Professor Michael Cox
Okay, well, good evening, everybody. Welcome to this event here tonight at Chatham House. It’s nice to be back. I first started working with Chatham House over 25 years ago, and I still look extremely young, I think, but don’t laugh. This is an event we’ve been wanting to hold here for some time because it addresses a question, a topic and a theme that many of us, both at LSE and LSE IDEAS around here at Chatham House, have been debating not just for one year or two, but for probably the better part of 15 or 20 years.
I remember 2004, James Hoge, who was then the Editor of Foreign Affairs, wrote an article, and bearing the two words at the top, ‘Power Shift’, and it seems that one of the great themes, of the last 20 years, at least for 15 or less, is that somehow there is we are been told, and been repeated many times, that a shift is taking place in the world, the world economy and the world political order, ultimately with long-term consequences for the way the world order functions. And that shift is from, whichever one you want to choose, from West to East, from the G7 to the G20, from the United States to China, and generally speaking, from that area we call the transatlantic to that particular area we might call the Pacific or even now, today, the Indo-Pacific.
So, this is not a new discussion and it has some ramifications, not just at the level of economics, but also, at the level of international relations. For all of those who know your Thucydides, and I suppose nearly all of you in the hall read your Peloponnesian War before you just came in here. All those of you who have read Graham Allison over the last few years, talking about the Thucydides’ Trap, the question becomes that if there is a big power shift taking place, if history teaches us anything, which it probably does and sometimes does not, then when power shifts occur, conflict becomes the outcome, we will see.
So, I’m delighted here this evening to welcome my three speakers. I should say who I am. I don’t think I’m so famous I don’t need to introduce myself. My name is Michael Cox. I am Professor at the London School of Economics, Emeritus I’m told, which yet, does not mean dead, and I’m Dir – I made it, but I’m also Director of LSE IDEAS, which I’ve been running for ten years now, with my good colleague here, Christopher Coker, from the International Relations Department. And I’ve just got to make a few announcements on the proceedings. Firstly, this will be recorded and livestreamed, so be careful what you say, and I think that’s what it means. I’m also told to announce that people can comment via Twitter using #CHEvents, and could you, by the way, put your chair – not your chair, your phone on silent mode.
The order in which I’m going to put this, and I’m going to ask each of the speakers to speak for no more than six minutes and 37 seconds, as they say. I’m going to begin with Christopher, who’s going to open up the debate on Power Shift. Going to move over to Dr Yu Jie here, Cherry, a very good friend colleague from LSE IDEAS, with whom I have taught, over many years, at [Beder – 03:13] University, where we rehearsed these ideas, by the way, in China, sometimes they agreed with us and sometimes they didn’t. And finally, a good friend here from ICBC, Standard Bank, Jinny Yan who also got her master’s from the LSE, I’m bound to mention that as well. So, with no further ado, Christopher, I’ll pass over to you to start the debate this evening. Christopher, over to you.
Professor Christopher Coker
Well, thank you very much. You make this very difficult, in seven minutes, to talk about the Decline of the West and the Rise of Asia. But I will just say, first of all, be very careful of sweeping historical statements like this. And back in 1904, Halford Mackinder, who used to be a Director of the London School of Economics, wrote a piece called The Pivot of World History, in which he forecast that the 20th Century was going to be the Asian Century. He got that wrong. But he did also say that the future of the world would be determined in Eurasia and that railways were going to be the dominant factor and that China, not Russia, would be the dominant power in Eurasia, by the end of the 20th Century. So he got a few things right, he got a number of things wrong. So we have these two very sweeping grand narratives now that the United States is in decline, that the Asian Century has arrived and with it, China. And I think you can actually challenge both, but I’m not here to challenge both, I’d like to just say whether the West is in decline or not.
In the week before the Brexit Referendum, Donald Tusk gave a speech in which he described the West, not Western civilisation, but the West as a unique political civilisation. And he said, “As a Historian, I fear the beginning of the destruction of Western political civilisation in its entirety,” not, I hasten to add, the destruction of Western civilisation. But this institution, this organisational, this ideational idea called the West, which has been there since the Atlantic Charter in 1941, which Churchill and Roosevelt signed, and people forget that Churchill signed it on behalf of seven other European Governments that were in exile, France, so being typically France did not sign until 1944. The point here, I think, is that we have a big battle shaking up next year within the Western community, within the transatlantic community on secondary sanctions, and particularly on the sanctions like legislation, which is going to be passed perhaps by Congress later this year. Well, I won’t even talk about this. I want to talk about the fact that there are two narratives now, which divide the United States and the European Union, and they both involve China.
The United States defines China as its main strategic rival. That’s in the National Security Strategy of this year. The European Union, for the last few months, has described China as a systemic rival. A rival not as Russia is strategically, but a rival, in terms of ideas and norms and a country that unlike Russia, can actually divide the European Union, whether it’s the 16+1 group or whether it’s the Italians or the Greeks or whoever, not taking EU policy positions, but as they would see it, being bought off one-by-one. I think this is a great challenge and the fact is that the European Union is in no position, at the moment, to assume that global level that people like President Macron thinks is its right, because it’s also divided at the very, very core, and we saw this in the elections quite recently.
One other point I would make is that China is celebrating itself, as Xi Jinping said at the 90th Party Congress, as a Leninist Confucian state and is rediscovering the values of the 2,000-years-old patriotic history courses, celebrate Chinese civilisation and what it’s achieved. There is, I think, in the air, an idea that Chinese civilisation is back on the map as the number one civilisation in the world, and what do we find in the West? We find a total collapse of self-belief in the values of Western civilisation.
It’s difficult for me as a Professor to stand up now in a university forum and talk about Western civilisation, without it being denounced as responsible for everything from slavery, to imperialism, to patriarchy, even to global warming. And that I think is very, very dangerous because it may lead the Chinese to think that if the West doesn’t actually believe in its own value system, it is not going to stand up for this so-called liberal world order. So my last take, because I think the minutes are ticking away here, is just to remind you that years ago the great intellectual guru of Leonid Brezhnev used to talk about how the Soviet Union was powerful enough to give history a push.
