Understanding China2019

Major events :

Defeat in the First Opium War 1839-42
United Kingdom kept profit from opium flowing to England

U nequal treaties with England, France, Russia, Japan, Russia
Nanking, Whampoa, Aigun Shimonoseki

Taiping Rebellion 1850–64
a unique interpretation of Christianity was combined it with Chinese folk religion

Defeat in the Second Opium War 1856–1860
British and French kept commercial control

Defeat in the First Sino-Japanese War 1894–1895
signaled Japan area dominance

Eight-Nation Alliance stops Boxer uprising 1899–1901
fueled by resentment against Christian missionaries and the growth of foreign spheres of influence

British invasion of Tibet 1903–1904

Japan's Twenty-One Demands 1915 by Japan

Japanese invasion of Manchuria 1931-1932

Second Sino-Japanese War 1937–1945

China's Development Model

Followed Tiger Country Development Procedures
South Korea, Taiwan, Singapore, and finally China
All extremely poor and feared economic collapse
Lenin's Authoritarian Approach worked as fear allowed draconian measures

Like earlier Tigers, China's Vanguard Communist Party
also took Big risks and Big Economic Gains

1. Peasant farmers began taking Communal land, production increase dramatically, Communist Party
let this dangerous activity spread and gave up complete control of peasant lives in hopes of creating party loyalty.

2. The Party gave up control of urban industry by directing sales revenue to flow first to companies
with a tax system instituted to share revenue with the state. Implementation required moving 45
million inefficient industrial workers to service industries over ten years.

3. Government Inefficient was cut in half.

Like earlier Tigers, success made a simple economy complex, a crisis ensued, change was needed.
See Rise-China-Economic-Creating-Superpower
Chinas Economic Miracle in Context

Similar problems to those of earlier Tigers surfaced
1. Over leveraging created debt bubbles, inflation and bankruptcies.
2. Many big, often party owed inefficient companies inefficient were closed.
3. Political unrest developed.
4. Strong power groups, often with Party connections, developed.

Tiger's Managing Change

Taiwan orchestrating a slow liberalization of policy increase economic activity and enhancing Party political control.

South Korea's intransient strongman refused changes so reformers shot him. Union reactions to the takeover
somewhat protected workers but the Asian financial crisis gave Western bankers more influence.

China's market reforms caused much stress.
Leader reacted with a harmonious atmosphere but growth slowed.
Government became sluggish.

5. Strategy

Plan
Subdue opposition
Implement reforms
Protect party from repudiation/retaliation

The Goals
Better allocation of economic resources
Create a consensus with centralized power in a strong leader
Smaller Politburo Standing Committees
More military controls
Create a NSC to control corruption
Create smaller more influential mart control groups

Political Control Always Wins
With Mayo, politics were in command
With Ping, economic reform was most important
With Xi, politics is back in command

Analysis
Xi is unwilling to make tough decisions because of conflicting goals.
Difficulties arise when balance economic and political goals
Examples:
Party control still minimized State Owned Enterprise efficiency.
Strengthen the rule of law but legal decisions are still determined by Party.

Result: Success is getting more difficult.
1. Resource allocation is poor,
2. Pushback, especially from local governments.
3. Military most improved.

from China Crisis of Success video Dr. William Overholt

China's Crisis of Success: Book Talk with Dr. William Overholt

Editor's Notes:
1. Xi is the creation of the Party, Putin was the creation of Putin.
2. Belt in Road must gain cooperation from dysfunctional governments,
faces Muslim Ethnic Difficulties, and at present, but it doesn't face
the historical land threat from the East Asia

3. The reality is that the Chinese Communist Party (the CCP) is engaged
    in the most egregious and widespread human rights abuses since Stalin,
    Mao, Pol Pot, or Hitler. Those abuses have been ongoing for decades,
    but appear to have gotten worse since Xi Jingpin took the helm of the CCP

Claim: China will overtake US as "the" economic power.

Assumption 1 China's economic growth has been unprecedented is wrong.

China's recent growth ranks behind Japan and S Korea.
Counterpoint: China's GDP growth has been unprecedented
with fruits going to a developing small middle class.
Can this increase continue?

Assumption 2 An illiberal political economy will lass many years.

History has shown no successful illiberal economies.

