CHINA
THE GIANT JUGGERNAUT
PART 10
2022 APRIL ISSUE
Written by : Andrew Sia
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While Xi Jinping is Eager to Build Up His Legacy
China entering into 2022 has been tripped over by the Covid-19 lockdowns that it enforced on itself in order to be in line with Xi Jinping’s zero-covid policy. It resulted the lockdown of one of its largest cities, Xi’an, with the population of 13 million.
Coming along from 2021 are the regulations of the internet companies, the shaky property market, the energy shortage, declining births and aging population, setting the moral standard of the country and many others, are just what the President Xi Jinping wants for the reforms. It is known to the world that China lacks the elections and institutions that enable liberal democracies to correct policy failures it had. Instead it is using a collective mechanism for passing any resolutions and their voting procedures are rubber stamping for what the leaders, and in this case it is what Xi Jinping wants as he has his hands in everything.
It seemed that the country has unable to learn from the mistakes that Mao Zedong made, and since Mao’s death in 1976 a self-corrective mechanism via collective decision making, through a central committee, and a term limits in the Communist Party’s upper echelons have been developed. It looks like Xi is going to overturn this and appoint himself for the third term, and some even speculated that he will go for its fourth term, to make it a lifelong.
In 1978 when the paramount leader Deng Xiaoping came in power, he tried the policy making through endless experiments. In his time many things were introduced, and the blending of the state enterprises with the private enterprises successfully dubbed socialism with the Chinese characteristics. He encouraged private sectors to come forward and encouraged them to set up their businesses. The establishing of “special economic zones” and the first successful one was in Shenzhen, a sleepy village across the border of Hong Kong. It drew the businessmen from Hong Kong and Taiwan to set up their operations there.
In those years from 1978 to 2005, we can almost say that there was no government intervention in the economy and that prospered China and the investors in China.
In the later part of 2021, we have seen Xi Jinping’s rapid decisions that were unpredictable and came heavy-handed when delivered them. A typical example for the “common prosperity” campaign against inequality which is not what the West would have taken as the taxation to mitigate inequality, but to crackdown those wealthy business leaders to make them to turnover a large sum of their personal wealth as charitable gifts to please the party.
We can find contradictions in Beijing’s crackdown on real estate which originally is meant to keep housing affordable, but this heavy-handed process destabilized not only the property developers, but also the property market, that threatened not only growth but also created chaos.
Take climate change as another example, after Xi Jinping’s commitment at the COP26, restrictions on burning coal to reduce the carbon dioxide emissions immediately led to the power shortage. Not knowing that the coal-fire generations have long been a business losing money, but the stepped-up mine inspections, ban on coal imports from Australia, ended with the closing down of the power plants, knowing that China is depending on 70% of its power generation from coal. This has shown the lack of long-term plan for curbing carbon emissions ended up with financial losses in other major manufacturing activities not mentioning the cold season has also started.
As the result of all these very shortsighted decision making, it makes China more opaque and less predictable and it is far worse than the 1970s when China wasn’t even part of the world so to speak. And besides its worsening international relation through its diplomacy which is the least to desire.
Rewriting the National Identity
When the Chinese are traveling abroad, people often assume that they are Chinese. In fact, not only the Chinese, but also all the Asians, in one way or another, they will be taken as Chinese. The Chinese they refer to are mostly the Chinese from Mainland China and that is something most of the Chinese would like to clarify and would like to separate from for many obvious reasons that we will come back later.
It is relatively easy for the Asians to proclaim that they are Japanese and Korean as they share the different ancestries. But for Chinese from Singapore, Indonesia, the Philippines, Thailand and other Asian countries, they share the same ancestries as most of their forefathers settled down in those Southeast Asian countries in the last hundred years. Many of them haven’t received any Chinese education although they may speak their dialects as brought down by the families who crossed the water and ended up living there.
Chinese may proclaim that their ancestors were coming from China, but where they were born and live the most part of their lives would be their national identity to many of them. This is especially true for those who take part in following the political parties and know how to embrace the democratic values, like Taiwan for instance, and they want to segregate from China, known as the People Republic of China, where it has only the one-party ruler, the Chinese Communist Party, which is also an authoritarian state.
