers. You know, China and globalization and how China might have a bigger impact as it becomes, possibly, you know, a world superpower, is a really broad topic, and my book, I set out to, kind of, use a more journalistic lens to help people, kind of, get a sense of the on the ground realities, exploring this topic. So, I went to countries like the US, Canada, obviously where I’m from. In Europe, I went to Italy, Greece, Turkey and I also drew from my travels in Australia and my seven years reporting on the ground in Beijing and Hong Kong and across China. So, really using case studies and, you know, people with, actually, vested interests, whether they’re in business or whether they are, kind of, pulled into these conflicts and discussions because, perhaps as a Writer or an Artist or a student, or an international Chinese student, they receive pressures from the Chinese state, even if they’re living globally.

So, I really want to try to inject some nuance into these conversations, because the subtitle of my book, “A New World Disorder,” is not just placing blame on the CCP or China’s Government. It’s really looking at what Western societies and countries have done or have not done. You know, everywhere I went, I was surprised that, you know, leading experts in their fields were really frustrated at what they see as a lack of China knowledge in decision-making roles in their countries, among policymakers. And that’s one of the key reasons why when we see, kind of, geopolitical conflicts of China, often, the messages are quite muddled. Or say – you know, there are so many examples during the Trump administration, so many just falsehoods that were, you know, said by senior leaders, including the President, about China, calling COVID the ‘Kung Flu’, you know, the President saying that, basically, he thought “All Chinese international students were spies.” And I think that, kind of, you know, pernicious, kind of, loose grappling with the facts on China, it really doesn’t serve many goals that people say they want to achieve. It, kind of, leads to this state of, kind of, disorder and misunderstandings and it, kind of, stokes further nationalism in China.

So, when it comes to understanding how China might, you know, govern, even though I argue that it really doesn’t seek to be a colonial power in that traditional sense of the word, I think I try to do what I did when I was a Correspondent in China, which is to try to get as many primary sources as possible. So, one of them is a state council paper, where they talked about “Beijing’s vision for the New World Order.” So, I quoted from Vanderbilt. I can pull it up here. So, they talked about democracy, unmanned nations in this paper in 2019, where China wanted to “rise,” actually, “as a leader among democratic nations.”

But the word ‘democracy’ in its vision is not that each country has a democratic electoral system, but that, regardless of regime type, whether you’re authoritarian or a monarchy, a democracy, you have an equal footing on the world stage and other countries don’t have a right to interfere with your internal affairs. So, you know, those – that kind of phrasing is very familiar to many of us, because, you know, any time there’s any pushback to human rights crackdowns in China, you know, Liu Xiaobo, the Nobel Peace Prize winner, being incarcerated, Beijing’s response would be, you know, “You should not – other countries should not, must not, meddle in our internal affairs.”

So, this – it’s this idea that, actually, China is proud of and wants to champion as a so-called harmonious new model of international relations, you know, where every country respects each other’s political systems. And it sounds a very nicey slogan, the win-win co-operation in global dialogue, but actually, it’s – I find that it’s hypocritical, because concurrently, you know, growing up in Canada a member of, you know, the immigrant community, originally from Hong Kong, back in the 90s, back in the 80s, there were lots of testimonials of people, like Canadian-Chinese Journalists, saying they were starting to receive pressure from sources in China, like, on media owners, to try to self-censor what they were saying, what Columnists and Radio Commentors were saying about what was happening in Beijing. About the aftermath of the Tiananmen Square crackdown, for example. So, while China is saying, “We must not interfere in other countries,” it’s been trying to influence international community.

But another part of that I try to explore is justified, because members of the Chinese diaspora, even if they’ve lived overseas for generations, people I know who have actually never set foot in China before – like I, myself, and my family, visit Hong Kong very frequently during my childhood, but I’ve – actually didn’t visit mainland China, Shanghai, until I think 2008/2009. So, I, personally, don’t feel, you know, Chinese, but the idea is that if you have some Chinese blood or background, you’re, kind of, fair game. And reasons for that, I explore in the book, are quite complicated, because you know, Beijing, the United Front programme, really sees members of the international Chinese diaspora, is disproportionately influential. Both influential on conversations about China globally, as well as potentially influential to domestic Chinese opinion. Looking Chinese, perhaps speaking Chinese, they’re worried that we can – our ideas that can affect people living in China, more so than someone who, you know, looks as – like a stereotypical Westerner.

So, those, kind of, give some of the layers I, kind of, examine in the book. There’s, like, you know, a lot of complexity. It’s hard to sum up, but just to end on some comments on concerns over The New Silk Road and the Belt and Road project, which is not our focus, and which is why I visited some of the more economically struggling countries in the West, in Europe, Italy and Greece in particular, because these were the countries that generally were the most enthusiastic about signing up for the Belt and Road project. Greece early on, that wasn’t a surprise, but actually, Italy surprised its allies, being one of the first major European powers to sign a MoU on the Belt and Road.

