The Second Great Wall of China

Reading Martin Jacques’ “When China Rules the World” during a week when the New York Times’ website was taken offline in China after it published claims about the wealth of Wen Jiabao. News about Mr. Wen’s alleged fortune of £1.7bn was characterized by the Chinese as a “smear” and resulted in news blackout on the subject. The BBC was similarly off air for months after its detailing of the Bo Xilai case.

 

Jacques’ well-documented book shows China as a “civilization state” that the West will not be able to challenge in its essential ideals based on 2,000 years of civilization and then Confucianism. The desire of its people – massed in a vast area with one-third of the world’s population – for solid government and their Confucian appetite for family connections leads many to believe that their form of government and control is the only way for China and that the rest of the world will not be able to change it.

 

The Wall of Legalism

 

Francis Fukuyama in his excellent book “The Origins of Political Order” http://www.amazon.co.uk/The-Origins-Political-Order-Revolution/dp/1846682576/ref=sr_1_1?ie=UTF8&qid=1351345981&sr=8-1on focused how the origins of the rule of law was central to the proper governing of a state. Success, where no government or leader was above the law, is contrasted with such states as China, where, except for brief period, the ruling elite has been above the law.

 

Many believe that a state with Confucianism on the outside and Legalism on the inside is how China is governed today. Legalism, a creed formulated and emerging properly in the Warring States Period up to 221bc, seeks to ensure that strict laws keep dissent down and people equal. The Emperor was in place because of the law and was above it – but had to be flexible in intent to ensure that the leading cliques were satisfied.

 

Coming forward 200 years and the so-called Communist Party has assumed the role of Emperor. A Communist Party that that no longer believes in Communism but in power from the centre; that not just tolerates corruption but uses it throughout China to keep its leading cliques in check; that exports corruption to its supply-chain (its raw materials suppliers) throughout the word in order to keep them sweet; that deals harshly with any dissent and criticism; that only reacts to the worst crimes and then only when it has to (such as with Bo Xilai – who became too much of a burden).

 

Legalism as a creed best describes the current Chinese government style – no longer driven by the equality of Communism – where a ruling elite has taken over the State and drives it according to their own requirements.

 

The post-World War II political and economic direction of the West has been democracy and capitalism. Human rights enshrined in the Universal Declaration of Human Rights http://www.un.org/en/documents/udhr/index.shtml has been a solid framework on which political thought has been based. The development of the European Union (notwithstanding economic upsets through the Euro) was based on this political fulcrum and a liberal economic system.

 

This post-war consensus in the West has also been the basis on which we have tried to hold the rest of the world to account – to develop democracy and capitalism on a worldwide basis.

 

No use for Wallpaper

 

Now, the western consensus is threatened by China. Having taken the economic principle of capitalism and thrown the centralized system of communism into the gutter, the Chinese are rapidly gaining economic muscle. This was not surprising once the shackles of the communist economic model was broken and Deng XiaoPing was able to redirect the Chinese to a better economic future.

 

This had already had enormous impact in China as wealth has increased and will continue to do so. But, a country with huge numbers of people but limited natural resources (apart from their own intelligence and rare earth minerals) has to then engage with the rest of the world in order to maintain that direction of travel.

 

This is now breaking down the political and governance consensus that the West has tried for the last sixty-seven years to impose. What does this mean? It means that the Chinese are overturning the route to democracy and democratic institutions. It means that elites in developing countries now have huge financial backing from the Chinese – through sales of raw materials to China and through the fact that they are witnessing another political model.

 

The West cannot wallpaper over the political cracks in the political wall. While capitalism is clearly now shown to be the best worst system of improving our material wealth, democracy is no longer the only political product on sale. After the bloody years of fighting against communism and fascism, which World War II was supposed to have won, the challenge is not so much religious fundamentalism (which we have been understandably so fearful of) but the enormous influence that China will have on a world where the most serious challenge to democracy is arising.

 

Taking a brick from the Wall

 

The battle for ideas is just starting. China needs a healthy west and a healthy India and Brazil and rest of Asia and it needs the raw materials from across the planet. Apart from the environmental catastrophes that are likely to be exacerbated by the drive for material growth (upon which the Chinese legalist approach relies in order to keep its people happy), the influence of Chinese political thought is likely to grow exponentially.

 

Recent riots in Ningbo –   http://www.bbc.co.uk/news/world-asia-china-20109743 – against a chemical plant expansion and the Chinese authorities’ methods of dealing with it (which includes the hiding of road signs so that journalists won’t find their way to the riots!) are a simple sign that Tiananmen Square was by no means a low point.

