China Inc: The Celestial Empire Is Changing Direction

China Inc: The Celestial Empire Is Changing Direction


by Andrea Colli, Dept. of Policy Analysis and Public Management, Bocconi
Translated by Richard Greenslade

Everyone knows that Chinese saying, attributed to Confucius, which goes: “just sit down on the riverside, sooner or later you will see your enemy’s body passing by”. Mistakenly, this is interpreted as a praise for “quiet laziness”. In reality, the perspective is different: time has to be used properly in order to prepare yourself to meet your enemy. How much time? All the time that is necessary.
In the case of China, for instance, it took around one hundred and fifty years watching for the body of the enemy to pass by. Since the beginning of the new millennium, when it officially joined the WTO in 2001, China has steadily increased its relevance as a source of imports for Europe, now accounting for 20 % of EU importation. More important, China sells more than it buys from Europe: the EU's trade deficit with China topped a record of 180 billion Euros in 2015 and 175 billion in 2016. China, which imports machinery, vehicles, aircrafts and chemicals from Europe, is actively building up production capacity and competences – and will soon reduce its need for European imports. While westward flows of trade will remain stable, or presumably grow in the future, the eastward flows will decrease due to the fast pace of technological catching up.
Of course, this is all about globalization, and globalization is made, among the other things, of free and intense trade exchanges thanks to the opportunities provided by technology, and the support of institutions. The enormous efforts put by the Chinese government into the “one belt, one road” project (OBOR) are accompanied by intense activity at the level of international diplomacy. In Davos, before a half-shocked, half-relieved audience, the Chinese President Xi Jinping – leader of a Communist country - eagerly assumed for it the role of “white knight” of a globalization threatened by mounting populism.
“Historical sensibility”, that is, the ability to think historically about the present, is useful for a better understanding of present issues, and this story of the tormented China-Europe relationship is no exception.
First, it is a very “old”, and turbulent, relationship. Europeans are bound to a Eurocentric vision of the World’s history, and part of this is the epic celebration of European explorations and discoveries, and of the outstanding technological innovations which made them possible. The triumphalism surrounding the history of the Western “conquest” underestimates the fact that while the West was desperately looking for the Asian riches, the same could not be said for the Asians. Apart from the mythical, yet isolated, episode of the travels of the admiral and explorer Zheng He in the 15th century, there is little, or no evidence of Chinese equivalents of Columbus, Magellan or Caboto, nothing comparable to the various East India companies set up by Europeans in order to get an easier access to Asian riches. Chinese, on the contrary, were adamant about their superiority. “As your Ambassador can see for himself” – wrote Celestial Emperor Quian Long to King George III in 1793 – “we possess all things. I set no value on objects strange or ingenious, and have no use for your country's manufactures”. But Europeans wanted China, and were ready to do everything to have her.
Second, Europeans succeeded in subjugating one of the most ancient Empires in the World’s history. The way was subtle, and horrible. It was opium, which the British exported from India and Persia, a “shameful trade” which led to Chinese reaction, to two wars won by European technological superiority, and to a growing political weakness of the Celestial Emperors. China entered the first globalization wave in a peripheral position. Once the center of the World, it was now even less than a colony – it was formally a proud Empire, but it was ruled from Europe.
Third: The Communist revolution was thus, in this perspective, and not surprisingly, also a way to get rid of European interference in China’s internal affairs. Wounded in her self-esteem, China secluded itself from the rest of the World, in a desperate effort to be self-sufficient. And she was not alone: in 1954 it was India, now free from a multi-centennial British rule, to sign with China the “Five principles of peaceful coexistence”, among which the first was the idea of “mutual respect for each other’s territorial integrity and sovereignty”. Principles often recalled by Chinese leadership’s approach to international relations: "What we hope to create is a big family of harmonious co-existence".
Last, when China opened at the end of the 1970s, the West turned its appetite back on. China’s “riches” were, then, people, that is cheap labor, which Europeans (and not only them) desperately needed. But this time it was different. China was, and is, no longer a giant, weak and failing Empire, but a nation willing to catch up quickly, disciplined under a strong political leadership.
Misbehavior is easily forgotten by those who misbehave. Europe has thus forgotten her responsibilities in dealing with China – but China has not. One can interpret the current Chinese approach to international relations in the light of Opium Wars, and of the following subjugation. Or can also simply admit what is plainly evident, that is that China is dealing at best, finally, with the opportunities provided by her endowments. It would be better for Europeans to go back again to history textbooks – and quickly, and start reflecting on their loss of hegemony.

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