The situation is more obvious with the island state across the Taiwan Strait with the place known as the Republic of China, or better known as Taiwan. It is well over 90% of its people who can trace their roots from the mainland China and today they are more inclined to embrace an identity that it is different than that of those Communist-ruled China.
Before Xi Jinping came into power about ten years ago, it was made belief that Taiwan would have their autonomy, except they were told to be very low-key in their diplomacy. And since Hong Kong was handed over to China from the British, the one country, two systems was the “make belief” that Taiwan will also follow one day. They made the British signed over Hong Kong based on the promise that the people of Hong Kong would be given the right for the free election for their own leader. This never happened and with the present-day situation, this is forsaking forever from the people of Hong Kong.
In the last two years, we have seen Xi has becoming more vocal and with the claiming of the South China Sea where he reclaimed many coral reefs and turned them into military bases and in many cases they have posted the military threat to Vietnam, the Philippines, and even as far as Malaysia and Indonesia. But more so to Taiwan, which has turned it into the center of dispute. The threat of war has been escalating as we have seen more aircraft carriers from the U.S. being positioned in the South China Sea.
This has made some of the Taiwanese who want to solidify the island’s identity which is making Xi more edgy. He takes the unification of China with Taiwan return to the so-called motherland. He is threatening Taiwan on the regular basis and he proclaimed this as an act to split the country and even went further to curse those for such deed. The continuous dispatch of fighter jets, even bombers, across of the sky of Taiwan was the clear sign of intrusion, but for some reason China is getting away from this aggressive military action and doesn’t receive the condemnation from the United Nations.
Xi’s behavior has turned more than 60% Taiwan’s population of 23 million to identify themselves purely as Taiwanese.
The Chinese people escaped from China after the communist party took over China and drove the General Chiang Kai-shek and the Nationalists out during the China’s Civil War that ended in 1948. One million of them landed in Taiwan although there were Chinese settlers there who arrived thousands of years ago. They were more closely related to the natives of the Southeast Asia and the Pacific and the Chinese continent is only 100 miles away from the coastline of the island. In the 1800s the Europeans had set up trading posts on the island, and it was once ruled by the Japanese for 50 years.
The idea dimmed after 1971 when United Nations severed diplomatic ties with Taipei and formally recognized the communist government in Beijing. The Western countries followed and the identity of Taiwan weakened.
In 1978 Deng Xiaoping opened China for foreigners to invest and it was the businessmen from Hong Kong and Taiwan who took the initiative and helped the communist to build up their economy.
The suppression of the students’ riot in Hong Kong in 2019 set a very bad example and Taiwan came to realize that they can’t trust Beijing’s promise and to preserve Taiwan’s autonomy has been an illusion.
On the diplomatic front, Taiwan has been blocked from the World Health Organization during the pandemic although Taiwan has been proven to have their success in containing the virus. And in the last year’s Tokyo Olympics, Taiwan was not allowed to compete using their own flag and was only recognized as Chinese Taipei.
China under Xi Jinping is becoming more authoritarian, and he expressed his will to hold on to his power after the two terms. He is not hiding his desire to be the lifelong president of PRC. This doesn’t give any chance for Taiwan but to hold on to their own national identity. But their future is still unknown to the many of them living on the island. From not so distant away, the Taiwanese saw the tragic ending of Hong Kong where 7.2 million people lost their freedom almost overnight. For Hong Kong to expect the bailing out from the Western world from the Basic Laws was like the fairytale now. What would happen when the day will come for Taiwan is to the guess of many Chinese. At least I am not too optimistic.
China’s Loan in Africa
From almost nothing, Chinese banks now make up about one-fifth of all lending to Africa between its two banks—China Eximbank and China Development Bank. Its annual lending peaked at $29.5 billion in 2016, and even in 2019, considered as the modest year, it was $7.6 billion.
Xi Jinping appeared on video in the triennial Forum of China-Africa Cooperation held in Senegal in November 2021 stated that over the next three years the amount of money it would supply to Africa would be cut by a third to $40 billion and it would redirect the lending away from large infrastructure but to SMEs, green projects and private investments.
China’s lending has been concentrated to a few strategic or resource-rich countries like Angola, Djibouti, Ethiopia, Kenya and Zambia.