The point I’m making today is that China is not powerful enough, at the moment, to give history a push, but I fear that there may be forces in China that believe it’s worth trying. And the United States is not in terminal decline, either relatively or absolutely, and the United States will resist. So, if we mention conflict, if we wish to avoid a conflict, it’s important not to spin these grand historical narratives and prejudge history before it’s actually happened, but actually look at the reality on the ground.
Professor Michael Cox
Thank you very much, Christopher, and Cherry, straightaway over to you.
Dr Yu Jie
Right, okay, thank you so much, Mick, for your kind introduction. Good evening, ladies and gentlemen, I’m Dr Yu Jie. I’m the China Research Fellow for Chatham House, and thanks so much for my colleague, Goodwin, putting up this entire event together. Now, as what Christopher said, much discussion of the so-called Decline of West and the Rise of Asia, it seems to be a grand sweeping statement, but how much truth, within the statement, I mean, we don’t really know. Mick and I has been doing this debate every other year and every year we found elements of decline and rises changes.
Now, this year, I’d like to pick two elements of the changes and declines to focus on in here. The first one is on value, the other one is on technology. So, I mean, it seems that these two elements very much sat in forefront of the so-called US China new Cold War or the great power competition. So if we are talking about becoming Asian Century, if we are talking about the rise of Asia, and for China’s case, China is not a major global power, if it’s not yet there, major global power, was very much clearly announced leading Global Governors Reform Agenda, as well as also, an increasing, what we call the discursive power, the ability of shaping the debate for international affairs at the very beginning of this entire event happened. So which means China has really very much shifted itself from the past as being agenda follower of international affairs into the agenda setter for international affairs.
So – and the Chinese state has also realised that it’s not just about the voices in power, there’s also very much a strong feeling, among the Chinese population, that the Chinese does not really have the respect which it deserve, come from international community. So Chinese leaders has repeatedly called this phrase, so-called ‘democratisation of international relations’, don’t get me wrong, I’m not talking about Xi Jinping prepared to give bigger voices for the NGOs, as well as for the civil societies. What, in here, he’s actually talking about, international politics should be organised under the term of equality where every single country should respect their sovereignty and a difference, so that’s what he called it. And part of the reason why he’s calling that is not just because of China require that sense of voices and also deserve to be heard. But China is only among a group of leading countries, which somehow realised the landscape of international affairs has shift significantly in the past few years and therefore, required the so-called emerging economies to have much bigger voices. So that’s what he’s proposed behind all this.
Apart from all these new proposals and what Christopher just mentioned on this so-called civilisation, again, this is something new, since President Xi came to power, because what he has proposed is this unbroken 5,000 years civilisation. And I personally think that’s very much an exaggeration, but unfortunately, this sense of exaggeration has been told again and again, at a very early stage, among the Chinese schoolchildren. So, this paraphrase of 5,000 years has been continuously resonate among the Chinese population. So that’s one element of value very much, if you’re asking the Chinese on the street, “Do you actually really believe in the Western political system and Western values?” And the most likely the answer you would have is no.
So, having said that and also, there’s another additional element in here I would consider, the sanctions of nationalistic sentiment and patriarchism, just judging by the reports we received, in the recent weeks, on the [inaudible – 12:06] period of a US-China trade war. And the Communist Party, since affirmed a tried and tested recipe for success to unite the country, which is based on patriotism, and try to tell the story, only the Communist Party, which will enforce that legitimacy and keep the foreign bully away and keep the suffering of the Chinese population, in the last 150 years, away and only the Party can do that. And this rhetoric has been reinforced again and again with inside a country, so a dangerous sign already in here, apart from all these value discussions we have in here.
Now, the second element I would like to talk to you about is on technology. I do remember Graham Allison talking about the Thucydides’ Trap narrative. The element which has not really been included is actually around technology, but however, since President Trump set the entire great power competition in a completely rule of the game, which is very much based on who owns the technology and who does not own the technology. So the fear that China will dominate the crucial technology, now become more than the widely spread than ever. So the American political leads really alongside leaders of the so-called Five-Eye countries believe what China called for maybe in China 2025, industrial strategy upgrade will be something pose existential threat for the United States monopoly over the high technology sectors. And China’s technology strident, together with this very distinctive political system at home, this is not really reshaping the global economic order. But I mean, much to my regret, unlikely, I mean, if Donald Trump would like to singlehandedly put forward a technological blockade against the China, and this is going to prove to be rather difficult because it can – it not only rely on United States by itself, it also have to rely on those longstanding Eyes from the United – sorry, from Europe and also from Asia.
But somehow, President Trump are much willing to tear up the agreement with those longstanding Eyes, so this potentially pose a problem for President Trump himself. And also, I consider this is going to be immediate concern for most of not the great powers, but medium powers, like countries like UK or countries like South Korea. And ultimately, they are very suspicious about Beijing’s intention and would infinitely prefer to have their national security associated with United States, but they’re also clearly aware that they have to stay on very much a good term economically, together with China. And obviously, United States is no longer really prefer to provide a stable global leadership and regional security umbrella and this would be somehow from China’s charm offensive, charm offence much harder to resist, so that is the potential danger.
Another even bigger subject, what I realise is, if we are talking about innovation as being one of the key element to calculate nations’ global influence and obviously China tried to tick that box and – but often, conditional wisdom would go, the greater personal freedom that society enjoys. And therefore, create a much bigger normative power within society, but somehow China has not challenged that conventional wisdom, it seems to be that innovation and control in China are flourishing simultaneously at same time. So, for me, this is really a new element of this so-called great power competition in here.
Just to finish off, I mean, even though President Xi is facing an enormous external pressure from the United States, but I think that really, the biggest question lies on domestically whether President Xi will be willing to and be prepare to resolve this permanent contradiction between the centrality of the Party and also, to let the market force to save the economy. And this contradiction would not be easier to resolve, even if we are going to have a temporary ceasefire between Beijing and Washington. I’m not sure the West is actually in declining. But certainly, China is rising, was learning very painful lessons in the years ahead, and Vladimir Lenin has said – you know, I often don’t like quoting Communists, but I mean, I have to do it tonight just to setting the scenario for the US-China relations in here. For decades nothing happened, but the weeks, decades happens and that’s exactly the scenario where we are now.
Now, I’m ending here and I much look forward to hear your questions and comments.