You know, people like Macron, you know, back then to Angela Merkel, kind of, pushed back against that, because they felt Italy was jumping on to try to gain these benefits from Beijing, without waiting to act as a negotiating bloc with its EU allies. And the context of that in Italy, with this new coalition government that was taking over a very debt riddled country, speaking of sources there, it seemed like this new government really latched onto the idea that working with China, increasing relations with China, would fix, basically, a lot of Italy’s internal economic problems. You know, the Economic Minister at the time, he would feed nuggets to the press saying, you know, “This factory might be struggling, but the Chinese could take it over,” or insinuating that there were deals in place for Chinese state-owned companies to take over all sorts of ports. And you know, this was seen as not – elsewhere in the world, suspicious or, kind of, nefarious, but really welcomed as, really, almost like a lifesaver, that Chinese money was going to come. So, I went to Italy to investigate these places. I went to some of these ports that were rumoured to, you know, soon be Chinese, and a lot of it was just fluff. There were no deals in place. A lot of it seemed to be exaggerated.

So, I think when it comes to ideas around the world about Chinese economic power, certainly, the Belt and Road seems to have endless resources, but a lot of it, it’s kind of – there’s some proactiveness among Western powers, who are so enthusiastic about what this means, or signing on and there’s concerns about the Belt and Road. Some of the investments not having some of the checks and balances that, you know, World Banks might have, or the EU as a lending source. But really, I think a part of the conversation that, you know, that isn’t as much discussed, is that, you know, countries are really enthusiastic about this funding source and it’s not as if China is just imposing its wealth, forcing these countries to accept deals for a port takeover or a highway refurbishment.

And the question I’ll just end with in Greece is that Athens twice – from 2017, at the United Nations, you know, after China did actually – you know, Greece is interesting, because a Chinese state-owned company did takeover its main port, the port of Piraeus, as well as another state-owned company taking a stake in its electrical provider, the State Grid. So, people wonder whether, out of gratitude, that’s why Athens at the UN, it never having done before, blocked two human rights criticisms of Beijing. In one case it was the first time the EU, as a group, tabled and discussed and failed to pass such a, you know, a comment on Chinese human rights situation.

So, I’ll just leave it there. So, you know, my work, really, talking to different people and stakeholders, tries to look at what the West is doing, the discourses in the West, how it contributes and how it often simplifies and we’re not looking at if we’re worried about the United Front and foreign interference efforts, on why they’re not – why aren’t Police trained in many countries to look at this, to investigate it in a fair and level headed way? Instead, we see, you know, these botched investigations, sometimes, on one hand, are really, in the most part, talking to a lot of, you know, Activists and Writers who are targeted by, you know, threatening phone calls by people saying they’re Chinese Police. When they go to their local authorities, they don’t get help. I, myself, have received a lot of threats, including when I wrote about Xinjiang for my newspaper, and Police tell me they don’t have the infrastructure in place to even address potential intimidation issues, surveillance issues, that might come from out of state.

So, you know, that the conversations are, you know, overflowing, but actual actions and systems in place, that many countries have, are really just lacking. I spoke with some people in a major European country, and they told me they were just starting to – they know that they’re behind, but they’re just starting to gather testimonials and feedback from members of their Chinese immigrant population, just this year. So, that just gives you a sense of how a country is very – just, kind of, starting to grapple with understanding some of these complexities. And really, I think, members of the international Chinese diaspora need to be part of these conversations, because I think, often just having them in the room provides that nuance. Personally, I’m not going to say all Chinese people are this or that, because I know myself, my family, who I am, is a lot more complex than being able to generalise or say China is taking over the world and is a colonial power, things like that. Yeah, thank you.

Dr Yu Jie

Okay, thank you, Joanna. I mean, from your comments last five minutes or so, I mean, I sense that there seems to be – there’s a inflexion point, that up to one point, that it seems the rest of the world much welcomed China’s economic engagement, also China’s – welcome China’s global outreach and then, suddenly, things taking a downturn. And could you perhaps explain to me what has triggered that inflexion point, has happened, based…

Joanna Chiu

Yeah.

Dr Yu Jie

…on your research, yeah?

Joanna Chiu

Yeah, and so, I am in Vancouver, so when you think Vancouver, I think a lot of people in the China world think about the Huawei and the Meng Wanzhou blow-up. So, just to give, like, a micro example, in Canada, before this happened in 2018, when Meng Wanzhou was arrested here at the behest of US authorities, and then the two Michaels were taken as, really clearly, political hostages, as leverage, because China was angry about – wanted to put pressure on Canada, as well as the US, to release Meng. Before that, you know, all indicators showed as – that the Canadian Government really prioritise expanding economic and trade ties with China. Sources in Ottawa told me that, you know, while Canadian leaders always, kind of, wanted to make these strong statements on human rights, it really wasn’t a cornerstone of its approach to China. Really, you know, Trudeau going into office, wanted to pursue a free trade deal and that really, kind of, crumbled.