The latest China faced the default of payment is the loan of $200 million to the Entebbe Airport in the capital of Uganda, Kampala. The contract was signed six years ago for its expansion plan with the clause that undermined for China to seize Entebbe airport in case of the debt dispute. This kind of loan agreement which involve the national sovereignty is often referred as “debt trap”. Its lending is essentially predatory. In most cases, the loan contracts are governed by Chinese law, and in the case of disputes, they must be settled by arbitration in Beijing.
For this case with the Entebbe Airport, China can seize the airport if Uganda was to default the loan finally and already in the loan contract Uganda’s Civil Aviation Authority would need to channel all revenues into special escrow accounts and submit budgets to China Eximbank for approval.
When comes to the loans to the third world countries, some draw the similar cases with western financial institutions, including the IMF and World Bank, who lent generously to African governments in the post-independence period to the African states only to impose harsh structural adjustment programs on them from the 1980s after governments struggled to repay. This led to the later period when the African states applied loans to the IMF and World Bank that the conditions became more harsh and also the time it took would become too long. It happened in many cases that the loans were not approved even the regimes were changed.
China in this case is moving very fast and they would disperse loans fairly quickly. But because of the loan details which have been very opaque and concerns over clauses could have been over exaggerated. One thing that we could have to notice that so far China has never exercised their rights as stipulated in the loan agreements at defaults and that could have considered as the merits.
Coming back to the loan contract for the Uganda’s Civil Aviation Authority with the setting up of the escrow accounts is known as the Debt Service Reserve Accounts (DSRAs) are not something unusual.
Western countries have been lending to the African states since 1980s but for China it was only in the recent 20 years. The Chinese lenders have to compete with the advanced economies, and naturally their terms could be more lenient but also more controversial in the eyes of the western world.
Many of these loans on projects that were seen as politically important for Beijing and loans were agreed by the leaders of the two countries focused more on the relationships than on papers. Contracts drafted out in Chinese law to govern cross-border loans could create the problem when dispute arise. It is unlike the English Law, the U.S. Law and even the Hong Kong Law which are more commonly used in cross-border finance.
We have strong belief that the Chinese banks have learnt many lessons over the past two decades for lending in Africa. At the last two years the world has been caught in the pandemic and many defaults which resulted the reschedule of interest payments and loan payments. Everything will need to settle down before the world can take off again. China will be patient as it has already scaled back its loan for the high-profile and high-risk and emphasize on loans that are smaller and more manageable.
New Kind of the Red Army From the Authoritarian States
Lately, I read about a detailed report showing how the Chinese officials. It was reported that the Shanghai Pudong Public Security Bureau approached private businesses for online campaigns to spread propaganda through the online social media. Using these business fronts, they set up fake accounts to promote prefabricated information. They make these accounts on Facebook and Twitter to look real and developed a large number of followers.
This global online campaign is used to polish their international image and to undermine accusations of human rights abuses. These efforts take place behind the guise of bot networks that generate automatic posts and hard-to-trace online personas.
They move like an army and set up a number of fake accounts on a month-to-month basis on hundreds on social media platforms including Facebook, Twitter, Instagram, and the like. Through ad they can boost their postings to more people which is the tool that they will constantly be using. The purpose is to generate an unrealistic numbers of “likes”, “shares” and “retweets” to make their posts more likely to be shown by recommendations using algorithms on many social media sites and search engine optimization (SEO). Like the spread of a virus, in a brief period of time a great part of the world is contaminated.
They create short videos, each video about two to three minutes to promote their propaganda. You can find them through TikTok for instance. They will make the videos look quite innocent, yet they are using them to brainwash our young children and teenagers, which is especially true with TikTok.
Through social media the Chinese can track down an actual person behind a social media account, especially those who live outside China. They can use their internet police to threaten the person who voiced their adverse opinions against them. The police can even go to the extreme and trace the users’ connections in the mainland and can then threaten their family members. The person may be compelled to delete their online posts and even close their account. The person may also face detention when returning to China.
It is not the first time I have heard of this set up in Shanghai Pudong. Actually this is the site that the information technology army has been using to hack the websites in the Western world. You can find the same in Russia, North Korea and Iran. This is the army who doesn’t fire a single shot but can take down any regime in the free world if we are not careful.
All of us have been told in recent years to factcheck every news item as many are fake news. Many news stories are fabricated for unknown purposes. Probably it is part of the process of brainwashing in the hope we can eventually all be converted into believers of an evil doctrine.
