Author Mark Richards
The Chinese Communist Party held its 19th Congress this week, confirming Xi Jinping in power for another five years. He set out a bold plan for China to play a much greater part in the world economy. Should we in the West be worried?
My eldest son rang me from university in a panic. “I’ve forgotten my headphones. Can you send them?”
“Just buy some more,” I said. “They’ll cost less than the postage.”
No, he said, he really needed these headphones. They were outstanding. Far and away the best headphones he had ever had: the sound quality of headphones worth £100.
“Are you mad?” I said. “You spent a hundred quid on headphones?”
“No,” he said. “I bought them from China. Thirty pounds.”
Napoleon famously said, “Let China sleep. When she wakes, the world will tremble.” This week the 19th Congress of China’s Communist Party was held in Beijing. President Xi was confirmed in power for another five years and – while Europe cannot even agree on when to start the Brexit talks – Xi’s speech laid out plans for China to dominate the world economy. No surprise that Forbes is now suggesting China will overtake America to become the biggest economy in the world as early as next year
Who is Xi Jinping?
He may not have a perma-tan or a tower named after him, but it is arguable that China’s Xi Jinping is the real holder of the ‘most powerful man in the world’ title. He is five years into his theoretical ten-year term and is unquestionably China’s most powerful leader since Mao. So who is he?
Xi Jinping is the General Secretary of the Chinese Communist Party. Born on June 15th, 1953 he is married to Peng Liyuan and has one daughter, who was educated at Harvard. His wife was formerly a very popular singer on Chinese TV and among her hits are those classic rock anthems, People from our Village, My Motherland and In the Field of Hope.
Xi’s father, Xi Zhongxun, was a hero of the Communist revolution and, as such, Xi enjoyed a privileged upbringing as a ‘red princeling.’ All that changed with Chairman Mao’s Cultural Revolution: his father was imprisoned, the family humiliated and one of his sisters committed suicide. At the age of 15 Xi was sent to the countryside to be re-educated. Those were unquestionably tough years – the story is that Xi lived in a cave in the mountains – but he survived and at the age of 22 he returned from the countryside, “full of confidence and with my life goals firm.”
With his father released from prison and rehabilitated, Xi joined the Communist Party and began a steady, if unspectacular, rise through the ranks. The only time he drew attention to himself was when he married his far-more-famous wife. ‘Who is Xi Jinping?’ went the joke: ‘He is Peng Liyuan’s husband.’
By his 50s he was a senior party leader, but someone still with a reputation for dull competency: when he became Communist party leader in 2012 he was very much a compromise choice. No-one expected the changes – described in some quarters as ‘shock and awe’ – that would follow. Corruption was ruthlessly weeded out and a series of show-trials dealt with any pretenders to Xi’s crown.
One Belt, One Road
While Europe continues to bicker, China is calmly pressing ahead with plans to dominate the world economy. It has a domestic population approaching 1.4bn – nearly one-fifth of the world population of 7.5bn (do not click the link: it is terrifying). The UN estimates that the population of the world will increase to 11bn by the end of this century, with most of that growth coming in areas China intends to reach and trade with through the massive infrastructure project known as ‘One Belt, One Road.’
The initiative was first mooted by Xi Jinping around 2013, and sees China’s push into global economic affairs extending through a land-based Silk Road Economic Belt (SREB) and the Maritime Silk Road (MSR), with the focus being on infrastructure investment, construction, railways and highways, automobiles, power and iron and steel.
Speaking at the Congress Xi told his attentive audience that China will “take centre stage in the world.” The Belt and Road are designed to do exactly that. The land-based Belt runs across Asia and through Europe. The Maritime Road (yes, you would have thought that the ‘road’ would be on land…) reaches South East Asia, Oceania and North Africa. More than 65 countries, 4.4bn people (63% of the world’s population) and 29% of the world’s GDP are in its path.
Importantly the countries it reaches are those countries poised for rapid growth – and they have been eager to accept China’s offer of help with infrastructure projects. Kazakhstan (population 18m) is a good example. Chinese investment in the country has stimulated trade and investment: in return, China gains access to the country’s vast mineral resources, which may be vital to China’s future energy needs.
Rating agency Fitch estimates that $900bn of projects are planned or are already underway – but that this could rise to as high as $4tn. Who will pay for it all is an interesting question, and one of the problems Xi Jinping will need to deal with in his next five years in power is the high level of debt in the Chinese economy – both personal and corporate.
Is the Belt and Road just a naked power grab?
Many in the West would answer that question with a simple ‘yes.’ Strategic investments in Nigerian railways or Kenya’s mineral extraction industries certainly benefit Xi’s long-term plans and they secure the commodities China’s emerging middle class will need. But economic investment also provides a stabilising influence. The China-Pakistan Economic Corridor, a $62bn collection of job creation projects largely centred on modernising Pakistan’s transportation networks, has provided jobs for thousands of young men who might otherwise have been bored, unemployed and – eventually – radicalised.
India may disapprove of stronger links between China and Pakistan, but people in London, Paris and Brussels may have reason to be grateful – at least for their security. The outlook for jobs and businesses may not be as rosy: my son is not going to be buying headphones made in Western Europe anytime soon…
What the Belt and Road Initiative does is give China access not just to vast natural resources, but also to a huge pool of labour – and whatever you think about the rights and wrongs of the situation, that is not a labour market wrapped in red tape about a national living wage or health and safety.
In Brussels Theresa May and the EU seem to have held talks about when the talks might start. In Beijing, the world’s most powerful man – untroubled by petty trivialities like democracy – has laid out his vision for the next five years and sent the delegates back to work.
…Delegates who may have been glad to escape the conference hall. Xi Jinping spoke for 3 hours and 23 minutes to an audience that was by no means in the first flush of youth. Given that popping out in the leader’s speech for a ‘comfort break’ was almost certainly a treasonous offence, however, did they cope? Another of the great mysteries of the East…