It really – you know, it’s really, really stark and striking that it took the Meng Wanzhou issue for many Canadians to even think much about China at all. I couldn’t find a job for a Canadian media outlet when I was a Foreign Correspondent in China. I would go to the Canadian Embassy for events, for Canadian Journalists, and no-one there would work for a Canadian outlet. Only one newspaper had a Correspondent. So, there was a very, generally, low interest in China in Canada just before the Meng Wanzhou issue, and that has flipped so much. Like, now, when I returned to Canada in 2018, I thought I wouldn’t be following China, but you know, my phone was ringing off the hook and in addition to writing many pieces about the China-Canada relationship and what, you know, the arrest of the two Michaels meant, you know, broadcast outlets really just asking me these basic questions, like, “What is China like? What is reporting in China like?” I think – like, I ended up, kind of, criticising and pointing out that it really took the arrests and, kind of, really poor treatment of two white, you know, upper middleclass Canadian men, for them to be mistreated, for a lot of Can – mainstream Canadians to be concerned.

Dr Yu Jie

I see.

Joanna Chiu

Yeah.

Dr Yu Jie

So, obviously, that’s one strand of the China and the globalization. Now, perhaps…

Joanna Chiu

It was.

Dr Yu Jie

…let’s open another strand, and I’m sure Jim will provide different answers in here. Jim, the floor is yours.

The Rt Hon Lord Jim O’Neill

Thanks, Cherry, nice to be here, and I’m glad you’ve figured out who Manchester United are. I’m very impressed by that. Listen, I’ll – we could spend days talking about this. I am taking for granted that the theme relates to many different issues, but at the core of them are economics and finance, or certainly, that’s how I’m going to answer them. So, I’ll say three things to start.

First of all, fortunately, but whilst economics is a social science, there were certain factual things that at the end of the day, are what most citizens of the world regard as most important, and there are two things about that I want to point out, ‘cause they get frequently lost in the current, very dissatifory – dissatisfactory discourse about China and the rest of the world, or particularly the West. The first one is that the biggest driver of global trade is relative rates of domestic demand growth, way more important than trade deals. And in that regard, to cite one example, contrary to the emotion about the world of de globalization, surprise, surprise, in 2021, global trade recovered quite dramatically because of the strength of global domestic demand, particularly in the United States and especially, early on, in China. So, Chinese exports were very, very strong last year. I think Korea, a county I’ve followed forever as the first country to record its trade, showed its fastest export growth in 40 years. So, there’s the first point.

Second one, which is actually an accounting identity, and this is crucial for the private sector relationship, is countries that don’t save very much, but need a lot of capital for investment, import it from elsewhere, and those that save a lot, but don’t need as much for the domestic investment, export it elsewhere. And it – and as a – that is, actually, an accounting identity in order to make the balance of payment zero and it relates, partly, to trade flows, as well. And a lot of the – those two simple facts frequently get lost in aspects of the debate of China and globalization and until China’s savings rate changes dramatically to becoming lower, if it ever does, or the United States becomes dramatically higher, certain economic patterns that affect global flows of capital and trade, will remain broadly similar, irrelevant of what is the mood of particular political forces actually in China or obviously, in the West. And it’s very important, in my opinion, that people do not forget those things. And in that context, over the 20 years of the BRIC acronym that has existed, somewhere between 50-80% of global domestic demand over the whole of those 20 years has come from the US and China, and the rest of us, sort of, live off the scraps.

Moving on, the second point, however, as is so topical and it’s fascinating to see such a large attendance on this call, reflective of the time, we have a staggering deterioration in the general Western mood towards global and – towards China and globalization. As you introduced me as, and as people know, I actually was a member, briefly, of the British Government that was at the forefront of what was, in hindsight now, quite laughingly and amusingly regarded as the ‘Golden Relationship’, but with the end of Cameron and Osborne, that was essentially, in hindsight, the end of the Golden Relationship and within the first few weeks of Theresa May appearing on the scene, a whole new approach, which importantly, was more focused on issues to do with defence and security than economics, started to take hold. And with it, it coincided, of course, with this – with two things, which I think are relevant to the Western position on all of this.

One is the ease in which populist Politicians, most epitomised by Donald Trump, find it easy to blame things outside of their control for all the evils of capitalism. So, China is an extremely easy candidate to blame, and it has become, frankly, and there’s no courteous way of saying it, really, a very, very increasingly fashionable place to blame for a lot of things that are going wrong with Western societies. And what is – has become more and more disturbing is that as this goes on, more and more countries in the West, if they want to be part of the Western Alliance, kind of, are forced to either pick sides or get dragged into it, as we, sort of, see a bit with some of the EU countries, Germany in particular, in the most recent past. And a lot of it is primarily based on perceptions, as opposed to reality, of what’s gone wrong with capitalism. I’d say a lot of it is that – the core of the problems are what I’d say “profit without purpose” and the problems of the spills of capitalism going through the elite, rather than issues of substance about China.

