Understanding the China miracle

Understanding China in the pretext of the Great Game is essential for a comprehensive bird’s eye vision of the prevailing global scenario of that time, and how it bears on the present. Since the First Opium War (1839-42), China had had to sign several Unequal Treaties with the imperial powers, entering China into the ‘century of humiliation’. In these treaties, China had to cede several of its ports to Britain and France; all the land north of the Amur River was ceded to Russia; and Taiwan and Korea were put in Japan’s pocket. And after the Communist Revolution in Russia (1917), China was the next battleground for communism too.

The Boxers rose up in rebellion against foreign control and intervention in northeast China in 1898, this rebellion was crushed brutally by an eight-state alliance of the imperialists. The next year, the United States announced its generous Open-Door policy according to which all contending parties would have equal opportunities in China, furthering China into exploitation and subjugation. Several decades of failed wars and humiliating treaties reduced the Qing into mere puppets.

With the advent of the communist revolutions around the WWI period, China too was to become a theatre for communist tug-of-war. Here the centres for revolution were two: one, based in Japan, had Western backing; the other was based in Leninist Russia. The Western-backed Kuomintang (KMT), founded by Sun Yat Sen in 1905, staged the Xinhai Revolution (1911) that overthrew China’s last imperial dynasty, the Qing.

Meanwhile, on Russian soil, the Communist Party of China (CPC) was founded under purely Leninist ideology, under the Comintern. In WWII, KMT and CPC unified their forces to fight the invading forces of Japan, and with the end of the Japan chapter they re-ensued the civil war. China’s civil war was now also a war between the US behind the KMT and Russia behind CPC, and it ended in 1949 with CPC victory under Mao Zedong, while KMT was forced to retreat into Taiwan. In 1949, Mao declared the establishment of the People’s Republic of China thus permanently entering China into the communist club with Russia at its back.

So, while China had gone through several decades of failed wars and brutal episodes like the Taiping Rebellion (20 million killed) and the Boxer Rebellion, and the humiliating treaties that had reduced the Qing emperors into mere puppets in the hands of the imperial masters — it comes out loudly as to how China became a veto state right after WWII from such a meek position.

The truth was, that the US, who was backing the KMT, was of the idea that with their support, KMT (Taiwan) would eventually overthrow the CPC in mainland China and thus KMT-China would become another pro-US veto power in the UN, but that never happened. Meanwhile, the US and its allies kept China economically isolated as they heavily sanctioned this communist state. This isolation was reversed only with president Nixon’s week-long visit to China that Nixon dubbed as “the week that changed the world”, in 1971, when the US lifted trade barriers and Chinese economy was opened to the capitalist world.

All this was 25 years after the US gained complete control over Japan and at a point when Japan’s economic might was becoming too excessive and alarming for the US. In the 1980s, the US accused the Japanese economy of effecting 500,000 American jobs, and became fearful of Japan’s penetration in key global markets, ranging from textiles through ship building and from steel to automobiles and high-technology electronics.

And perhaps it was also a time that the US deemed right for jumping into mainland Asia using Japan as the jumping board, as it had originally planned. China was seen at that time as a new market place, sprawling with cheap labour and ample land for industrial activities. Since then, the country has been open to foreign investments, privatisation and entrepreneurship, allowing China to become the world’s fastest-growing economies, on average doubling its GDP every eight years, with real GDP growth averaging 9.5% in 2018, a pace described by the World Bank as “the fastest sustained expansion by a major economy in history.”

What needs to be reckoned is the fact that as Japan was being pushed into the punishment phase of its ‘two lost decades’ of economic stagnation from 1991 to 2010, at the same time China was being favoured for unprecedented growth, and now when China itself is posing the threat of surpassing the US and European economies, the US is trying to impose the same punishment on China with the Trade War.

The difference between China and Japan that may prove as China’s good-augur, however, is the staggering amount of surplus that China has accumulated and its ‘entrepreneurship as a national character’ that has led it to plan a global infrastructure project that will change the way commerce is done in the world. This has been China’s ability to judge the points of saturation in its own economy and those that dictate international economies and to take leaps abounding the future.

China’s Made in China (MIC) 2025 plan, announced in 2015, that talks of intelligent manufacturing in aerospace, high-tech ship building, medical equipment, energy and power, and its intention of spending heavily in China’s own research and development, shows China’s futuristic ambitions that will specially focus on innovative fields like ‘new materials’ and ‘information technology’.

So, the lesson in China’s success story is: understanding the fluid nature of the global economy, wherein no status is permanent, and all indicators are constantly facing their peaks and downs. Nations that are not ready to re-innovate their success, and find fresh avenues of business and ways of creating and embracing change in commerce, will be crushed beneath the wheels of obsoleteness and decay. Like Iqbal said “apni dunya aap paida ker agar zindoon mein hai”, the secret of conquering the world of commerce lies in creativity, innovation and newness.

Published in The Express Tribune, October 16^th, 2020.

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