The Rise and Future of China at the 70th anniversary

Autor: Financial Market
Timp de citit: 4 minute

China celebrates the 70th anniversary of the founding of the People’s Republic of China today. It has been a great and terrible time for China, as history has been for most countries. But China is a nation on a scale that dwarfs other countries – and, therefore, both its greatness and tragedy dwarf those of other countries, writes George Friedman, the founder of Geopolitical Futures.

The story begins a century before the PRC’s founding. In the mid-19th century, British merchants approached China, as they approached most of the rest of the world. When they arrived in the 1840s, China was the largest economy in the world.

Industrialization had only just begun, so the machinery did not yet define the size of an economy. Rather, it was defined by land and labor, and in these areas, China towered over most of the world. Meanwhile, Britain’s industrial revolution was accelerating, and it was searching for raw materials to fuel its industry and markets in which to sell its products. It was inevitable that British industrialism and mercantilism and Chinese pre-industrialism and mercantilism would meet, and meet violently.

The British wanted to sell more than just industrial products to China; they wanted to sell opium. The British were coming to dominate India, which had vast amounts of opium. The drug was banned by the Qing Dynasty that ruled China, so the British smuggled opium into China, first covertly and then by force of arms.

The opium destroyed many lives in China, as it did in all countries, while the British made vast amounts of money from the trade. As they discovered China, they discovered potential markets for many goods and labor to produce them. They demanded that areas like Hong Kong be ceded to British rule to protect their economic interests. The Qing Dynasty, weakened by the British, had no choice but to concede. Over time the British were joined by the French, Germans, Japanese and Americans, among others.

By the 1990s and 2000s, China was the place for foreigners to go, hoping to make their fortune and find exotic adventure.

Foreigners operated along the coast, and the coast was tied to foreigners. They sold items to China, and in China, they manufactured items for sale in their home countries. The coast remained Chinese, but economically it faced outward to the world, not inward to the rest of China. The coast was where concessions were under the control of foreigners, and many Chinese who lived there prospered from this relationship.

But over time, this generated complex systems of conflict. Chinese factions fought over relationships with foreigners. Foreigners conspired with each other. The central government was deeply divided and fought internally. Interior regions fought to secure some of the coastal wealth. It is hard to capture the complexity of the violence and the suffering it imposed. Coastal dwellers became wealthy. The peasants of the interior became, if anything, poorer.

The Chinese had cheap labor, which meant that manufacturing in China gave foreign companies a price advantage in their own markets. The Chinese were also hungry for foreign-manufactured products that they could sell in China or use to manufacture more complex products.

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Those Chinese who participated in this trade prospered enormously and therefore gained political power. But they depended on their foreign business relationships for trade. They had to subordinate themselves to the foreigners economically and politically to maintain that power. To do so, they had to reach out to the West to maintain an internal balance of power that focused on fighting each other rather than threatening their business interests on the coast.

This resulted in a multi-sided civil war, defined not by great issues like in the United States but numerous complex local issues, almost incomprehensible to any but those who lived as part of them. And caught in the middle was the vast number of Chinese who simply wanted to live, or live a little better, and found themselves surrounded by ruthless violence.

This was not new to China. Such conflicts had been present long before the foreigners came, and when they exploded, dynasties fell. And so too did the hapless Qing Dynasty, giving way to the Republic of China under Sun Yat-sen, a Honolulu-educated Christian who represented to many Chinese the foreign influence that was tearing their country apart.

The Communist Party of China emerged from this situation. On the surface, it was a Marxist party, focusing on class struggle and the creation of a communist paradise. But that Marxism was intertwined with nationalism. The class struggle had to be against foreign interests and their Chinese partners.

Therefore, class interest and national interest intersected. From the beginning, the CPC could not define itself except as a party committed to freeing China from foreign imperialism. Indeed, when Mao Zedong tried to stage a worker’s uprising, it failed.

The workers had interests in common with the foreigners – they were wealthier than their cousins in the interior. Mao led the legendary Long March to the interior to raise a peasant army to resist the foreigners’ Chinese allies and expel the foreigners altogether. This appealed to the peasant class, and even if “Das Kapital” did not regard them as a revolutionary class, they were enemies of foreigners and the Chinese coast, and that was good enough.

Japan’s World War II defeat in China was followed by the defeat of the United States, who advised Chiang Kai-shek, a leader who sought to maintain the system founded a century before. Mao understood that China could never be secure while the concessions operated in any way.

When China was engaged in global trade, parts of it became wealthy, other parts sank into worse poverty, and worst of all, China was divided and weak. Without internal strength and cohesion, China would always be exploited. Mao slammed the door shut on most trade and imposed the party’s will over internal decisions, rooting out alternative centers of power as best he could with the Great Leap Forward and the Cultural Revolution, designed to ensure that the bureaucracy would not usurp his power.

Author: George Friedman, Geopolitical Futures.

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