Professor Michael Cox
Thank you very much, Cherry. Good to end on Lenin. The name has not been mentioned here for many years, I would imagine. Jinny, over to you.
Jinny Yan
Thank you so much and a pleasure to be here. I think, in this day and age, this is a sanctuary, I think, for ideas sharing. I speak here today not really as a member of ICBC Standard Bank, and partly Chinese Bank, African Bank as well, but more from a personal perspective. I’m a UK national, with experience in both China and in the West, and I want to, you know, perhaps give you some thoughts of mine, from a Practitioner’s perspective. It’s very difficult obviously to argue with these academic professionals and clearly, some of the arguments indeed, that I very much agree with. But I think just to address that – the title of our discussion today, first and foremost, when people talk about Asia’s rise and the West’s decline, often they’re talking about GDP. And clearly, that is happening, particularly on the back of financial crisis, it was indeed, Asia’s chance to shine, and China for one, definitely used that opportunity to try and drive this position, to drive the resurgence of recovery on the back of financial crisis. So I think recent thesis around, it is indeed, Asia’s century, is mainly based on that GDP growth and indeed, China’s GDP as an aggregate size, will indeed rival that of the US any day now and that, itself, is inevitable.
However, that thesis itself is based on global trade, global supply chains, the fact that Asia now account for so much of global supply chains, particularly of goods. So much of what we consume nowadays, the trading – the production of that is produced very much in Asia, parts of it. Obviously, China is shifting the lower value added goods towards the rest of Asia, particularly developing Asia, and that indeed, is why I guess a lot of the tariffs are aimed towards that supply chain. That said, I read a very interesting article recently from McKinsey’s, that was, I guess, revised at the beginning of this year on global supply chains, and the findings are very interesting, in that global supply chains are no longer really about goods, it’s more about services, it’s also more about digital supply chains. So these are new trends that are effectively shaping the new forms of global trade. So, in fact, we are living in a century of industrialisation or Global Supply Chain 4.0, or whatever you like to call it. These are the new trends that we need to be very engaging with, and also, about knowledge intensity. Global supply chains is now not only about the exchange of goods, but also, about the exchange of knowledge and also, interregional trade is very important.
These are some of the findings that I think is the fundamental basis of what I want to argue and that actually, if you want to rise, whether it’s as a region or as a country, I think in – particularly in this century and the next, three things are very important to get right. Number one is how to address the digital age, who indeed, positions themselves to really lead the way in addressing digital age. And one would argue, China is winning, on some fronts of that. If you look at AI, fintech, whatever you like, technology companies, indeed, because China has the financial power, it has the policy backing to make sure that those industries thrive.
And then, number two is green economy growth, so sustainability, green economy, all those types of sectors and areas that we look at. And if you look at the Paris Agreement, it is definitely the US that’s tended to shy away from a global answer to that problem and China, again, led the way, in terms of trying to lead the way to address that sustainability and climate change issue.
The third success, I think, success point, and which is very, very important, is about the right set of institutions in place that’s necessary to actually address all of the necessary missing ingredients, and that, I would argue, is where China perhaps is lacking. You could almost compare it to the most state-of-art train, but on a set of railway tracks that’s, you know, built in the 70s or, you know, 80s or whatever, and we probably witness that every day in London, the UK in sense of infrastructure.
The infrastructure that we see today in London is very comparable to what I’m describing here and which is that China has huge amount of challenges, and what China likes to do is throw a lot of financial resources to – into the sectors that they see necessary to try and promote, to address the current issues. However, to create a sense of accountability credibility is not that you can throw the financial resources into it, it takes years of building. And China doesn’t need to influence the West, China indeed, actually, has to influence the emerging world, because what’s going to really position China and what’s really going to identify, you know, the rising powers in the future is about how a country addresses the responsibilities that comes along with a rise in power. So that includes climate change, that includes how to influence others in the same development stage as yourself to develop peacefully, but also, to develop very sustainably, not to only think of yourself, but also to think of the institutions that’s necessary.
So I think I’m going to end there, but I want to really put out my argument there that it is whether China can address the digital age, green capacity building with other countries, particularly emerging economies, and also some sound and really a rethinking about building domestic institutions is absolutely necessary to really get the China story out.
Professor Michael Cox
Thanks very much, Jinny, that’s great. I’ll just add a few comments of my own, just briefly, before we move to questions and answers. I’ll pick up on your point there quickly, Jinny, on the, what you called – I’ll call it the GDP obsession and fallacy. I mean, why the hell are we listening to Economists? I mean, they got 2008 wrong; we’re told that they basically have got quite a lot wrong since. But still, this GDP obsession, an equation with the broader notion of what we mean by power, you know, and it’s certainly true that if you don’t have the GDP, you can’t become a great power. I take that as a given. On the other hand, GDP alone won’t do it. I mean, just to make a pretty obvious point about power, it’s got to be the power to attract. It’s got to be a model for somebody else and for us, other people around the world. It’s got to be the power to lead and to have followers who want to be led. Followership as much as leadership, that also, you know, revolves around the question of legitimacy.
People followed America after World War II because not only they had power, but it seemed like the legitimate leader, a) because it had the power, b) because it had the vision, b) because it had then, a huge number of extraordinarily intelligent policymakers. And secondly, because it was something that people wanted to follow, that kind of, you know, so I think it’s really important when we kind of use the word ‘power’ and equate it with GDP. I think we’ve just got to be dead careful on that one. And I find it really deeply ironic now that, you know, Economists have really had a bad shake over the last ten years, and quite rightly so, except the Economists at the LSE, I hasten to add, straightaway. Nonetheless, we still kind of obsess ourselves with this GDP and, you know, you follow the kind of Goldman Sachs model of GDP 2007/2008, that tells you there’s a power shift going on. And I think it is much more complicated than that because GDP obscures as much as it actually illuminates, it seems to me.
The second point picking up on, Christopher’s very good points about the dangers of, you know, grand narratives, grand generalisation. I think you’re absolutely right, Christopher, I’ll just throw this one out, we always agree on everything of course, ‘cause we direct the same centre at the LSE IDEAS. But nonetheless, I think there is an important point there, and a really important point, you know, this kind of that if you keep repeating the same thing time and time and time again, it’s bound to be true. As I said, James Hoge, the Editor of Foreign Affairs came out in 2004 on the notion of powership. Paul Kennedy, 30 years after his book, got it wrong in 1987, has repeated the same point, numbers of others have climbed onto this particular bandwagon, and the bandwagon basically, you know, constructs itself around two big narratives.