See A Red/Blue Risk Divide taking risks is essential to our lives and fundamental to our sense of autonomy.

Allison Schrage, City Journal

China's Political Evolution

Plan Basics

1) Communist Party's prerogatives, power, and presage are paramount

To maintain its legitimacy it must take back day-to day control of daily
activity from the administrative apparatus.

2) Xi Jinping is a Marxist with a strong believes in the Hegel dialectics
as it relates to contradictions among the people and the resulting instability.

a. He ordered studies of Historical and Dialectical materialism to counter
China's move toward Neoliberalism.

b. Xi knew economic growth must continue but not beyond the point
where history indicated income/capita was high enough to trigger Neoliberalism.

3) Educating toward nationalism using modern propaganda technique
would delay the Neoliberalism income activation point.

a. China’s historical greatness has always be base upon a
strong, authoritarian hierarchical states grounded in Confucian ideology.
b. He is building a modern Confucian, Communist State. from Kevin Rudd

China’s World View Guides Strategic Policy

Prelude: While dynamic over the last 100 years, the underlying philosophical foundation
has always been Marxian Historical Dialectical Materials

1) Theoretical Alternatives

a. Despair of Realism: all super powers want to maximize their share of world power and dominate the international system
b. Hope of Liberal Internationalist: corporation in sustaining world order with an internationally rule-based systems

c. Control of Strutted Marxism
d. Constructivism Understanding: cultural understanding and rationality used to design and manage international systems.
e. Amalgamation of alternatives: different theories for each unique relationship

2) Legitimacy and Survival Requirements of China's International Policy

a. Communist Party Control is at the center of their policy determination.

Chinese citizens are using a new multimedia app from the propaganda ministry
that teaches people to think like President Xi Jinping.

High scorers are praised by state media, low scorers are stigmatized at work and school.
It's part of Xi's bid to bolster the power and appeal of the Communist Party.
Example of authoritarian governments using social media . The app is even used as a dating platform! source 4/8/19

b) Political Stability requires Territorial Integrity over Shenyang, Tibet, Taiwan, and South Chins Sea.
c) Party legitimacy requires Improved living standards and a powerful international Chinese state.

d) Sustainable Environmental Economic Development with clean air, water, and soil is important.
e) Eastern Territorial Integrity free of U.S. influence and elimination of threats
similar to those of 20th century Japanese militarism.

f) Western Territory Integrity eliminating the long history of Western and Northern invaders.
g) Revised/new International
Rule Based Order resulting from China's meaningful economic and military development.
End to existing U.S. post WW 2 hard power resulting from her Russia and
China aided WW 2 success with a China led soft power system.

3) Chinese International Policy: An Amalgamation of Alternative Theories

a) Marxian world view

b) Realist view of military power

c) Liberalist Internationalist economic view

d) Establishment view of banking and private corporations

e) Constructive view of China's role in managing world order

China's Aggressive Strategic International Plan
See On Grand Strategy

1. Original Plan Hide Strengths, Bide Time

a. Xi now has more centralized political power.
b. U.S. decline means little reaction to Chinese militarism.
c. China is now an indispensible global economic power for many nations who support/accept her increased power projection.
d. Xi has grown impatient with slowness of Chinese bureaucracy and relaxed many of international governance "players."

2. A New Confident, Independent, International Plan
Will Restore China's Greatness

a) Expand South China Sea Militarism

b) Build a New Silk Road to
1) increase trade
2) provide foreign investment
3) provide infrastructure

c. Asian Infrastructure Development Bank launched and capitalized

d. Multilateral Diplomatic Activism for launching and participation in new world-wide initiatives

e. New Navel Bases in Sri Lanka, Pakistan, and Djiboutif Military exercises with Russia

Editor's Note:
In a liberal Democracy, business does much of the investment.
In 2017, the U.S. Invested > $100 billion in China alone.

3) Well Conceived Grand Strategy

a) Based on a clearly defined policy purposes

b) Think a situation through, observe in detail as it relates to historical trends

c) Set a new direction

4) Recent Changes

a) Enhanced role of Communist Party and Ideology
to counter China's lethargic corrupt state bureaucracy
1. Enhanced CPC authority by replacing state control and
Foreign Relations and Financial Reforms with party control
to stop stonewalling reforms which had gone on for years.
Consolidating Xi’s Position and China’s Direction: A Readout of China’s Annual Legislative Session video 3/18

2. Reasoning could be: Marxian, Nationalistic, Authoritarian model of world capitalism to compete with liberal democracy.
Xi's concept of a future world community with a mechanistic attempt to invigorate diplomatic community so as to be more
creative with a more forceful use of Theory over Policy.

3. New State Diplomacy enhances State Capitalism, pragmatism is gone, national interest enhanced by a national vision

b) Ideological Confidence increased
1. History now favors China according to Marxian dialectic analysis.
2. Nothing is random about what is unfolding.
It is the result of the immutable laws of economic development.
3. A Marxian Dialectic Turning Point is indicated by the relative decline of US/West and China's rise.
4. Current historical juncture represents a strategic opportunity for China.

5. How a one-party state ideates using political topic/lingua franca is important

c) More Sharply Focused Chinese Diplomacy

d) China to Lead/Improve Global Government Reform
1. In 2014, Xi saw an impending struggle for the future of International Global Order

2. China must now control the reform of international order
a. organization like UN, WTO ...
b. U.S. system of global alliance enhances and ensures only her own definition international security.

3. Change U.S. Controlled Global Governess based on a complex web of world organizations
using international based treaty, law and shared sovereignty.

4. Global Governance Improvement

5. Reasons for success
a. Diplomacy based on Chinese Socialism increase fairness and justice
b. U.S. Ignores World Order i.e. Climate Accord, UN Refuge System, WTO.
6. Controlling international institutions is first step

5) China's Big Fear
a) China is a trading nation with a
b) Land military used mainly an internal policy force.
c) Must control the China Sea with a Navy that is many years behind US navy.
d) U.S. uses sanctions, then blockades, to enforce her will.
Source

6) What is China’s Grand Strategy? video

Editor's Note: After a record $46 billion of completed 2016 Chinese foreign direct investment (FDI) in the US,
Chinese investment dropped sharply to just $29 billion in 2017. It was due to greater scrutiny in Beijing
over outbound flows as well as tougher US regulatory reviews of inbound acquisitions.

Editor's Note: Many China experts hold that this well designed and hold it
in the same high esteem the first few Soviet Russian 5 year plans.

See Foreign Relations Power International Plan U.S. - China , N. K. the Future of the Global Order

See Responsible Competition and the Future of U.S.-China Relations
Seven critical questions for strategy

Responding to China: Strategic Plan Source K. Rudd

See On Grand Strategy

1. Overview

U.S. Government not designed for determining Governmental Grand Strategies
a. Separation of powers requires compromise
b. Many want limited government
c. Private Sector Renewals solve problems
Recent exception was after WW 2
a. After WW2, the Long Telegram from US Moscow embassy described a very aggressive Soviet Union.
b. a 40-year multi-administration coordinated containment strategy resulted.
c. It worked-The Cold War ended peacefully.
Why Containment Worked
a. Soviet's fragile Economy and Society caused implosion from within.
b. China is very different
Trump Would Say We Have a Strategic Policy
a. National Security Strategy 12/2017
b. National Defense Strategy 1/2018
c. Future of US Defense Manufacturing Industry issued mid 2018

2. US Strategic Plan

Era of Strategic Engagement Replaced by Strategic Competition
a. Engagement-you engage and one side backs down.
b. Competition is more adversarial but no guidelines have been given.
c. Rules to be determined

Editor's Examples. U.S. threatening Germany over Chinese 5G
The Trump administration is willing to cut intelligence-sharing with Germany unless
Berlin bans Chinese equipment maker Huawei from its 5G networks.
Washington is pressuring Europe more broadly to drop Chinese 5G
suppliers over concerns they could give Beijing backdoor access to
sensitive communications, data, and networks. Germany is crafting new
regulations meant to address these concerns, but it won't impose a blanket
ban that could anger China and push up the cost of building a 5G network.
We're watching two things here: first, are those new German rules enough
for the Trump administration? Second, will Trump's own (somewhat fickle)
approach towards Chinese 5G suppliers (like Huawei) turn out to be as
harsh as what he's asking of Europe? Source
See GZERO World with former Obama Defense Secretary Ash Carter

3. Liberal democratic capitalistic markets have not resulting in Chinese liberalization.

A. Recent Chinese actions not compatible with America's Interest.

1. US strategy of treating her as a strategic competitor is correct
because she is a trade predator and as a dictatorship, she
combines military, economic and politics power. Without the TPP,
successful opposition by US backed business and financial
oligarchs will be difficult.

2. She uses perceived difficulties with our system to influence allies.

3. Military expansion to control the China Sea
is like the US control of the Gulf of Mexico.

Free trade must be managed by an agreed upon economic playbook
much like the one set up after WWW 2 at Brenton Woods when
the US took control of world trade.

B. Rudd: Washington's latest attitude toward China is not positive.

a. Makes any kind of convergence of societies difficult

b. Movement toward McCarthyism in both .US. and Australia
is not a good for International Relations.

C. Geopolitical Factors for Next Four Years

a. China under Xi Jinping "will resist any forces: economic, social,
political, or foreign which in any way challenge the long-term
survival of the Communist Party.

b. Strong-man, long-time party member, assistant Vice Premier
Li_Keqiang wants to move toward markets which rankle
conservative fellow politburo bureau members. Source Video

Korean Peninsula Goals

1) China wants

a) Pro or Neutral border allies free of U.S. influence

b. No Nuclear Weapons

c. Unification should mean neutrality, no foreign troops

2) U.S. wants No Nuclear Weapons

3) Both China and US are practicing containment
George Friedman of Geo Political Futures feels N. K knows this
and does a lot of testing but little delivery system development.

4) Status Quo

George Friedman believes status quo has been everyone policy but needs vary.
China wants U.S. China dependency.
N. Korea, a very poor nation, needs nuclear program, not weapons, as a bargaining chip to get financial assistance.
United States has a "phobia" against nuclear weapons causing N. Korean to be more and more bellicose.
S. Korea doesn't want unification because with it comes northern debt.

Source: Is China the biggest geopolitical risk to the US?

A Clash of Civilizations
Confucian Values	American Values
Authority Creates Hierarchy Subordination of individual rights	Democracy Creates Equality Allows Individualism

Supremacy of the state over society

Supremacy of society over individual

Distrust the government

Oppose authority

Importance of consensus
to avoid confrontation

Importance of checks and balances
to insure freedom

China defines identity in racial terms

The Chinese people of the same race, blood, and culture.
The mirror test determine who you are.
Chinese living in other cultures are in some sense,
subject of the Chinese government.

External affairs are an extension of their concept of internal order.
Harmony through hierarchy with
China's Leader at the top of the world.

Is World Dominance Moving Eastward? Source:/ Six Open-Source Killer Apps Monopolies Created Western Dominance Is Monopoly Ending. Is Dominance Moving Eastward?
Competition among many countries and organizations within countries beginning with the 12th century City of London Corporation Monolithic State of China where advance passing a monstrous 3-day difficult memorization test.
Scientific Revolution methods meant control over nature so 16th Century Newtonian Physics created accurate ballistics. Used only in Europe, the neighboring Ottoman Empire felt it was blasphemous to probe the mind of God.
Property Rights based on the Rule of Law, not Democracy allowed for the accumulation of land. In N. America an Indentured Servants signed a contract, work, got 100 acres of land. In S. America, ancestors of conquistadores kept property. Freedom is rooted in private property right and the protection of law. They are the basis of the Western Model of Representative Government
Modern Medicine in late 19th century began curing infectious diseases doubled expected life span
Consumer Society required for Industrial Revolution to have a point propels economic growth. Japan was the first Eastern Society to embrace it. while Gandhi proposed to institutionalize poverty, make it permanent,
The Work Ethic is not peculiarly to protestant as with incentives many societies work. Poor countries work most, US. for a rich country, is close behind, with Christian Europe working least.
Neil Fergusson Three Questions Can You Delete These Apps and is the Western World Attempting Deletions? Does the Sequence of the Download Matter and Could Africa Get that Sequencing Wrong? A transmission to Democracy is difficult without first secure private property rights are required for. Can China be free without property rights and rule of law protection?

Sundry

What is China’s Grand Strategy? You Tube

Adjusting to the China Shock

Bremmer Interviews Dan Rather

China's Growing Clout in Latin America