China syndrome

By Vestnik Kavkaza

Rector of MGIMO Anatoli Torkunov is thought to be one of the most respectful experts in the sphere of international relations. Yesterday he gave his appraisal to recent developments in the USA and China.

The USA

As a man who spent several years in Washington at our embassy, and a witness over many decades to the internal life of the Americans: there was no doubt that Barack Obama would win. Some commentators claim that Obama won because during hurricane "Sandy" he had an opportunity to show himself as an outstanding leader. Obama really showed himself to be a leader, a real leader, and of course, America met "Sandy" quite differently than it did the disaster in New Orleans a few years ago, and the Americans quite effectively dealt with it. But this didn't play a major role, it seems to me, given the enormous discord and schism that exists in American society, and that we, by the way, sometimes ignore. I visit the US quite rarely, but I was there this year in March, when I met with American experts, political scientists and with old friends; I just felt this split. It touches upon almost all the main lines in public opinion: internal and foreign policy, reforms in America. Bu Obama won. So the Americans do support the idea of the country being led by a person who represents a new generation, with fresh views, more tolerance and acceptance of foreign policy.

Romney spoke straightly, and Obama on many issues, of course, having mentioned the missionary role of the US and the use of American military and political capabilities, still mentioned the need to negotiate, including negotiations with Iran. As for Afghanistan, Obama still insists on shifting more responsibility to the Afghan authorities, on minimizing the presence of US troops in Afghanistan. Romney's position is different. They have serious differences on Chinese issues. Romney has put forward a series of accusations against China, not to mention the fact that he has called China a currency manipulator. Obama says: yes, there are some contradictions and problems in our relations, but, nevertheless, as the two largest economies, we have to look for opportunities for interaction, etcetera. In short, of course, Obama is much more diplomatic than Romney. The main thing is that he is much more modern.

China

In Beijing there is a planned but fundamentally significant generational change among the leaders. And it's not just the age factor, though this also plays an important role. You know that, according to the Charter and the basic documents of the Communist Party, officials can hold on to leadership positions, primarily in the Standing Committee of the Politburo, for only two terms, or 10 years. In principle, the term is limited to 67-70 years both in the Politburo and in the government. But the point is that today a new generation has come to power - the so-called "fifth generation" of leaders of the People's Republic of China, quite different from the previous generation. First of all, this is due to the fact that those who come to power have grown up after the revolution in China.

The second circumstance is very important: they are people who, unlike most of their predecessors and the top leaders, are not representatives of the engineering and technical intelligentsia; they do not have engineering or technical educations. They have doctorates in humanities. One of them, as you know, I mean Li Keqiang, the future premier, is even the winner of a very prestigious award in China for a study, which is widely known abroad, related to the analysis of the structure of China's economy. That is, these are people of science, to some degree, and they are quite experienced; it appears that they have quite different experiences. One of them, I mean, Xi Jinping, worked in the provinces, where there was a very quick, active modernization of the economy, which used the tools of the market economy, in regions where, in essence, a new Chinese economy was created. As for Li Keqiang, he worked in a province where he had to restructure the enterprises of the old generation. They both have different, but unique experiences: working with new tools to create a fundamentally new economy with the participation of Xi Jinping, and the work on the modernization of the existing economy carried out by Li Keqiang. You know that they belong to different groups, according to our and foreign political scientists: the so-called "Young Communists" and the "Princes", if we say that the Chinese leadership has two clans, two trends in the development of a political career. I do not believe that there are clans that really differ from each other, and because the members of these clans often work together, and their fates intersect.

It will be very difficult for them, because they will have to continue and develop the policies of the "fourth generation". And the leadership of the "fourth generation" had great success. Suffice it to recall that, under the previous leadership, China put a manned spacecraft into Earth orbit in 2003. The "fourth generation" of the Chinese leadership has strengthened China's position in the world, and the complete success of the Beijing Olympics in 2008 is also an achievement of the “fourth generation”. It is clear that, in general, the development of China in recent years is due to effective leadership, which was carried out by representatives of the "fourth generation". Naturally, the "fifth generation" of the present, the leaders who are coming to power, have worked with them, but, nevertheless, the political line, of course, has been determined by the top executives and, of course, first of all by President Hu Jintao.

The "fifth generation" of leaders will face a lot of problems the day after tomorrow, after they move into the offices of their predecessors. The main problem is the lack of effective use of resources, including human resources. China is the third-largest economy in the world in terms of common stock of resources. This is not enough to ensure the dynamic growth of GDP. Therefore, China is not only a major exporter but also a vacuum cleaner, constantly absorbing natural resources. China has entered the stage of building a comprehensive well-off society and accelerating the process of modernization. Maintaining this pace of modernization and vibrant and healthy social and economic development requires relatively more resources. This was discussed at the congress. However, purchases of commodity assets abroad, which China has made in recent years, do not solve the problem. The Chinese economy is resource- and energy-consuming. A considerable amount of its production is not high quality or original. Low prices have allowed China to increase exports, bringing its share of world trade to 8%, which is driving the growth of GDP, but its production does not compete in the group of high prices, and the financial returns from all of this, too, are suffering.

The Chinese economic model employs 25 million people, and it has even formed a 300 million-strong middle class - about 21% of the population. But we cannot demand any more from it. It cannot reduce the gap with the developed countries, achieve increased productivity and reduce power consumption. Therefore, China just has to look for a new model of economic development, where growth is due to the rational use of resources. Of course, there is still quite an acute problem of migration from the countryside. