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Saturday 21st
posted by Morning Star in Features

In the second of his reports from the congress of the Communist Party of China, KENNY COYLE fleshes out the domestic and foreign policies agreed by the delegates

CHINESE leader Xi Jinping confidently told delegates to the 19th congress of the Communist Party of China (CPC) on Wednesday that the country was well on the road to becoming “a global leader in terms of composite national strength and international influence.”

With Donald Trump sowing mayhem in the White House, Theresa May clinging on to No 10 by her fingernails and the EU facing unprecedented stresses from Brexit to Catalan separatism, Xi’s measured assurance in looking decades into the future is quite a contrast.

Following the collapse of the Soviet Union and its European allies in the early 1990s, many assumed that a new unipolar world, centred on Washington, had emerged. Instead of allowing itself to retreat into isolation, China set about creating multiple international networks to counteract Western pressure.

In 1996, a high-level meeting in Shanghai brought together China, Russia and three central Asian republics — Kazakhstan, Kyrgyzstan and Tajikistan. With the later addition of Uzbekistan this became the Shanghai Co-operation Organisation (SCO) in 2002.

This year both India and Pakistan became full members. The SCO is not solely a diplomatic grouping but also has a military element, with China and Russia organising several joint exercises under the SCO banner.

A second, better known, network is Brics, comprising Brazil, Russia, India, China and South Africa. While these economies are at varying levels of development and some are experiencing sharp changes in political fortunes, these emerging economies have considerable scope for refashioning the global economy.

Socialist economist John Ross has noted that the “IMF calculates that Brics economies will account for 38 per cent of world growth during the five-year period 2016-2021, compared to 30 per cent for the G7,” the latter comprising Canada, France, Germany, Italy, Japan, Britain and the US.

In no sense can the SCO or Brics be thought of as Chinese-dominated. The political and ideological differences of the participants are too wide for this and the arrangements are much looser than trade blocs such as Nafta or the EU. But they do allow China to extend its “soft power” and create a series of multilayered, multilateral partnerships without US interference.

A US application for observer status of the SCO in 2005 was flatly declined.

Chinese strategy has generally been to avoid head-on collisions with the US and the West wherever possible. Whereas the Soviet Union became embroiled in a resource-sapping attempt to keep pace with Nato, the Chinese are following an ancient maxim of Sun Tzu: “The supreme aim of war is to win without fighting.”

Only in the sensitive areas of Chinese sovereignty such as Taiwan and disputes in the South China Sea do firm military threats come into play.

Meanwhile, gradually the Chinese military is being modernised and streamlined.

As mentioned before, China is now the single most important driver of global economic growth, but where Trump pushes “America first,” Xi talks instead of “win-win co-operation” between China and its trading partners.


Xi was careful not to directly criticise the prickly president but his congress remark that “no country alone can address the many challenges facing mankind. No country can afford to retreat into self-isolation,” was clearly directed at Trump’s blowhard rhetoric.

Given the heavy Western bias of the existing global financial agencies such as the IMF and World Bank, China has started to work on alternatives that do not as much confront them directly as provide detours around them.

A case in point is the Asian Infrastructure Investment Bank (AIIB), a multilateral development bank in which around 60 countries have expressed their willingness to participate. The AIIB will target the development of infrastructure and other productive sectors in Asia, to address the continent’s many infrastructure needs.

However, the Obama administration attempted to derail the project by unsuccessfully lobbying US allies to snub the open invitation to join. It turned into one of the great humiliations of his presidency. Even Britain was eager to sign up.

But by far the most ambitious of Xi’s plans is the project known as One Belt, One Road (OBOR), which is not simply a means of promoting trade but will also create a new channel of diplomacy.

If successful, OBOR will entirely reorient the world economy, bringing to an end three centuries of hegemony by the transatlantic twins of the British empire and latterly the US.

OBOR will create a physical corridor of infrastructure that will run from the Pacific Ocean to the Atlantic.

It will unite the Eurasian landmass in an unprecedented way, offering new possibilities of development in particular for the Central Asian states and the former socialist countries of Eastern Europe.

That at least is the plan. But the problem is not simply the scale of the ambition and the intricacies of negotiating agreements with dozens of individual states but the fact that this would undermine the dominance of the north Atlantic capitalist states, the US and the current European Union bloc.

Xi outlined his plan for a “New Silk Road economic belt” on a visit to Kazakhstan in 2013.

The Silk Road was the ancient trade route that criss-crossed Eurasia, connecting China with Europe, the Middle East, Central and South Asia.

The modern plan covers almost 90 projects in over 60 partner countries and is centred on large-scale investment in new infrastructure — including motorways, energy pipelines and power grids, railways, along with port and logistical investment in partner countries outside the belt but linked by maritime trade routes, dubbed the Maritime Silk Road.


Estimates of the overall investment needed to realise the OBOR programme sit between £650-850 billion.

The benefits would spill over into the African continent where Chinese investment in infrastructure is in turn creating new opportunities for countries that had until now been locked into a vicious cycle of poverty and debt repayments.

One example is the £2.43bn Madaraka Express rail line, the first leg of which connects Kenya’s capital, Nairobi, and the port city of Mombasa. This is the country’s largest infrastructure project since independence and the first extension of Kenya’s railways since 1916 during British colonial rule.

Eventually the line will extend to Uganda, Rwanda, South Sudan and Ethiopia, placing Kenya at the centre of an East African rail network that will transform the region.

The results of these infrastructure improvements are already obvious, Africa’s exports to China more than doubled to £88bn in 2014 from £42bn in 2008.

This is the kind of “win-win” partnership that Xi believes represents “building a community of a shared future,” one of many maxims that mark the Xi era.

While these clunky slogans of Xi’s are unquestionably banal, behind them is a new strategy of development that offers exciting potential for the future, particularly for developing countries.

However, it also represents a challenge to existing Western-dominated international economic structures that have marginalised billions of people worldwide; they are unlikely to allow China a clear path ahead.