However, which takes me to my third point, and the one that some people might be a bit surprised to hear me say on this call, and certainly ones I didn’t think I would, the more time passes, the more problematically I find that China is dealing with all of this. And in fact, we’ve got into a somewhat vicious circle where the Chinese policy stance is actually provoking the West to have even more severe fashion in its views about China and globalization. And you touched on it at the start, Cherry, in many ways, the whole stance of China, through COVID, epitomises that position and of course, especially with Omicron, the whole idea that China can permanently shut down China and get rid of all parts of COVID-19, and especially Omicron, is obviously, kind of, ridiculous. And it’s yet another example of what I would say, in the interests of time, I believe that the Chinese Government, or those close to President Xi, need to seriously question themselves in pursuing what seems to be, superficially, essentially, a view that they can take how they want to do things at home to whatever friends they’ve got in the rest of the world. Because it’s clearly not working.

And in that regard, last example to say before anticipating some of the discussion, perhaps, but I saw it in one of the questions in the chat, somebody suggested that China might be having deterioration in relations with the West, but it’s enjoying great and better relationships with other emerging countries. I don’t actually think that is true either and, as I think I highlighted in some of our preamble beforehand, we are yet to see the Indian Presidents turn up to a meeting of One Belt One Road. And if China could – and India could work out their differences together, the amount of benefits for both countries from that, in terms of globalization, would be spectacular. And China’s got to, in my view, quite quickly, start to reflect on all these things, because if we carry on the same path, it is going to end up having consequences for their own domestic agenda and they won’t be able to achieve the economic growth that’s necessary. So, I’ll stop there.

Dr Yu Jie

Thank you so much, Jim, for that very illuminating comments. Just very quick question, quick – very quick follow-up questions.

The Rt Hon Lord Jim O’Neill

Yeah.

Dr Yu Jie

Now, since you’re the father of BRIC and you lamented recently in the Financial Times, suggesting that you didn’t expect the BRIC has achieved much of the geopolitical clout as things…

The Rt Hon Lord Jim O’Neill

No.

Dr Yu Jie

…hoping for back to 20 years ago. Now, would you consider, actually, if China decided to take a different approach on its diplomacy and perhaps the BRIC would achieve much greater than what we’re – where we stand now?

The Rt Hon Lord Jim O’Neill

I mean, linked to what – the last thing I said before that, I’ll use that as an example to answer you. And I’ve actually – in fact, Cherry, you might’ve been in one or two of the events where I’ve said this now, over a number of years. On – to make One Belt One Road much more credible, sustainable, inclusive, the Chinese should actually suggest to the Indians why don’t they play a key role in the next phase of development of One Belt One Road, rather than this presumption that this is what China wants and everybody else has got to, sort of, get into line and go with it? Because it’s clearly not working and, again, in my own scepticism to the question or comment somebody put in the chat, there are many, many other countries in North Asia that have actually come to the conclusion they’re not overly excited about the dialogue they have with China on One Belt One Road. And I do think, as is implicit in your question, if China wants to regard itself, as it often publicly says, as the “champion of the emerging world” and certainly the rest of the BRICs, it needs to think seriously about what can these countries do collectively, together, to raise their own combined economic fortune? And as I frequently tease BRIC’s political leaders, actually, their aggregate and average BRIC growth rate peaks within a year of them forming the political club. And it – 12 years after the BRIC political club started, the trend rate of growth between the BRICs has actually gone down, and that’s a pretty severe indictment of what they’ve pulled off politically between themselves.

Dr Yu Jie

Thank you, Jim. Okay, that’s a second strand of China and globalization. Now, I’m going to invite Professor Xiang to presenting us the third strand. Now, Professor Xiang, the floor is yours.

Professor Lanxin Xiang

[Pause] Thank you very much for inviting me and I’m obliged to say greetings from Washington, because I’m studying this year. My hosts are the George Washington University Elliott School. So, I will be here for quite some time. Now, I think – I would, like, start the conversation followed by the first speaker, or the question is inflexion point. Now, from my point of view, I think Yu Jie, a focus on this issue is important. Depends on which perspective you look at. From my perspective, there is not a – any single doubt the inflexion point is Donald Trump, of course. It’s not the question Donald Trump portrayed war with China. That’s actually not in the real issue there. It is the issue that Donald Trump opened the Pandora’s Box for what internal crisis that the United States is facing now. And they seem to be, well, you can say, Genie is out of the bottle. Can Americas push that back? My answer is probably no. The – even in my – in this town, even the mainstream media begin to talk about 1860, you know what I’m talking about Civil War. What kind of Civil – used – they used to say cultural Civil War. Now they’re saying maybe it’s some real, even physical, might take place.

Now, what does it mean, since we’re talking about China and the globalization as the theme here? How that crisis in United States affecting China’s attitude towards globalization? My own view is this, I don’t believe that actually we’ll discourage China from continued globalization process. I don’t want to get into politics, but I’m, basically, saying political elite are completely committed and the problem is their stakes, even including the personal stakes, are now closely linked to what Chinese experience the past 30/40 years of this globalization process. There is – it is my view that the Western observers completely misread what’s happening with some of digital companies in China or the recent fallbacks, you know, kind of, breaking the ‘financial tigers’, as Chinese say. That has a lot to do with internal politics, rather than with the economic activities, per se, yeah. Jack Ma, certainly, well, he deserve it, but that’s another issue.