The West is on the way down. Neil Ferguson has told us it’s true, so it must be true, and secondly, Asia is on the rise, and within that, Asia of course, there’s something stalking, namely China, as Martin Jacques put it, it’s not only China rising, it is also when will China rule the world? Now, he tells me that’s the Publisher’s blurb, but nonetheless, he didn’t try and change it. I think there’s a danger in that a) it may be wrong anyway because it begs the question, what do we mean by the decline of the West? And it begs the question about what we mean by Asia and what do we mean by China rising? But it also leads to, sort of, really quite dangerous outcomes, because if China believes, as I think some in China do, that America, for instance, is in decline, and if the Americans on the other side believe that China’s tried to take advantage of its decline, then you are building in a classical security dilemma, from which it is going to be extraordinarily difficult for anybody to escape. And I fear, and I feel at the current moment in time, we are actually on the cusp of that, and we may even be in that security dilemma, as represented by the current state of the relationship between the US, which, on one side, clearly does think China is challenging it in all sorts of vital areas. And there’s a consensus on that in the United States now, no – everybody in America disagrees about everything except one thing, China, so, you know, there’s a real danger in that.
And the final point I want to get back to a kind of an old, I suppose a bee in my bonnet, which I’ve been writing about for, well, I don’t know, a 100 years it seems now, this constant repetition of the notion of American decline. I’m old enough to remember the Vietnam War and, you know, I even demonstrated against it outside the US Embassy many years ago. And I wrote, in the 1970s, with great confidence about American decline, and then Ronald Reagan came along, which really complicated the narrative. And then the Soviet Union collapsed and that really complicated the narrative. And then in the 1990s, the American economy doubled in size and then I was told, “Well, America’s still in decline.” And we’re back to that again. Now, again, the only thing I’d say here, clearly, there are major challenges facing the United States, both domestic and foreign and Trump is slightly contributing to that. Although I don’t think he’s the fundamental cause for it, nonetheless, it seems to me that there is, and I’ll go out on a limb on this one, ‘cause I’ve been saying the same thing for the last decade. I think the structural power of the United States is still immense, you know, the position of the United States, in the international economy, its military role, the fact that it spends more than the next nine countries put together, its alliance system.
Even as a model, it is still extraordinarily powerful. The very fact that we’re all obsessed by it, even in China, and when I’ve talked at Beder and in Shanghai and Congress, you know, the obsession with the United States, not with the European Union, the obsession with the United States tells me something about how important they regard the United States of America, you know. So I think again, we’ve got to be very careful not to fall into a – historical analogies are dangerous here, and I’ll end on this point.
I remember W W Rostow, you know, a fine Historian, but a pretty rubbish Foreign Policy Advisor to Lyndon Baines Johnson on the Vietnam War in the early 60s. But he wrote a wonderful piece, in Foreign Affairs called Beware Historians Bearing False Historical Analogies. And he was actually critiquing Paul Kennedy’s book on the Rise and Fall of Great Powers, and he said, “Look, all you damned Europeans have been declining, you do it really well,” you know, the British especially, and it was so polite. America is different. There’s something rather exceptional. Now, again, I’m not saying that America can completely escape, you know, the problems and difficulties and challenges, but it seems to me, if we kind of buy into that narrative of US decline, I think again, we’re adding to a kind of a narrative that we want to try and avoid. Those are my kind of brief observations, from your contributions. Is there anything you want to come back on, Christopher, Cherry, or Jinny just to – and then we’ll get going with the audience? Christopher first.
Professor Christopher Coker
No, no, I mean I agree with you, but I think declinism is a European phenomenon. It goes back to the Romans, who were constantly certain that they were in decline. So I rather like the German poet, Heiner’s suggestion that “You should put all the prophets of doom in prison until such time as their prophecies come true.”
Professor Michael Cox
True, okay. Yeah, fine, okay. Okay, Cherry.
Dr Yu Jie
Right, I’ve two points I’ll come back, one is on the GDP obsession. I think somehow, China has already got over that stage regarding GDP. I mean, I just remembered, for the first time this year, the State Council was unable to give a precise number between 6 to 6.5% GDP growth. Apparently, I’ve been told in Beijing, that number has caused quite big sensation within the Party, because after the 19th Party Congress, and President Xi has said very clearly now the contradiction of the Party has been fundamentally shifted because this, as a country, now should be stop obsessed about GDP, but more looking to the quality of the growth. But what my worry would be, given as US trying, you know, there’s external pressure from Washington continuously, and how much he’d be able to resist that pressure of raising the GDP number, so that’s back and forth. But I think overall, the reaction inside China, that obsession of GDP is over.
Secondly, on the – on structure power and also, China’s obsession with United States, I cannot agree more with you. Just look up the history of the PRC, People’s Republic of China since 1949, what I’ve noticed, whenever the Chinese or Beijing in – was very much in good terms with Washington DC, and that’s in the area where the Chinese economic growth and also, political influence extended most. And whenever Beijing and Washington are not in good terms and then that’s where the turbulence begins, so perhaps we are facing now that scenario as well.
Professor Michael Cox
Okay, and Jinny, any…?
Jinny Yan
Professor Cox, I think there’s too much agreement on this panel, so I’m going to put in a disagreement, but not much because my good friend, Cherry, mostly agree on everything. But I think this GDP theory, I think, you know, it’s very easy to say, China’s GDP and aggregate will of course rival this increasing value on per capita terms. It’s going to be a very long time for Asia to rival that of the West and anyone else, for that matter.
I was in the Isle of Man, for example, Isle of Man’s per capita GDP is four times that of Shanghai and Beijing, that puts it in perspective.
Professor Michael Cox
The Isle of Man?
Jinny Yan
The Isle of Man, obviously.
Professor Michael Cox
And so, I think it’s still part of the United Kingdom, isn’t it?
