Is the kidnapping of Meng Wanzhou (from Huawei) a turning point?

Is the kidnapping of Meng Wanzhou, a senior executive of Huawei, a turning point?

Let us leave aside the cowardly Canadians bending to the capricious will of a declining United States, or the increasingly ineffective sanctions that the USA slaps on all and sundry, and consider what I have elsewhere called China’s dialectical leap into the future.

Huawei’s technological breakthroughs are only one – albeit important – aspect of a much larger process. Having been the first to test successfully a 5G communication, Huawei has developed a whole process that enables it to roll out a complete network in countries keen to get hold of it. 5G will make wifi and national broadband networks obsolete. How has it been able to achieve this, along with superior technology all the way from smart phones to undersea cables? Of its 180,000 employees, more than half are involved in research and development. Has it done so through ‘intellectual property theft‘? Not at all, but through the active incentives of a communist party in China that knows such developments take place only with significant government support.

Yet, Huwaei is only one example of a whole range of technological breakthroughs that have been happening in China over the last few years. I will not go into the full range of these here, but will focus on wider social and political questions. This is because the dialectical leap is taking place not merely on a technological level.

Socially, the symbiosis – as many are now recognising – between traditional China culture and Marxism means that Chinese culture today means Marxist Chinese culture. The old Confucian four-character saying, ‘all under heaven is as common [tianxia wei gong]’ has been appropriated and reinterpreted in light of communism’s focus on the ‘common’. This has massive implications at all levels, from the share economy through a Chinese Marxist approach to human rights (in which economic wellbeing is the basic right) to core socialist values.

Politically, all of this is taking place precisely under the strong leadership of Xi Jinping. Call it what you will, but the reality is that a good dose of communist authoritarianism is precisely what China has needed in the last six years. The result: on average, 90 percent of people in China are confident of the direction in which the country is headed, and 84 percent of people at all levels have trust in the government and public institutions (as the Ipsos and Edelman poll agregates indicate). This entails confidence to innovate and take risks, with quite stunning results.

Back to the kidnapping of Meng Wanzhou: this is an extraordinarily clumsy move that will backfire in so many ways. Only time will tell, but this may well be the moment when countries like the United States, the UK, Canada, Australia and New Zealand (a small gaggle that once upon a time called the shots) really do begin to fall behind in a very noticeable way. By contrast, those keen to engage with and make use of Chinese breakthroughs may well begin to leap ahead as well. The candidates are many indeed, from Russia through Africa and Central Asia to Latin America. Now that would be a different world.

 

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Two (of three) articles on Chinese Marxist approaches to human rights

In the process of writing a series of three articles on Chinese Marxist human rights, two pre-publication versions have been posted on – of all things – the website of the Australian Academy of Humanities. I do not quite understand why they asked for them, given the other items, but there you go:

1. The State and Minority Nationalities in China

2. ‘We Have Freedom of Religion’: Understanding Chinese Marxist Approaches to Human Rights

3. Sovereignty and Human Rights: A Chinese Perspective (this one will be complete by January)

An effort to understand Australian Sinophobia

Since I spend my holidays in Australia, I find a need to understand the extraordinarily vicious Sinophobia thereabouts. In our time, perhaps New Zealand is the only country where it is worse, but that is not by much. Russophobia is part of the picture as well, but not as bad as in that very weird country, the United States.

So let me suggest the following:

1. The weakness of Australian governance, especially at a national level. No matter what party has been in power over the last decade or more, it has characteristically been weak and torn by inner strife. They spend most of their time turfing out one leader and finding another, so much that elections are a waste of time and money. When a government is weak, it likes to find an external threat.

2. There are two caveats here. To begin with, the general populace is largely positive with regard to China. Survey after survey indicates around 65 percent are positively disposed. Further, the political subclass is split, with significant portions across the limited political spectrum engaging with China. For now, the Sinophobic element is able to set the agenda, making use of a gaggle of rabid ‘commentators’ and ‘advisors’ who do not realise they are being used. Australia also has a compliant corporate and state-owned media (ABC and SBS) playing the same tune.