So, the second point I want to emphasise, the – telling lies through one’s teeth used to be considered a privilege of the authoritarian regime, or you can even joke about it, right, ‘cause these authoritarian regime, they’re rarely telling the truth. But the most interesting development the last couple of years, since Donald Trump, is that the image of the world top – the democracies, seem to be getting used to it now. I never thought in my lifetime I will see that happening, by the way. I live in the US as student for seven years and worked for four or five in Professor in US system. I never thought I will see that. You just watch those TV channels, you have to choose between – CNN’s unwatchable, from my point of view, but neither if you want to see the completely opposite view, MS – NBC and then you look at the Fox. This is one system, no, sorry, I will say I describe the United States as one country, two – no, two country in one system, okay? The system is breaking down. I hate to use the Hong Kong analogy here, yeah.

So, lot of interpretations of Chinese attitude towards globalization or towards outside world are plainly wrong, okay. I just read one book about “Chinese Grand Strategy.” Supposedly, China had a well thought through grand strategy, not only meticulously planned, but also had three stages. The young fellow happened to be working with the team here, the Biden team and I think no, it’s absolute nonsense, yeah. Well, I just wrote a long review about it, so it’s going to be out in London. I couldn’t stand this kind of revisionist views, using Kaiser Germany to compare with today’s China, then stealthily eased into a Nazi Germany.

Now, that is the rhetoric, too, that Neoconservatives have been using for a long time. Remember, these type of people are – I couldn’t believe Democrat Party produce Neocon 2.0 these days. But remember, the Neocons are completely responsible for endless wars. Now, if that’s what they want, go ahead, be my guest. So, the Chinese attitude towards this kind of recent development, the light [inaudible – 38:05], they are actually perhaps – they exercise certain sense of Schadenfreude. Say, look, it’s not just our dreadful propaganda machine that’s telling lie, which lot of Chinese don’t really believe their own propaganda machine, sorry to say. But they say well, we have seen that on daily basis now, become a new normal.

Now, what lies I particularly interested to discuss. I don’t want to get in detail, if you want to, the Hong Kong question. That’s the revisionism par excellence. People tend to forget what’s the original deal how British used to run Hong Kong. For 150 years, British could have so many opportunities to make it into democracy, but only last couple of years there was a Politician who tried to do that. Remember, Hong Kong used to be called a place – well, “borrowed time in a borrowed place” and that Hong Kong was run by whom? Used – the joke is Jockey Club, Jardine Matheson, Hong Kong Shanghai Bank, you know, it list well at the bottom of that power basis, colonial governor. Like – or colonial governor means there is no democracy, ‘cause it’s got – it has – but the colonial governor is super co-ordinator of the business communities’ interests. That’s how the secret that making Hong Kong work.

Now, what’s the original deal with Margaret Thatcher? Chinese basically want to borrow that model. That is a mistake now from today’s value. Chinese has the – also has something to complain about. We actually want to borrow that British model, right? Except we have a different – we change the head of the government here. You have a Beijing – even allow certain level of hope for primary election. Now it’s become a totally different story. It’s a Chinese well planned try to take over a high power because they cannot – come on, look at how tolerant the Chinese regime for – at least for one year, during those riots.

So, people tend to forget about history. They don’t read history. Therefore, lying telling become a common practice. Having say that, let me point out, I’m not defending Chinese Government at all. I’m known to be the leading critic of wolf warrior diplomacy, but for different reasons. I criticise Chinese wolf warrior diplomacy. I cannot tolerate lying telling in the West, which I am lived for so many years, yes, even though I insisted on maintaining my Chinese citizenship. Okay, I stop here. I wish to continue our conversation.

Dr Yu Jie

Well, thank you so much, Professor Xiang, for this very honest comments and, also, really appreciate it, this huge honesty here. Now, let me go back to the phrase “wolf warrior diplomacy,” which has been discussed so extensively across the West media and so on and so forth. Now, inevitably, I still have to ask you, you know, what has figured certain Chinese Diplomats behaving in certain way? And surely was that something because the Chinese Diplomats has misread the West, or perhaps it’s just a matter of a leadership style that require the Chinese Diplomats to behave in a certain way? I mean, what were the key triggers in here?

Professor Lanxin Xiang

Well, the – well, there are a number of key figures, but the Foreign Ministry, of course, unfortunately, was at the forefront, ‘cause that’s the only organisation that dealing with the outside world in the normal sense. But don’t forget, this – first of all, this not an issue of how they behaved. Yes, it’s not professional behaviour, I totally agree, but there is a sense – there is enormous hubris now in China, believing the United States in decline, you know, our time has come, but not – that’s not majority view in China. But then we – on top, elite view actually disagree with that. To bank your foreign policy on American decline, it’s one of the biggest miscalculations, in my view. But don’t forget this reticence – you know, the popular reaction. We have a newspaper called Global Times, which thrives because it’s follow a model of, I would call it, a [inaudible – 43:09] model. Sorry to say, that’s the era of Nazi little tabloid, but I’m not saying it’s a Nazi regime. They follow this kind of model to popularise this idea of extreme nationalism. But it – but nationalism is a tiger, I always argue with Chinese friends. It may take you run fast, but it can hurt you badly, badly.