Social media was introduced by a bunch of young innovators from the Silicon Valley who perhaps, without knowing, have created such an enormous wealth plus the information technology that has become indispensable even to the adults. We have let the information flow to those in every walk of life and we haven’t looked into the legality to set up checkpoints so that such information may ended up in the wrong hands. If we are now starting to question and to ring-fence what Mark Zuckerberg has been doing with Facebook, it can be out of control any minute now. I have always said that it is like forcing a genie back into the bottle.
It is so ironic to see that all those authoritarian states have not allowed Facebook and the search engine Google into their own countries. They know that these are the information floodgates that can eventually swamp them if they don’t put a cap over it early on. Instead, they are using our social media and turning it around as a weapon to penetrate us.
China’s Inequality with Its Wealth
China is among the most unequal countries in the world. It has more billionaires than the United States, India, and Germany combined. Its top 10% controls 68% of the country’s wealth. A large portion of the 1.4 billion people remain poor. And about 600 million people, or about 40% of its population live on about $150 a month or less.
Beijing doesn’t like the people to talk about the poverty and the drastically disproportional wealth. Any stories or reports appeared in the social media are censored outright. Beijing has built a world-class surveillance system that monitors every move of its people but disregarding the inequality and the dire financial situation of its vast population and extended the necessary financial aid.
Beijing Olympic – The Game that Xi Built for Himself
The International Olympic Committee chose China as the host seven years ago even for a country that has limited snow, also with very limited experience of outdoor winter sports. Xi Jinping met the Olympic delegates in Malaysia’s capital, Kuala Lumpur and promised that he would deliver everything.
It was in 2008, when Beijing hosted the Summer Olympics, it became the showcase for China’s achievements. The world was hoping that the international sports event would help China to moderate the country’s authoritarian policies. But today, it is a very different country, and Xi is using this occasion to make the world to accept China’s terms and proclaim a more prosperous nation under him and put himself after China’s most powerful leader, Mao Zedong.
Xi is always talking about the building of a community with a shared future for the mankind and he is using the opportunity to show this in front of the world.
In the midst of being criticized from the human right activists and world leaders for its political crackdown in Hong Kong, and its oppression in Xinjiang where one million of the Uyghurs are put inside the concentration camps, and not to forget that the country’s “zero Covid” that is not in line with the International Olympic Committee’s protocol, Beijing is still pushing the Winter Olympic through.
Over the years, the International Olympic Committee and the key sponsors, most of them are the international corporations, have become so dependent on China’s vast market and they are not dare to speak against China’s policy.
Take a recent accusation, by the tennis player, Peng Shuai, a three-time Olympian, against a sexual assault by Zhang Gaoli, member of the Central Committee. But the International Olympic Committee remained silent and didn’t ask for the whereabout of Peng Shuai and her safety.
By the way, Zhang Gaoli was overseeing China’s preparation of the 2022 Game for three years until he was retired by 2018.
China has never been known as the country for the winter sports. To host the Winter Olympics, the site has to have ample of snow, We have already seen the unseasonal warm weather during the 2010 Winter Games in Vancouver, British Colombia that many of the competitions were have to cancel. But because of Xi’s promise to the Olympic Committee, the barren slopes were not only planted with tens of thousands of pine trees to create an Alpine landscape, also the complete network of pipelines with reservoirs to feed the snow-making machines to cover in white. And not to forget that Beijing is known for the short of water.
China is not without any ski resort, It has six resorts in the mountain area, Chongli, a small city near Zhangjiakou, located north of Beijing. In 1990s, Lim Chee Wah, a Malaysian developer of casinos and golf courses, struck a deal with the local authorities five hours away from Beijing for a largest ski resort on a site of 24,700 acres in the mountain range near the Great Wall of China.
Early in 2010, Harbin, capital of the northeast province of Heilongjiang, bid for the Winter Olympics but was failed.
It was through Lim Chee Wah’s effort, China pitched the Olympic Committee for hosting the 2022 Winter Olympics and the only competitor for the game was Almaty, the old capital of Kazakhstan, which was once a republic of Soviet Union.
Christophe Dubi, executive director praised Xi Jinping as a partner willing and able, and was capable to overcome challenges. Thomas Bach, the Olympic Committee’s president said that China was the right choice. When challenged by China’s record of human rights and their suppressions of the dissidents, they commented that it was not for the Olympic officials to judge the host country’s political system and their human rights.