Jinny Yan
No. Anyway, so what I’m – so I think on that GDP front, however, China, it’s going to be a very long time before China can move away from a quantitative target model, because local governments are still incentivised by GDP targets. You know, China loves this targeting, and I think it’s going to be a very long time, unless we have other incentives, for example, the quality, how do you measure quality of growth rather than quantity? And another point about the rise of consumer – consumerism in China, so we’ve heard about this thesis about China becoming a more consumption driven economy, and that is very true everywhere you look.
China very much, you know, sees US as a role model, looks up to US for a very, very long time, everywhere you look. But until now they’ve suddenly found that actually, in many areas, particularly consumer goods, we’ve found our own answer, coffee chains, you know, food chains, cars, electric vehicles, you know, they’ve suddenly found that actually, you know, we can do even better because we can tailor it to our consumers. So I think that is a result of rising middleclass, rising education, and that is reflected, but everywhere you look, you still see that rivalry, Silicon Valley versus Shenzhen and, you know, and the China model is very much based on the US model everywhere you look. And then last but not least, I think collectivism versus individualism, I think it’s only now that individuals in China have started to think about as me, as one single consumer, I want to think about my individual rights, rather than think about collectives. China’s always thought about themselves as a collective, so I think that also really addresses the point, I think, about how China increasingly also looks at not only the hard part, the issues they can address with financial power, but towards civil society, this is something that the West understands, but China hasn’t yet grasped. And when we talk about power, you know, the very traditional argument about hard versus soft, that one would argue still, China, in terms of soft power, is very much lacking in experience.
Professor Michael Cox
Two very quick observations and then I’ll pass those straightaway. The China model is largely based on the US model. Actually, and it sounds like a crazy point at one level because it’s such an obviously different system, but nonetheless, I think there’s a fundamental truth in that and that gets me back to that point of, you know, what I’d almost call the Chinese obsession. By the way, in international relations nearly everything that Chinese IR scholars cite are American journals. Where do you want to send your children to school? And you want to send them to the top five schools in the United States and then you go down, 350,000 Chinese students studying in the United States tells me a story about a particularly interesting and complicated kind of relationship. So I think – and what I find, when I’m in China quite honestly, is that a constant narrative, which is very different, however, being perpetrated by the Government, which says that America’s trying to hold us down, that America’s trying to stop us rising. In fact, you could almost say that China’s rise has been facilitated by the United States, ever since the great breakthrough by Henry Kissinger et al in the 1970s and opening up to this, an interesting way in which interdependence overcomes this kind of realist narrative, which is now becoming so dominant.
The other thing is a general question, let me throw it open really, the rise of Asia, and it’s been done and for all sorts of reasons, which are to do with Asia, I accept everything’s to do with that. But would you not agree with me, and I’m sure you do and I hope you do, that the rise of Asia is also dependent on a stable and prosperous West? And so therefore, it’s not one going up against, you know, the other, it is that one has risen because, you know, over the last 50 or 40 years and certainly since the end of the Cold War, globalisation, dare I mention the word here, you know, but that has made an enormous difference, you know, to Asian prosperity and globalisation was, after all, in some sense, is a fundamentally American or Western construction after World War II.
Anyway, much said from here. We now have 20 minutes, and there’s lots of hands going up, so I’m going to begin with a lady over here, because I’m told, by my instructor at the back there, please say who you are and ask a very sharp – short and sharp question, please, thank you. Hello.
Anita Punwani
Hello. Anita Punwani, Independent Risk Advisor. Up until the last point, Jinny, that you made around civil society, our conversations have been framed around the nation state. How important do you think non-state actors, NGOs, wider civil society is and where do their sources of power derive from, if you see them as important?
Professor Michael Cox
Okay, we’ve been very state centric so far, so can people say something about non-state actors? I’m going to pick up and so just go around, there’s a hand here, a gentleman here, yeah, and the gentleman here. Yeah, yeah, alright.
Member
I’m from LSE. I just have a quick question.
Professor Michael Cox
I didn’t know you’re from LSE, but thank you anyway. Yeah, very good, excellent.
Member
To what extent is the rise of Asia and the fall of the West necessarily a binary choice, and is there a potential win set that can satisfy the needs of both powers? I’m a Waltzian realist like anybody else, but for the sake of the Devil’s advocate, I think it’s important to ask.
Professor Michael Cox
You’re a Waltzian realist, very good. Nice to hear that. A gentleman over here, yeah, I’m going round, yeah, but I’ll pick up a few. I’ll come back to the front here. Yeah, how are you?
Freddie Hopkinson
Freddie Hopkinson, House of Commons. I was just wondering, after the election of Modi, where do you equate and where do you place the rise of South Asian powers in the, like, power relationship between the West and Asia described in this debate?
Professor Michael Cox
Okay, Modi. There’s a gentleman next to you has had his hand up and then I’ll come to the front. Yeah, okay, and yeah, hi.
Daniel Trenchard
Hi, I’m Daniel Trenchard from LSE, a master student, LSE IDEAS, and this question is actually for Dr Cherry. Dr Cherry, can you please explain a little bit the China-EU regulations, and to what extent we can see securitisation of those relations? Thank you very much.
Professor Michael Cox
Okay, I’ve got two more to come. There’s a gentleman at the front and then a lady. Okay, is that – yeah, lady go first, yeah, please, yeah.
Martha
And my name is Martha, French Embassy. President Trump is trying to discourage American businesses to stay in China, according to the trade war logic. So how do you think such a policy could impact the production strategy of big western companies?
Professor Michael Cox
Okay and last but by no means least, the gentleman at the front, yeah.
Callum Matthews
Hi. Callum Matthews, King’s College. Looking at China’s external economic policy, to what extent should we see that as a new form of control and a new form of imperialism, perhaps, taking in relation to the BRI and Africa, thinking also about what happened in Sri Lanka with the port that got taken over, so what can we see, is that a new form of control?
Professor Michael Cox
Okay, well, we’ve got quite a few questions there from non-state actors, Modi, Trump and Chinese imperialism, quite a few to be getting on with. Why don’t we selectively select. Jinny, you’re conferring over here with Cherry, so now you’re working out a division of labour here, are you?
Jinny Yan
Yeah, I think it’s…
Professor Michael Cox
Can’t we be reasonable?
Jinny Yan
Yeah, it’s a bit of a – yes, we were trying to allocate resources a bit, yeah.
Professor Michael Cox
Well, while you’re allocating here, why don’t I bring Christopher, in while you’re allocating? Christopher, what do you want to pick up there?