So, once they release the extreme nationalist sentiment, like Global Time and others, they cannot control it. So, wolf warrior diplomacy primary motivation, it’s motivated by domestic politics. They were hijacked by domestic politics. It’s not a grand strategy, it’s a bad strategy. I was the one who had the longest critique of that. The – I believe Chinese are silent for – oh, I mean, talking about government silent for a while, they did not stop me, and I believe, nine months later, there is a politburo meeting say, “Maybe it’s time to repair our image” and so, I wish you’ve noticed that meeting, as well. So, there is some adjustment there, but Foreign Minister, sorry to say, I never had much real respect, sorry.

Dr Yu Jie

Thank you so much for this honesty, again, and obviously, yes, I noticed that meeting very carefully and, also, Jinping wants to make China more likeable, put in that terms. Joanna, I saw your hands up. Would you like to commenting on something?

Joanna Chiu

Yeah, I think, actually, Professor Lanxin brought up what I wanted to raise on the point of wolf warrior diplomacy, that a lot of it, I think it arose from domestic Chinese political considerations. For a longer time, I think Chinese Foreign Ministry did try to be diplomatic. You know, talking to a lot of veteran China hands, they talk about how, you know, they had productive conversations with members of the Chinese Foreign Ministry. As a Journalist, I was handled by, respectively, the German and the French parts of the Foreign Ministry, because that’s the media I work for, and these Diplomats, they spent time living in the countries. They spoke French, they spoke German. I think – but I think what’s happening is, overall, in Chinese society, the more moderate cosmopolitan voices are falling silent and they’re being, kind of, drowned out by the more, kind of, almost cartoonish nationalistic voices. And talking to Chinese academics who used to give interviews, both to Chinese and international media, they feel that it’s not worth speaking out right now because of the climate.

And you know, Professor Lanxin, kind of, commented on, kind of, letting it out of the bag. It’s interesting, the first mass protest, march, demonstration I saw in China was one against France. It was some sort of nationalistic protest. But when I spoke with, actually, people in this march, I was like, “Why are you so angry at France? Why are you so angry at the West?” And they were like, “Oh, we just wanted to come and, like, shout and, kind of, you know, express ourselves because someone said that there’s – you really can’t protest many issues.” So, you know, being outspoken, overly patriotic, in a way, is one of the only avenues of allowable, permitted protest in China. When you look at social media, what gets censored is, you know, things like the #MeToo movement, leaving some of these platforms just to be overrun by some really, like, more extreme nationalistic voices, which, kind of, makes it, kind of, a more toxic place for Chinese people to operate in.

So, I do wonder, in the long run, whether this will, kind of, get out of hand into Chinese society, kind of, letting nationalism, kind of, you know, go and check by the presence of more diverse opinions. When Clubhouse, a audio only app, was allowed in China, you know, it was – a lot of us around the world spent hours overnight listening in, because we were hearing, actually, a diversity of Chinese perspectives on, including sensitive issues, like Xinjiang, Hong Kong, the idea of China will ever be democratic. And you see that whole range of perspectives and dialogue and people talking with the diaspora around the world, but because of the current state of really, really heavy censorship in China, we don’t get these productive dialogues anymore, and I think that leads and feeds into things like wolf warrior diplomacy. And just to look at Xi Jinping’s speech, saying, “Oh, we should be more friendly,” I think that’s an admission from, you know, top leadership that perhaps the wolf warrior mentality could have some risk for the legitimacy or the stability of the Chinese state.

Dr Yu Jie

Thank you, Joanna. Let me bring audience on, seems to have two – many questions in here. Could I invite Valentina Butenko to ask her question, please, Valentina [pause]? Is she on the call, Valentina? Oh.

Valentina Butenko

Hello.

Dr Yu Jie

Hello, yes, we can hear you. Please ask…

Valentina Butenko

I was…

Dr Yu Jie

…your question, yeah.

Valentina Butenko

…muted. Yeah, firstly, I just wanted to say thank you for such excellent comments from the panel, very insightful. I wanted to ask, in terms of following a lot of domestic Chinese politics right now, there’s a lot of rhetoric from the kind of, political elite around a lot of domestic issues, like common prosperity, also, the kind of – lots of tech crackdowns at home and cultural crackdowns on, you know, what they call ‘sissy men’. I wanted to ask if this is perhaps a sign that China is turning slightly away from, kind of, aggressive globalization and more towards focusing on expanding or, kind of, I don’t know, developing its society on the ground, any comments?

Dr Yu Jie

Okay, I’ve noticed there’s another common prosperity question, so we might just answer them together. So, I’ll read it out. This has come from Dina Mufti, and her question is, “Is Presidency version for China that of common prosperity over capital market success has regulatory changes towards tech companies curb those – the ability to grow?” So, I guess Jim would be the best to answer this question. Jim, please?