3. At a deeper level, the Sinophobic narrative – with its distortions and deliberate misinformation – taps into a vast storehouse of Australian racism from the past. This comes form a time when the population was less than 10 million and was largely descended from British immigrants. In this context, the ‘yellow peril’ was invoked, an obviously racist trope and part of the white Australia policy. This is really nasty material, which many of us thought had been left behind.

4. The Sinophobic propaganda is a signal of an ongoing identity crisis. Since 1972 and the end of the white Australia policy, Australia has seen British descendants become a minority. Western European descendants (like myself) will also soon be a minority. Most immigrants come from East Asia, the Subcontinent and Africa. For example, Chinese is the second most spoken language in Australia now. As this shift happens, with about 200,000 immigrants per year, the demographics and culture have been changing. In this context, the racist invocation has become more shrill as Australia makes the transition to a Eurasian nation. That it alienates a significant portion of the population should be obvious.

5. The rampant Sinophobia may also be seen as a symptom of the difficulty of figuring how to deal with a declining United States. That the USA is in decline is obvious to everyone. Asian countries have by and large figured this out and have been working to solve their own problems. But Australia is trapped. It gambled on alliance with the United States after the Second World War, but the governing bodies know full well that the USA today would neither want nor be able to lift a finger to help Australia. Further, for some time now, Australia’s number one economic partner has been China, which has enabled Australia to avoid a recession for 27 years. Australian policy setters, along with the woeful media, are unable to manage this situation. Either break with the United States or break with China. The latter option would have severe economic and social consequences, while the former would simply challenge the whole political culture of the last 70 or more years.

6. At the deepest level, this Sinophobia is part of the long-standing colonial and anti-colonial struggle. The anti-colonial project I have in mind is the one that came to the fore in the twentieth century. As the Soviet Union realised (in the 1930s) that the Russian Revolution was in part an anti-colonial revolution, and as it began to support at many levels the global anti-colonial struggle in the name of opposing capitalist imperialism, the century was determined at many levels by this struggle.

With its immense economic power and socialist political structures, China has now taken the lead in the anti-colonial project. We see this with the world-changing Belt and Road Initiative, Africa-China Cooperation, the Asia Infrastructure Bank and the Shanghai Cooperation Organisation. The latest element of this is the shift away from the US dollar in international transactions and reserves (for example, China plans in March to trade oil in Renminbi, the most significant shift from the last item that is still almost exclusively done in US dollars).

In response, a small number of countries – 15 at most – have made an effort to counter this anti-colonial project. Of course, they are former colonial powers, pushing a tired agenda that is too little, too late. The catch is that some of the former colonies have joined this new colonial bandwagon. These are not the countries that achieved independence in the twentieth century, but earlier. The United States, Canada, New Zealand and Australia are the culprits. While we may think this is perverse, it is useful to recall that each of them has been a colonial power on their own. Australia, for example, was for long a colonial master of Papua New Guinea and still sees itself as a master. That China has now engaged with Papua New Guinea and is doing what Australia never did – improve the basic infrastructure in Papua New Guinea so that it may actually develop economically – is seen as an affront to Australia’s continuing colonial arrogance.

 

Political weakness, a storehouse of racism, an identity crisis, a declining and angry United States, and the anti-colonial project – these are the factors that seem to be important. There may be more, but none are particularly pleasant. No wonder, then, that in 2017 and 2018, Australia was voted the least friendly country by Chinese surveys.

Deng Xiaoping: Basic principles of international engagement

In the context of the 1978 launch the ‘four modernisations’ (agriculture, industry, science and technology, and national defence), Deng Xiaoping made the following remarks relating to China’s international engagement:

At present, we are still a relatively poor nation. It is impossible for us to undertake many international proletarian obligations, so our contributions remain small. However, once we have accomplished the four modernizations and the national economy has expanded, our contributions to mankind, and especially to the Third World, will be greater. As a socialist country, China shall always belong to the Third World and shall never seek hegemony. This idea is understandable because China is still quite poor, and is therefore a Third World country in the real sense of the term. The question is whether or not China will practise hegemony when it becomes more developed in the future. My friends, you are younger than I, so you will be able to see for yourselves what happens at that time. If it remains a socialist country, China will not practise hegemony and it will still belong to the Third World. Should China become arrogant, however, act like an overlord and give orders to the world, it would no longer be considered a Third World country. Indeed, it would cease to be a socialist country. I first addressed these points in a speech delivered at the Special Session of the United Nations General Assembly in 1974. The current foreign policy, which was formulated by Chairman Mao Zedong and Premier Zhou Enlai, will be passed on to our descendants (Selected Works, vol. 2, p. 123).