Professor Christopher Coker
I’ll pick up two, but I’ll also just mention one or two other things. I mean, the important thing about NGOs, etc., is that in the West they’re based on the concept of public goods. What is the concept of public goods in China, if there is no Chinese model for export? And there isn’t, according to Xi Jinping. If the Chinese don’t aspire to be cosmopolitan or the citizens of the world, and apparently, they don’t, what is there? If – that’s the question that I throw out, because I don’t have an answer to that. People will then say, “Oh, but there’s a huge boost in environmental NGOs in China.” And we could all be of course, global citizens, when it comes to the environment and the dangers of global warming, and that perhaps is where we should look. But I think that NGOs in China are going to have a very, very tough time, being able to project themselves there internationally, because the number are growing all the time of course. But probably my two colleagues will beg to differ on this.
On Modi, well, if we were here discussing India, I would love to do that. Modi has a civilizational project. The BJP talks about India being a Hindu fundamentalist state. The history books are being rewritten in places like Gujarat, for example. If you go to the National History Museum in Delhi, you’ll find that the Mogul period, one of the great periods of Indian history has largely gone from that exhibition. You will see that next year, the highest statue in the world to a Hindu resistance leader of the 1670s against Mogul occupation, as it’s called, and Shivaji will be open by President Modi, and then an even higher statue will be erected in 2023, to another Hindu resistance leader. So although the first thing that Modi said the day after his election victory is that he hoped to be an inclusive President, there’s very little evidence that he was very, very serious about that. But your question of course, was about how does South Asia fit into the general strategy? And the fact is that from an Indian point of view, they have been completely outfoxed by China, in the last 20 years, completely surrounded, basically. Is the Indian Ocean still Indian, is a very good question that I like to ask, as part of the divide and rule policy of the British, I like to say that however much you may hate us, and they do more than Boris Johnson can ever suspect.
Professor Michael Cox
He wants to go to Northern Ireland and he’ll find it even tougher there, I’m sure.
Professor Christopher Coker
We did put the Indian in Ocean, and what are you going to do about it, basically? And this is why, of course, we have a new strategic narrative now and it’s called the Indo-Pacific and all it is really is a play of the old geopolitical arguments and Mackinder and Eurasia and Mahal talking about naval powers. And guess who’s in the Indo-Pacific? The naval powers, the United States, Japan, Australia, India, and that’s interesting, so things are shaping up, there is a strategic debate. And the last point I would make, Waltzian point, was it your point or somebody else’s?
Dr Yu Jie
Binary point.
Professor Christopher Coker
Binaries, binaries, heavens, and also, it goes back to the point about whether the rise of one country is at the expense of another, and whether we’re looking at a zero sum world. Actually, I think both the United States and China have some really serious problems to contend with domestically. The Chinese economy has peaked. We’re never going to see growth rates like that again, whether you think GDP is important or not. The labour force is shrinking. There’s actually a drain – a brain drain in China at the moment. You have an aging population, rapidly aging, it’s going to overtake Japan quite soon. You have authoritarianism back now in the surveillance state, and you have Xi Jinping overplaying his hand in the Belt and Road Initiative and various things. China wasn’t very unpopular two years ago, it’s very unpopular now amongst the region. He has – he is, I think, a rather dangerous figure, compared with his predecessors, and we think Donald Trump is dangerous. I think Xi Jinping is also, to some extent, a little impatient at the moment to get the Asian Century first. He’s not playing a very good game strategically.
And so you have the United States contending with exactly the same – not the exactly the same issues, but a lot of domestic problems that it’s having to deal with, an inability of the constitutional system to work, that’s extremely important. Social polarisation that we haven’t seen before since the 1890s, that’s – obviously, we have seen it before, as it was in the 1890s, you didn’t pick that one up very quickly, Mick. But we see a society that has a lot of problems. I wouldn’t say that’s a decline. I’d say it’s more dysfunction, and I believe there’s dysfunctionality in China and there’s dysfunctionality in America, and what do you do when you have a situation like that, when you have two nationalist presidents? Xi Jinping is a nationalist and Donald Trump’s a nationalist. They play the adventurist card. They create crises to take people’s minds off it and that is what my concern is, if we’re talking about conflict.
Professor Michael Cox
Yeah, Cherry.
Dr Yu Jie
Right, okay, picking two, that’s right. I’ll start with the civil society questions. I mean, Christopher begin with the debate regarding, you know, public good provision, the role of the Government. This would really go very much the heart of the legitimacy of the one party rule. So, if we are talking about big role of the NGO and of the civil society, mostly in the western sense would be as alternative to providing public services and various things else. Whilst in China they are looking for the NGOs and civil societies being part of the party organs, so if you’re expecting to see a western style, the civil society rising in China, and I think that’s very unlikely. I mean, this whole debate, also could go back to, you know, where is exactly the role of the Government and when the Government should intervene and to what extent the Government should intervene? So I’m afraid that debate depends on how you would continue in different aspects of the economic activities inside China in here.
Now, on the question of the EU China relations, you deliberately asked me in here. I would say up until 2011/2012, the ambience in Europe was still very much in favour of China. But I think it’s because of the China’s enterprises, which invested in the European Union and the Chinese companies themselves have now become a rather formidable competitor, with the European companies both in the Chinese domestic market and also in the foreign market. And this has really meant the Brussels, as well as the major member states of EU countries, beginning to become more hostile towards China. Now, the turning point is really up to from 2015, when a Chinese company, they finally decided to buy a German robotic company, KUKA, and that’s now the Germans and also, the major European countries realise, now is perhaps the time to really contain Chinese so-called interference inside the European Union. And that’s just only one economic element of the story.
The second element is on the ideation of normative power start of story. As you know, EU and China has never really shared the same common values with each other at all. They have said that very loud and clear, and what the European Union have the whole ideas, have engaged with China is basically based on this whole past dependence, so whatever the European Union has done with the Eastern European communist – formal communist member states and try to influence regime change, and that’s what’s European Union’s intention towards China as well, by using economic power, try to influence Chinese political changes. But unfortunately, that will not happen and I’m afraid I will see there’s two side, between Beijing and Brussels going to divide even more and more. But on the other hand, European Union is still going to rely on China economically, so it’s ultimately, like what I’ve said earlier about this made up power to have to choose between the economic reality and ideational division at the end of the day and which side do you have to pick.