The Rt Hon Lord Jim O’Neill

Thanks, Cherry. You know, time will tell. I mean, quite a bit of the time, I often think of this as being another one of those, sort of, slogans that at least appears in English for a while as the thing of the Chinese Government. But, you know, sticking with the spirit and objectivity of China, look at this as a hardnosed Financier/Economist, I mean, what the hell does it really mean? Are they really saying that they want to achieve much greater equality of prosperity, or what? And what my real answer is, linked to some of the tone of what I said in my third part of the answer, that I think China needs to rethink how it’s engaging and thinking about global issues, it has to also link it more clearly into their head about what they’re trying to do at home.

You know, all of this is going on at a time, as you and so many others equally aware as I am of the demographic curve turning against China, and this was featured in our assumptions for the BRIC trend. You know, for China to achieve something like 4½% growth the next 15 years, which is what they have now said, much weaker than in the past, they won’t – will not be able to do that unless they can improve productivity, given the demographics. And, you know, the whole goal of common prosperity, to me, is what I’ve believed about China for the 30 odd years I’ve been so focused on it, and if they can’t continue to raise, or let’s call it double income levels for Chinese average people, over the next decade plus, as they have done, then they’re going to have massive problems. And they need to engage better with the rest of the world, and they need to backup common prosperity as a slogan with actually doing something other than penalising endless sectors, at the same time as cracking down on the real estate sector, at the same time as trying to play battles with the whole of the Western nations, because it’s going to end up in tears for themselves.

So, yes, I see common prosperity mentioned every other day, like everybody else does, but it seems to me a little bit of an empty slogan, other than it’s easy for us to see that, you know, they’re having a go at tech companies or specialist elitist education entities, etc., etc., etc., it’s not really anything of substance that I can see as of yet.

Dr Yu Jie

I mean, I agree with you entirely in here and also, interestingly, if you actually look into the readout of the Chinese Central Economic World Conference, it seems to be they have now begin slowly abandoned the idea of the so-called common prosperity and now encouraging the private companies now playing an even bigger role, in terms of employment. So, I mean, I…

The Rt Hon Lord Jim O’Neill

No, I didn’t know that, Cherry, but it’s – if I look at the high frequency indicators I’ve followed for as long as I have, if I were a Chinese Advisor to President Xi, I’d be pretty concerned as to the scale of slowdown in Chinese growth.

Dr Yu Jie

Absolutely, absolutely. Now, there’s another set of questions in here, specifically on the Chinese think tank, which is really interest to me. Now, can I invite Nao Xi Ovacu to ask her question, please, Nao Xi?

Nao Xi Ovacu

Oh, wait for that, can you hear me?

Dr Yu Jie

Yes.

Nao Xi Ovacu

From the open sources and for several years, this is from around the seven years starting or something, ‘til now, Chinese leader Xi has tried to impose their function of their think tank in China and this is – and Chinese leadership path says, “This is a path of the soft power of the – enforcing the influences.” But it may be some of you, maybe me – including me, and the kind of, international competitiveness or repetitiveness of Chinese think tanks, it’s, now it’s so high. So, what’s the Chinese Government – sorry to do a bit more bigger, so how do you think Chinese internal think tank moves up under their effect on the state in their diplomat policies?

Dr Yu Jie

Okay, so, that’s another hold – stakeholder of the China and globalization.

Nao Xi Ovacu

Yeah.

Dr Yu Jie

Could I invite Professor Xiang to ask and is – to answer this question, ‘cause you are familiar with the Chinese think tanks, very much.

Professor Lanxin Xiang

Well, I’m running one, I mean, in Shanghai. But – well, this – yes, and look, by the way, and allow me 30 seconds. It’s called the Institute of Security Policy, okay. I used to run a centre for Belt and Road studies. Now they expand into an institute, so it’s bigger, more responsibility. Shanghai, it’s a – it’s part of a Presidential project.

But now, think tanks have to think. The problem today is that they are not doing think. It’s not just a phenomenon in China, by the way. I notice, even in this town, I’m here. London, perhaps maybe IISS is the only place I think they still do something. Chatham House I didn’t follow too closely. Now, here is – everybody has their own little political, you know, game it’s playing, and everybody preoccupied with the specific so-called policy issues, so very few people are really doing think. But in China, think tanks in decline for precisely the reason leadership needs – now they want to have a grand study. They want to see how and seen what direction we’ll go. Think tank used to provide only – you can say a Chinese think tank work this way. It’s like a menu. You go to the restaurant, you pick leadership – pick a manual saying, “I want a Kung Pao chicken,” so you do the Kung Pao chicken for you, yeah? It’s not you take initiative, saying, “I want to do a project,” try to attract your attention. No, they don’t need this and so, that’s the very different kind of situation here.

So, there – of course, now, there is a lot of tightening up, there’re a lot of political correctness, so, think tanks, they don’t do very much, in my view, or difficult to do. You can do – you can still do policy, for sure, but they cannot do much thinking. But that’s a common phenomena today, even in the West, yeah.