Fast forward to 2017 and the official launch of the Belt and Road Initiative, where Xi Jinping reiterated the five core principles of peaceful coexistence, which date back to 1954:

China will enhance friendship and cooperation with all countries involved in the Belt and Road Initiative on the basis of the Five Principles of Peaceful Co-existence. We are ready to share practices of development with other countries, but we have no intention to interfere in other countries’ internal affairs, export our own social system and model of development, or impose our own will on others. In pursuing the Belt and Road Initiative, we will not resort to outdated geopolitical maneuvering. What we hope to achieve is a new model of win-win cooperation.

In light of Deng Xiaoping’s comments, China is obviously still a socialist country, if not even more so today.

2018: The Year Apple Products Became Obsolete

Is 2018 the year that the global symbol of U.S. technological innovation became obsolete? Or is it the year when we began to realise a reality that has actually been the case for a while?

Not so long ago, it was a given that Apple products would be manufactured in China, but that the crucial value-adding would take place in the United States’ infamous Silicon Valley. In this way, companies like Apple could maintain a stranglehold on the global supply chain. No matter that it was often Chinese whizz-kids who were actually in Silicon Valley, finding new ways to keep Apple in front and ensuring the final value-adding.

In 2018 a few small but significant shifts took place. Let put this in terms of personal experience. A couple of years ago and against my better instincts, I had accepted a Macbook Air from an employer. I eventually became used to the machine, even with its counter-intuitive and closed structures. It had a good battery and good modem inside and it seemed to work passably well for the first year or so. But it was always a frustrating piece of equipment. After a year or so, its basic clunkiness became more apparent. Despite all the vaunted hype by Apple enthusiasts, I found it no better than other machines I had used earlier.

In late 2017 I was fed up. In Beijing I bought a new Xiami laptop, which had recently been launched. At all levels, it is simple a superior piece of equipment. Xiaomi’s aim is to produce the best possible product at a reasonable price. This one was about half the cost of a Macbook Air. What had happened? I thought. Is this an anomaly? No, the value-adding had all taken place in China.

I could repeat these observations concerning the Xiaomi phones, but perhaps Huawei is a better example. In 2018 Huawei produced the world’s best smart phone, with integrated AI (artificial intelligence) and a ‘killer’ camera developed by Leica. Its global market share surged past Apple, and is now just behind Samsung. In a couple of years, it will become the world’s top-selling smartphone.

Is this a sudden development? Not at all, for the enmeshed socialist market economy of China has been in this path for a number of years. Technological breakthroughs – from high-speed trains, through bridge construction to smart phones and quantum communication – have been actively fostered. For example, for some years now more new patents are registered from Zhongguancun (near where I live in Beijing) than from Silicon Valley. While the former has been attracting more and more global talent, the latter has seen a brain drain.

In this light, the crude efforts – by one or two countries such as the United States and Australia – to suggest that Huawei, for example, is a ‘security risk’ should be seen for what they are: desperate rear-guard actions to try and restore the fortunes of companies like Apple.

The catch is that people know the technology is now increasingly obsolete and yet one is supposed to pay a premium price for such technology.

As someone from India – where Chinese high-tech products are in very high demand – put it: I am sick of the United Stated forcing obsolete technology on the rest of the world at gunpoint.

An insight into the socialist market economy

This year marks the 40th anniversary celebrations of the reform and opening up and the development of the socialist market economy (which is different from a capitalist market economy). As part of the celebrations, 100 people who have contributed significantly to the reform and opening up were nominated for awards. As the People’s Daily reports:

The award candidates come from a wide range of professions, including scientists, economists, grass-roots Party cadres, model workers, state firm managers, and private entrepreneurs.