Professor Michael Cox
Yeah. How much do you think the 16+1 initiative by China itself has reinforced suspicions in Brussels about China’s intentions towards the EU overall?
Dr Yu Jie
Absolutely, I mean, it’s more about – it’s not just about China’s intention, it’s about how our side perceive China’s intention and acting on those perceptions, and based on those perceptions that make the policies. And 16+1, I mean, 16 different member states have their different wants and needs of China. So if we pick the countries which are in favour of the Chinese Government would be Hungary…
Professor Michael Cox
Czech Republic.
Dr Yu Jie
No, no, no, not even Czech Republic. Czech Republic used to be.
Professor Michael Cox
Used to be, oh.
Dr Yu Jie
But not anymore. Countries like Serbia, so these are the small likeminded group of countries.
Professor Michael Cox
And Italy of course too, which doesn’t fit into the 16+1, but it did provoke an enormous backlash, did it not?
Dr Yu Jie
But I wonder how long Italian Government will last.
Professor Michael Cox
Okay, well, let’s not talk about Governments in this country, shall I? Be very, very careful on that one. Jinny, why don’t we bring you in now. Yeah, thanks.
Jinny Yan
Thank you very much, and again, I want to throw in a little bit of a controversial point here. I think, you know, I want to, first of all, address Belts and Roads because I feel because we produce quite a lot of Belt and Road quantitative research. I want to bring in my angle, because I think Belt and Road, for many, is very much China’s way to assert itself strategically, whether it’s geopolitically, and I absolutely – you know, there are many, many interesting points, as we were discussing, and Peter Frankopan’s book earlier, from a historical perspective, does make sense because Eurasia, as we know it, resource rich, etc. But, you know, China’s intentions may indeed also be defensive rather than aggressive, because if you look at it, the 65 original countries that it started with is indeed, China’s resource trading partners. So, clearly, whether it’s intended for urbanisation to address an aging population, etc., perhaps that’s where it started, but actually, it predates 2013, when President Xi, you know, announced it in Kazakhstan. But his intention is to really influence emerging economies. I don’t deny for one second that some cases, particularly Sri Lanka, Malaysia, etc., were mishandled. But those are all about who negotiated the deals, who were there to ensure that the mitigation of some of these mega infrastructure projects were, you know, brought in other experts to ensure the quality of these roads. But these are kind of the issues and challenges that any infrastructure project would face globally.
I don’t think it’s a Belt and Road issue, it’s more of an infrastructure global infrastructure building issue, and I think Belt and Roads again, we can, you know, go back to that question around binary rise. Belt and Roads, I think is a very, very good example of where, I guess, China saw that it is definitely opportunities to effectively influence the rest of the world because it’s easier, I guess, to influence the emerging economies. Because they are, in a similar state of development, I guess, compared to China, whereas, others, in the West, and particularly in the US, perhaps don’t see it from China’s perspective. So I think that mutual understanding comes from the fact that well, perhaps let’s start with the low hanging fruits by, you know, engaging with emerging economies who are going through similar challenges that we are.
And this argument around exportation of excess capacity, well, yes, I do believe it, China has excess capacity in infrastructure building and why not, you know, try and help others to address that. Similarly, you know, in the UK, we probably have an excess capacity of professional services, and indeed, it is UK professional services that are coming into these projects to actively help to ensure the quality of these projects. And then linking that with NGOs, I had, you know, a series of conversations about the increasing role of NGOs in helping Belt and Road projects, because at the end of the day, it is about the responsibilities. I think, China, after the five year review this year of Belt and Roads, has realised that you do have to work with local NGOs, local governments at the beginning to mitigate risks, rather than firefighting once cases like Sri Lanka, etc., have come to light because that, as a PR campaign, is a failure, clearly.
Professor Michael Cox
Can I pick up just the question here on the Trump question? I mean, it may have been touched upon, but maybe we could address that very, very quickly. My own take on it, for what it’s worth, is that I think the – Trump has been consistent on China. I mean, if you go back to what he said, even before he started campaigning, if you read what he said throughout the campaign, if you look at the people he’s appointed for trade, particularly Lighthizer and others, Peter Navarro and a whole bunch of other people, if you look at every single – and I did this over Christmas, last Christmas, and boy oh boy, my wife was not happy, but I was actually reading through every single US National Security document, starting with the National Security Strategy, through a whole range of other things. The one thing that comes out time and time again is one, China is not a stakeholder, as we had previously imagined, China is a rival. Secondly, China is a revision state. Thirdly, China is adopting new technologies, which challenge our technological hegemony. It’s not just about shoes and vests and ties, it’s about technology. And that China has abandoned the Den Xiaoping line, then, in other words, Xi Jinping represents a qualitatively new direction.
That is why Cherry and I were doing a briefing to a business group earlier this year, and I came out very, very pessimistic on any serious deal on trade, ‘cause I didn’t think the thing was fundamentally about trade. I think it was about a whole bunch of other things. Trade was simply the mask behind which a whole bunch of other questions were being asked by the – by President Trump and his many Advisors, with, by the way, a huge degree of support from the Democrats. So, as I said earlier on, I mean, the United States, may be polarised and divided on nearly everything, as you pointed out, Christopher, but on one thing they seem to be united, take a tough line on China. And, you know, this plays to the gallery, as well as playing to – but it may not play to the corporates, but it does play to them.
We have about four or five minutes left to finish, so I’m going to take two or three quick questions, about 20 hands have gone up. I’ll take the lady in the middle there, I’ll take a gentleman here and the gentleman here, how’s that, and the gentleman over there. Quick and easy, thank you very much. Thank you.
Member
Hello, I’m a member at Chatham House. So, the third point was…
Professor Michael Cox
Just make it one, if you could.
Member
…the right set of institutions, and just domestic institutions, I was wondering if you could maybe provide a few more details on what those might look like?
Professor Michael Cox
Alright, okay. Alright, okay, I picked, yeah, gentleman here, please, thanks.
Huw Jenkins
Thanks, Huw Jenkins, Clifford Chance. I agree very much with Jinny about export of professional services, thank you very much.