Dr Yu Jie

I think another reason is perhaps, also, that think – many of the Chinese think tanks are state affiliated. They are not really in position of criticising the government, either. I think that’s perhaps one of…

Professor Lanxin Xiang

What…

Dr Yu Jie

…the reasons, too.

Professor Lanxin Xiang

…do you mean, affiliated? What…

Dr Yu Jie

I mean affiliated…

Professor Lanxin Xiang

…affiliated, what…?

Dr Yu Jie

…basically, the state would have to pay a salary for many of the Researchers, in a way.

Professor Lanxin Xiang

Well, there is hardly any private think tank anywhere. That’s just…

Dr Yu Jie

Yeah.

Professor Lanxin Xiang

That’s nothing new there, right?

Dr Yu Jie

Hmmm, yes.

Professor Lanxin Xiang

But there used to be. There used to be – do lot of thinking, you know, so what I was trying to say, yeah, right.

Dr Yu Jie

Great. Now, let’s – we have focusing on think tanks, we have focusing on domestic politics. Now, let’s return to the strand of the Global South in here. So, could I remind Rodrigo come back with his comments? Rodrigo, the floor is yours.

Rodrigo

[Pause] Thanks, Yu Jie. My point is simply that there seems to be a certain split between perceptions of China, and I – and my personal research, I’ve come across, you know, several countries who have – there’s certain level of political rhetoric that is cynophobic. Perceptions of China among the public and among the business community seem to run very high, and I find that in opposition to what we see, for example, in North America, Western Europe, Australia, Japan.

Dr Yu Jie

[Pause] Sorry, your question is that there seems to be a clear division between how the Global North, which is the liberal West as see China and vis-à-vis how the Global South perceive China? Is that your question?

Rodrigo

The traditional Global North, yes, ‘cause even part of Europe, if you go to Eastern Europe, for example, or places like South Korea, perceptions of China are not as negative as they are in other places.

Dr Yu Jie

Okay, thank you. I think we’ve really approached the end of the events and now, could I invite all speakers, just use a couple of sentence to summarise what’s your answers for this particular question, ‘cause now we’re taking the two strands of the globalization in here, one is on the South and one is on the North. Could I invite just Joanna to begin with?

Joanna Chiu

Yeah, I think that’s good to note. Partly why I included Italy and Greece, that are more relatively friendly to China and Chinese investment, in my book, is that I wanted to have different perspectives, even among the West, what we – you would consider very Western society. But, you know, even in Africa, which is known as, like, pre-first artic Belt and Road, where a lot of Chinese-African investments were made, partnerships were made, there has been, actually, an increasing, more sceptical and critical scholarship and analysis from African experts and stakeholders about how they can play a more controlling role in how these partnerships are shaped, so that they could – Africans can benefit more long-term. So, I think it’s also not fair to summarise the Global South as generally being more open and receptive to China.

Dr Yu Jie

Okay, thank you.

Joanna Chiu

So…

Dr Yu Jie

Jim?

The Rt Hon Lord Jim O’Neill

I tend to agree with Joanna, as I touched on in a previous comment. I think this is a far too simplistic generalised observation. You know, Germany has actually, probably until the past year, been the most pro-China country of – from the West, and it – but to some degree, it’s ‘cause of needs creates must. And the reason why Italy and Greece had, until relatively recently, had a, almost a begging bowl, is ‘cause the European Monetary Union crisis devastated particularly Greece. It was they needed any friend they could get.

But on the central part of this question, I don’t really think it’s true. The relationship between India, for example, and China, is poor, and the relationship between a number of South-West – sorry, South-East Asian countries and China, specifically over One Belt One Road, has deteriorated quite considerably. And so, I think there is this perception that many Global South countries accept China on friendlier terms, but adjusted for the fact that, you know, a lot of them need money from whoever will give it them, I’m not sure it’s really as true as that question implies, anymore.

Dr Yu Jie

Okay. Professor Xiang, the final word from you?

Professor Lanxin Xiang

Well, just two – a couple – two sentences here. One is that the West must repair its own image before you try to convince China, that’s one point. Second point is that China will not quit globalization. China has always been part of the world, even in ancient times, more than anybody else. Then that’s a story conveniently forgotten today. Alright.

Dr Yu Jie

Great, fantastic, a really huge topic and thank you so much for all of you to help me chew into this somehow messy, but different strands of the globalization that China has embraced in the past, and let’s see what, in 2022, that Beijing kept us – keep guessing what will happen, sooner or later. Now, I’d just like to thank you for all of you, for distinguished speakers, but as well as all the audience stayed us in the last hour, and thank you so much and I look forward to see you at many other Chatham House event at any time soon. Bye, bye, have a nice evening.

The Rt Hon Lord Jim O’Neill

Thank you, Cherry.

Professor Lanxin Xiang

Thank you.

Dr Yu Jie

Thank you, Jim.

Joanna Chiu

Thank you.

Dr Yu Jie

Thank you, bye.

Joanna Chiu

Bye.