Feedback is being sought until 30 November, after which the final list will be announced. Nothing remarkable in such an exercise, although some attention has been directed to the nomination of the drivers of China’s world-leading e-commmerce, such as Ma Yun (also known as Jack Ma) of Alibaba. Everyone in China knows that he is a long-standing member of the communist party, so nothing new there.

More significantly, the award exercise opens a window into the functioning of China’s socialist market economy. Although proper research goes much deeper, engaging with Marxist economists in China, the following, from the People’s Daily, is a helpful start. It concerns what may be called an enmeshed economy, where state, society and economy are so intertwined that it is almost impossible to speak of separate entities.

Party not meddling in running of firms: experts

The Communist Party of China (CPC) branches inside private companies help enhance corporate management and improve teamwork without meddling in decision-making processes, and concerns over any executive affiliated to the Party reflect a lack of knowledge about how the Party functions at the grass-roots level, experts said on Tuesday.

Jack Ma Yun, founder of Chinese e-commerce giant Alibaba Group, was identified as a Party member on Monday, which sparked heated discussions online. Some media reports said it was an example of how the Party penetrates into every aspect of Chinese business.

This is actually not the first time it has been revealed that Ma is a Party member, media reports said. When the Zhejiang Merchants Association was first established in October 2015, Ma was appointed as the first head of the organization and introduced as a Party member.

Those who are worried that growing Party branches and committees inside private companies might jeopardize the interests of shareholders or affect decision-making have no basic knowledge about how grass-roots Party cells operate and what their roles really are, Su Wei, a professor at the Party School of the CPC Chongqing Municipal Committee, told the Global Times on Tuesday.

“Before the CPC implemented the ‘Three Represents’ and allowed private entrepreneurs who had met the requirements to join the Party back in 2001, the number of private businessmen who were Party members accounted for a large proportion of the total number of private entrepreneurs. And many had already become Party members even before they started their own business,” Su said.

It is unknown whether Ma joined the Party before he started Alibaba. The e-commerce firm was contacted by the Global Times but did not comment on this matter by press time on Tuesday.

Membership of the Party and corporate management are two unrelated things, Su noted. “The board of shareholders is in charge of decision-making and daily operations, while Party cells are set up to make sure the company’s operations are in line with the principles and policies of the CPC,” he said.

China recently released a trial regulation for Party branches stating that Party cells inside private firms can help guide and supervise enterprises to follow the country’s laws and regulations and safeguard the legitimate interests of all parties, according to a document released on Sunday.

The cells will also contribute to team building inside companies and boost corporate development, the document showed.

“It’s crystal clear what role Party branches play in private companies,” Su said, noting that Party cells are not established with the aim of replacing management teams or meddling in decision-making processes.

Party benefits

Alibaba established its Party branch in 2000 and upgraded it to a Party committee in 2008 due to the company’s growing number of Party members, according to media reports. Alibaba now has nearly 200 Party branches and about 7,000 Party members. Ma highlighted the importance of Party construction work with younger generations, pledging to explore Party building inside high-tech firms in the new era.

Over the past few years, more and more private companies, especially tech start-ups, have set up Party branches and committees to improve management and enhance team building. Some entrepreneurs also admitted that Party members, who are usually hardworking employees, have become role models at workplaces.

“We hire graduates every year and some of them are Party members, who usually work hard and are eager to learn, creating a positive work environment,” Liu Ren, vice general manager of Dailywin Watch Group, told the Global Times Tuesday.

Tech firms such as iFlytek and smartphone maker Xiaomi have been strengthening their Party construction work. “The rapid development of iFlytek is thanks to the correct guidance of the CPC and the hard work of Party comrades, who are also the backbone of our management team,” Wu Dehai, Party chief of the CPC committee of the company, told the Global Times in a recent interview.

The trial regulation for Party branches said that if there are at least three Party members in an organization, it should set up a Party branch.

The private sector is a key part of China’s reform and opening-up, and it has been developing with Chinese characteristics, Su noted.

“The interests of shareholders of listed private companies do not contradict the core interests of the CPC, as the Party also wants to pursue opening-up and economic growth,” he said.