Professor Michael Cox
Thank you very much.
Huw Jenkins
You mentioned…
Professor Michael Cox
That’s important to academics, too.
Huw Jenkins
You mentioned, in your roundup, about the power of – or the power of the message, the control of the message, the ability to – and it seems to me that whether China is weak versus the West is in terms of controlling messaging and how those messages are perceived. Does the panel have any advice to how China should go forward on that? Should it be more outspoken and then, perhaps, face criticism or should it just be judged on what it does and not worry too much about the messaging?
Professor Michael Cox
Okay, a question on institutions, a question on messages. I had somebody over here had their hand up, did I not? Oh, gentleman here, sorry. Sorry, come back here. Sorry, gentleman here. Sorry, sitting right in front of me, the worst place to sit, by the way.
Robert Penny
Yeah, clearly.
Professor Michael Cox
Over to you.
Robert Penny
Robert Penny, I’m a guest here, and a good question, you mentioned that there’d been a real shift in the American opinion. From bringing China into the WTO in the 90s and 2002, clearly, [inaudible – 56:51] arrival, that shift seems kind of under-motivated to me, given the speed in which it took place and how significant it is. I just wondered if you had ideas – any ideas of why that change took place so quickly and so categorically?
Professor Michael Cox
Okay, good. Okay, last one to come, was anybody over here? I think there was a gentleman over here. Yeah, you’ve got a mic in your hand already, haven’t you? And there’s a lady behind you, quickly, yeah.
Jamie Mulholland
Yeah, alright. Jamie Mulholland, University of Reading. I am wondering about if anybody can comment on the kind of shift of the US Containment Strategy that seems to be shifting to technology? It seems with the fears before with Russia that China was pushed to create an alternative to the SWIFT for the banking. And now with the technology, which can block Chinese companies from using Intel hardware and Google services, will this have the potential to backfire, not only that it’s going to harm profits of these companies, that it could get people out – companies outside of China as well, looking for alternative to US social media programmes, to US operating systems for Windows, for cell phones and this kind of thing and that ultimately, could undermine the US.
Professor Michael Cox
Yeah. Was there one question over here, no, no? Okay, so we’ve got a few there to go with, who wants to go, institutions or something else?
Jinny Yan
Yeah. So I think two questions are addressed to me, institutions and how does China communicate. So, institutions, what I meant was – well, let’s start with legal institutions. That includes regulatory compliance. A lot of what China talks about today and a lot about behind acc0untability is how long will China take to – I mean, I’ve heard experts in the legal field that – and compliance and regulatory field have said, China’s at least 20/30 years behind the UK, when it comes to that set of institutions. Then we’ve got things like the new rising challenges, in terms of institution, and that is cybersecurity, data protection. China’s moving towards data localisation, and this is one of the key – I think it actually links with the communication thing is that whatever China is trying to prove, China cannot share a lot of data because of that data localisation. And there is an available, I guess, set of, you know, evidence to back – or, you know, what China has to say, so – and then, in terms of how to communicate with the West and the rest of the world. Well, I don’t believe it’s just, you know, by sending a few people out with the right messaging. Actually, influence is more, you know, key.
How do you influence? Well, if China – the time that China can set up institutions like this Chatham House, you know, to try and – well, any institution, LSE IDEAS of course, the idea sharing to mutually understand each other before taking, I guess, a communication strategy. So, I guess, less of official talk, more of engagement at the bottom level, at the academic level, at the professional level, and China is doing that, but I guess it takes time to learn, you know, and appreciate that actually, communicating through the West, rather than just to the West, is actually probably the best answer. And I just want to make one last point, if I may? I think I want to make a point about weaponisation of assets, because that links back to, you know, US, you know, I guess, current policy to, you know, discourage US corporates [inaudible – 61:23] China, and vice versa Chinese companies are being blocked, in many areas in the US as well. And a recent FT article about weaponization of US treasuries, so China’s selling those treasuries, well, unfortunately, we’re living in a very connected world and very globalised world, and something like that is not going to work. As we know, markets move, not to hurt one single individual, but the global markets, so I think everyone will be hurt by weaponization of assets.
Professor Michael Cox
Thanks, Jinny, and Cherry.
Dr Yu Jie
Just very quickly. I mean, this permanent debate on the rule of law and democracy, I mean, I always keep holding this point, I would consider is more – far more important for China to have the rule of law well before the democracy, so because of the rule of law would somehow give more credibility to the country in itself. On the PR issues, I mean, on think tanks, you don’t know how many meeting of 13 on the Chinese think tanks, their mission is to tell a positive story of China. I mean, can I just persuade my compatriots in here, if we have made some mistakes in the past, let’s just admit it, and correcting all mistakes, rather than just saying, everything nice and rosy and a positive, because at the end of day, nobody going to believe us. The more we try to reinforce that story, the less likely China will be – look glorified.
Professor Michael Cox
Yeah, and Christopher, the last word.
Professor Christopher Coker
My last word and very briefly, and it goes back to the question really you raised about power shifts and it goes back to the first point I made, be very careful about the stories you tell yourself. Clinton administration told itself a story about China being a stakeholder, the fast tracking into the WTO and all of that, that was extremely important. The Bush administration, you may recall, started off by identifying China as public enemy number one, but got side-tracked by 9/11. And for the next 12 years, it was just the war on terror and suddenly, they discovered that in fact terrorists can do a lot of damage, but great power war does far more damage. And Obama, as we know from Ben Rhodes’ book and various others, simply didn’t want to hear the bad news that the Chinese were cheating on WTO rules, and that has come home to roost, because the Democrats are as embarrassed about their performance in office as the Republicans were very critical of their performance in office. The Americans have no story now to tell themselves, and that’s the rather frightening thing, and this is where the Thucydides’ Trap comes in, they run out of a narrative, which is very reassuring for them, and that, I think, is rather bad news for all of us.
Professor Michael Cox
Okay, thank you very much, Christopher. I just firstly, want to thank our three speakers. Secondly, I’d like to thank Chatham House and all the people who work here at Chatham House. This won’t be, I hope, the last joint venture, if I might call it, between Chatham House and LSE IDEAS. And last, but by no means, least, I’d like to thank you all for coming along tonight and asking some very, very good questions. Thank you very much everybody. Thank you [applause].