 

As the world waits for the US Presidential election, a change of at least equal importance will be taking place in Beijing and no-one will know who has come out on top until the new politburo of the Chinese Communist Party is unveiled around 15 November.

 

Not that this will change anything. In the US, the economics will be substantially changed by the possible election of Romney and (Ayn Rand influenced) Paul Ryan. The political system will not change.

 

In China, nothing will change and the political, legalist system will continue internally and externally. This is a continuing challenge that is currently seen as economic but will eventually be seen as dramatically political and on a world scale. For Chinese economic growth will challenge the democratic ideals built up by the West and hard fought for by millions. It is now ranged against 2,000 years of Chinese centralism legalism.

 

How (or if) the West reacts to this will be a far bigger story than the economics – and arguments over tariffs and who owns Treasury bonds. We need to start taking the brick from the Wall before it is built around us.

Strangling Inherent Dignity – How we retain (regain) Self-Respect

Orhan Pamuk, today on the BBC, talked about how the military in Turkey have been moved away from the centre of political decision-making. Their threat has been diminished, resulting in a feeling of relief or release. He also remarked on the Arab Spring and how in Tunisia and elsewhere people had regained some dignity – maybe threatened by Islamic re-awakening (but “that would be the people’s decision”).

In China, the escape of Chen Guangcheng from house arrest and his televised pleas to Wen Jiabao to halt the rampant corruption in China points to a state that is gnawing away at its soul.

In the USA, the economy is dangerously tilted towards the highest 1% who now own around 50% of its assets.

In Spain, 24.4% of people who are seeking work are without a job.

Charles Taylor is found guilty of by the International Criminal Court of aiding war crimes – yet, he remains popular in much of Liberia for his ability to dole out cheap bread at the right times to local populations.

Organisations and People – The fight for Dignity

 

Whether as individuals or members of an organization or a region or a nation, the human instinct is to reach for a minimum level of dignity. The need to attain a degree of self-respect is fundamental to the human condition. Whatever our economic attainment (whether we are wealthy or poor) each of us retains the need for self-dignity and the self-respect of those closest to us.

Attainment of dignity is a basic need and we continuously fight for it.

The Universal Declaration of Human Rights starts its preamble with the following:

“Whereas recognition of the inherent dignity and of the equal and inalienable rights of all members of the human family is the foundation of freedom, justice and peace in the world”

Yet, across the world, as we grow economically across a wider population, there is little evidence that we understand much more about a central issue that continuously confronts us – the attainment of “inherent dignity”.

If dignity means the attainment of freedom, justice and peace as the most important elements of our civilization (and we should be careful to ensure that our freedom does not blind us to the needs of a wider responsibility – to the planet as a whole), then what do we do daily that reminds us of our need to provide dignity and who is it who has this responsibility?

Responsibility

Leaders – whether of nations, businesses, local authorities , families or whatever – have a responsibility to those that they lead. This responsibility includes the establishment or reinforcement of cultural norms that strengthen the central idea of dignity to all its members.

This central tenet has been forgotten – we hear it infrequently amongst the babble of noise that comes from politicians and economists, business leaders and social leaders.

There is no question that where poverty is extensive, a crucial role for leaders is to ensure that economic growth is secured and poverty is minimized.

There is no question that where health and safety is jeopardized that better ways have to be found to minimize danger and secure life.

There is no question that where housing is poor that people must be housed and clothed.

But, the basic needs of food, shelter, clothing and safety are at one with the need for self-respect or dignity. The drive for better gross domestic product (GDP) has, in our enthusiasm to generate more wealth, left behind the basic understanding of what it is that propels the human spirit.

Setting dignity at the centre

While this is not a simple issue (dignity may be seen have different connotations to different people) the need for self-respect is the driver that propels individuals to fight back in so many cases.

The lack of dignity of those who are deprived of respect range widely. We see it constantly as we mentally note how individuals compare to certain societal norms – those who are poor are given less respect than those who are wealthy; those who have special needs are likely to be given less respect than those who are “OK”; those who are amongst the led are given less respect than those in power; those without the vote are seen as demanding less respect than those commanding political heights; the unwell lose dignity when maltreated; the unemployed lose dignity by the nature of unemployment and an assumption of laziness – the list goes on.

The problem is that self-respect is not normally a subject that is discussed or considered when key decisions are made. We are trampled by the rush to mend economic fences so easily that we ignore the affects. An example is Iraq. Here, not only was the rationale for entering Iraq wrong – there were no weapons of mass destruction – but the dignity of the Iraqis as a nation (or several nations within borders created by Europeans who cared nothing for the self-respect of those within them) was not an issue despite what should have been the lessons of history. Economics (through oil) and maybe the stated threat of terrorism (maybe) dampened the pressure to think through the impact of a complete eradication of self-respect amongst the Iraqi people – a self-respect oddly (to us in the west) retained with a strong man at the helm (Saddam Hussein) and then not replaced. In Afghanistan, self-respect has, through the ages, turned out many who would think to rule the country. It is the demand to self-rule that has been constant.