It was easy for Beijing to hold the Winter Olympics in Beijing. Many of the sites for the 2008 Summer Olympics can be reused. For instance the iconic Bird’s Nest was used for the opening ceremony. The Water Cube which was used for swimming and diving events and was renamed now as the Ice Cube.
China planned for use $1.5 billion on capital projects and another $1.5 billion in operating expenses. It was a fraction of 2014 Sochi Winter Olympics in Russia who spent $51 billion. The Winter Games in Pyeongchang, South Korea costed $13 billion.
The Olympic Committee just finished with the Tokyo Summer Olympics in July 2021 after the delay of one year. It was also during the coronavirus and they suggested that some of the measures could have been adopted in Beijing. China insisted on its zero-Covid policy and a more invasive daily testing on thousands of athletes made the situation intolerable. But in China, obviously everyone would have to follow their rules or they would be expelled from the games.
Last and not the least, China announced that this Winter Olympics would be “Fully Carbon Neutral” and perhaps we would like to know the measures being taken as the result of this statement.
It is obvious that Xi Jinping staged the Olympics on his terms without any compromise. You can say China won the right for the games seven years ago and it can declare the success now. Already many Chinese cities are eyeing the 2036 Summer Olympics.
The Scoreboard of Beijing with the Winter Olympics
It is applying a “closed-loop system” to prevent the spread of the coronavirus, something that had been used in last summer’s Tokyo Olympics. This ‘Bubble” has confined thousands of athletes, coaches, Olympic staff members and journalists in an enclosed competition sites and hotels for the duration of the games. Everyone must be vaccinated, otherwise would need to go through the three weeks of quarantine before they are allowed to enter into the competition sites, nevertheless they are taking the daily test for any sight of covid.
The Olympic events have taken place in Beijing, the country’s capital, and the cities of Yanqing and Zhangjiakou. You can imagine how stringent is the control being enforced.
Since the outbreak in Wuhan in November 2019, China has operated an extreme “net-zero” policy and close all its borders. From the beginning until now, China has only reported 4,600 deaths and even with the highly contagious Omicron, it has caused small outbreaks in different Chinese cities, and yet the country is paranoid, while the Western countries have taken is as a kind of flu.
China was one of the many contenders to host the 2022 Winter Olympics, but one by one, we are referring to Poland, Ukraine and Sweden, dropped out because of domestic opposition. Norway declined the contending for demands by International Olympic Committee which we will elaborate later. That left China and Kazakhstan as the only two contenders left, and finally Beijing won.
One thing about the International Olympic Committee that I must mention. It demands for luxury treatment wherever it goes. They want the special traffic lanes on all roads for them and only the autocracies are willing to pamper them and build expensive venues where the domestic opposition cannot be heard.
In order to make way for the games, Beijing in its last 2008 Olympic games displaced 1.5 million people. In this Winter Olympics, Beijing forced the longtime residents to move and made the river water for producing artificial snow and caused great inconvenience even to its Beijing residents.
The human right issues—persecution of its Muslim Uighurs and the people of Hong Kong, have been compared with the 1936 Berlin Olympics and 1980 Moscow Olympics, have all caused global controversy and boycotts. Already diplomats from the U.S., U.K., Australia and several other countries have announced their boycotts and have not sent their government officials to attend.
Olympic sponsors have chosen to do low-key ads to avoid to provoke Beijing that can result to the denial to access to this vast market.
Beijing already warned the athletes from expressing their personal views and they would face punishment if they cross the line. In any case, any protests or comments would not be shown in the TV broadcasts and IOC has expressed the support to Beijing for anything that can smear the image of Beijing during the events.
When we looked back to the 2008 Olympic Games, Beijing was very eager to enter into the world scene and the West was using it as a chance to democratize its country and hopefully that China can become a rule-based member of the world. The West could have learned by then, and certainly by now that China will continue with its own doctrine and will come out this time to influence the world with its values.
Xi Jinping entered into power in 2012 and vowed to become the ruler for life. China has emerged as a global economic power and became unapologetic to its authoritarianism, disregard any of its human right abuses, unlawful surveillance of its citizens, dissent of any ideas and make famous of its wolf warrior diplomacy through its Foreign Office officials.