Corruption tears away at dignity

The danger in China is that corruption (an economic and power game) is tearing away at the nation’s credibility and self-respect. Recently, university students in Beijing were asked by the BBC what careers they wanted and one answered they wanted to be a senior local politician because that is where the money (through corruption) goes. The lack of self-respect that enables this response is intense and is leading to a potential fracture of the system in China as recent events in Chongqing highlight.

In India, one of its best-known websites is www.Ipaidabribe.com . This is a self-understanding of the rampant corruption in the country and mirrors a loss of dignity that brutalizes that society.

As a result of its alleged dealings in Mexico, Wal-Mart is under investigation by the US authorities through the Foreign corrupt practices act (FCPA) over millions of $’s of facilitation payments (not in themselves individually illegal under the FCPA but maybe through the gross flouting of corporate norms will be found to be). Mexico, riven by many drug cartels and corruption, lacks a dignity and self-respect because money is at the centre and seen as the only response. Wal-Mart helps to encourage that loss of self-respect.

National dignity or the dignity and self-respect of any business or individual is destroyed by corruption. When dignity is destroyed, then the basic ability to enjoy a life of “freedom, justice and peace” is also destroyed.

Economics cannot be isolated from self-respect

A cornerstone of self-respect is the ability of individuals to reach a level of basic self-attainment – the ability to feed oneself and one’s family; to house and clothe at least. In the rush towards austerity the macro-economic arguments are destroying the micro-economic disasters that are being generated. Poverty in wealthy nations is on the increase and the unevenness of wealth is growing. This is leading to a loss of self-respect amongst large sections of society. The impact of this change is uncertain – but, we can judge that the effects will not be positive.

John Rawls, one of the best-known and best-respected philosophers of the 20th Century considered self-respect as “perhaps the most important primary good” and how lack of self-respect leads to a growing disenchantment with the society and an estrangement with its ideals.

In the UK, maybe more prosaically, Ian Duncan Smith has highlighted the need for self-esteem amongst those on welfare and why jobs are the answer to bringing them out of the cycle of poverty.  This cycle of poverty is being exacerbated by the sovereign debt crisis which has transferred bank debt to national debt and enabled bankers to reap the rewards.

This crisis is now endemic in Europe and threatens stability and progress. The lack of dignity of nations (Greece, Spain, Portugal) as the Eurozone centre demands they commit to more austerity is misunderstood or ignored at the Eurozone’s peril. It is a fall-off in self-respect that eventually reaches a tipping point. It was a fall-off in national self-respect that catalyzed the German nation towards fascism in the 1930’s – a lack of national dignity that was caused by the war reparations following the 1st World War and heightened by the torments of the depression of the 1930’s. At some point, shattered self-respect will require repair – sometimes in brutal ways.

Democracy, Corruption, transparency and Economics

There are many ways in which dignity is destroyed – through lack of involvement in decisions, through corruption and lack of a chance for basic economic fairness.

There is no single answer but the key problems facing us today should all consider the issue of dignity before the answer comes rattling out. Clearly, real democracy, eradication of corruption, better knowledge of and openness about what is being done (transparency) and a new economics based on an understanding of the economics of self-respect are overall responses to ensure that we enjoy the basic dignities enshrined in the Universal Declaration of Human Rights.

“Whereas recognition of the inherent dignity and of the equal and inalienable rights of all members of the human family is the foundation of freedom, justice and peace in the world”

Sudan – China’s Supply Chain Gang

George Clooney got arrested yesterday – outside the Sudanese Embassy in Washington, DC. He was freed with a $100 fine – but he (and his journalist father) have brought some attention to the awful situation in Sudan / Nuba / South Sudan.

I was in Khartoum in 2010 on behalf of Global Witness, an NGO that campaigns against natural resource funded corruption and conflict. The Sudanese had reacted badly to a report we had written on how oil resources were being corruptly handled against the interests of the South Sudanese – who have since gained independence. Around 98% of the income is from oil.

At the conference organized in Khartoum by the Sudanese Government – and aimed at rubbishing the Global Witness report – the oil companies were represented (Chinese at the forefront) along with the Government and oil ministries. The conference was aimed at whitewashing the Sudanese of corruptly taking more than their fair share of the oil under the oil sharing agreement.

Since then, Bashir’s Government has been syphoning off South Sudanese oil (which has to run through Sudanese pipelines).  Because Sudan is made up of various tribes, fighting over territory and natural resources remains continuous and high-risk. As in many countries, economic well-being is a necessity to ensure that such conflict is minimized. In a country riven by wars and dependent on one natural resource, oil, oil management and an ending of the rampant corruption in Sudan and South Sudan are critical.

19th Century Boundaries

Sudan is a nation with boundaries set up in the 19th Century by Empires that adored straight lines and cared little and understood less about the tribal affiliations or histories of those lands. Kept together by undemocratic and repressive regimes, corruption and conflict were devices developed to hold strong elites in power. Corruption is now rampant throughout the region and conflict is often seen not just as a means to take over territory but to keep populations focused on the enemy so as to distract them from internal strife and to motivate all against a common foe.

Decisions taken many years ago by foreigners have destabilized the region and insinuated a corrupt regime and continuous conflict into it. The new colonizers, though, are the Chinese. As George Clooney states, the Chinese oil companies (really the Chinese Government) have invested over $20bn in Sudan / South Sudan so that 6% of their oil needs back home can be fed. They have styled their colonialism on the back of “no involvement” in politics or in the affairs of the Sudanese. Confucian disinterest in the affairs of a nation so far away means that the west’s plans (certainly since the end of WWII) to link economic prosperity (mainly through aid) with improved governance are now foundering as the new colonialists (extracting vast quantities of natural resources) care nothing about governance.

21st Century Payback – China at the centre

Following the demise of the League of Nations after WWI (a bastion of 19th Century borders), the United Nations was created to establish peace worldwide. How will the 21st Century be reshaped to deal with the enormous economic changes taking place whereby dominant nations from the 20th Century are being progressively sidelined in those areas of greatest economic need and highest risk of conflict?

China despite its size and annual economic growth remains a poor country where 70% of its people are poor by international standards. It is determined to grow itself to a level where its people are comfortable and where the political system is salvaged. This means that its supply chain (especially its natural resource supply chain) is seen as merely that – it doesn’t matter that nations who have the natural resources so badly needed for economic growth in China are corrupt and riven by war as long as the Chinese can minimize supply disruptions. This may have been OK in the 19th Century but is not sufficient now where elites are enriched in the supplier nations on the back of corruption and conflict.

The key to the crisis in Sudan and the key to making a real change to 21st Century struggles against corruption (and its impact on poverty, hunger and disease), against conflict and against world-changing disasters like climate change is ………China.

Whether or not China is dominant in terms of its economy – and it is still much smaller than the USA – it has the power of veto and, more positively in terms of persuasion.

China can free the Supply Chain Gang

Whilst economic strength moves to China at great speed, the Chinese government has to take account of the fact that its customers and suppliers and itself are completely interdependent. China will probably over time become the most interdependent nation on this planet. Its huge population and increased momentum for economic growth will encounter limits that the current Premier, Wen Jiabao recently acknowledged. Increasing “reform and openness” are critical to further economic progress, he said recently in Beijing.

As out-going Premier he will not in the future have the power he currently possesses and Chinese power is entangled in many ways so that his words may not bear fruit. Nevertheless, there is some reason to believe that the government in China may seek to adapt as time goes on – because economic progress is vital to secure the political power base. At the same time, it is possible to see that (with the right pressure) Chinese attitudes to its customers and suppliers may be reformed to more than purely customer / supplier status. China is not a corporation and the competition for natural resources is not merely a supply chain activity – there are lives at stake within the supplier communities, not just shareholders and shareholdings.

Sudan and South Sudan are examples of so many things – countries dependent on a natural resource which is dissipating that basic wealth to a foreign country so that a core of wealthy and powerful government cadres get wealthier while thousands live in poverty, disease and in war zones. While China treats Sudan and South Sudan on a supply chain basis, no change can exist – and this same treatment is expanded wherever China works to secure supplies.

The Clooneys and Amnesty International and Enough (as well as organisations such as Global Witness) are working hard to free the Sudanese and South Sudanese from the terror of war. It is also a crucial case for expansion of China’s role in natural resource extraction and dependency. China can change the way the world works by relaxing is grip on pure supply economics and allowing its huge economic strength to persuade its suppliers that good governance is a worthwhile benefit along with the extraction of its natural resource wealth.

Holes in the ground – whether the result of mining, oil extraction or graves dug to bury the dead from conflicts – are no use, merely the result of the supply chain gang effect. It is a good time for China to take its global responsibilities more seriously. It will be around for a long time – it should be seriously acting on how it lives within the global neighbourhood. The traditional Chinese view that you should follow the local custom when you go to a new place is outmoded – especially when local customs are keeping elites in power, corrupted and financing conflicts.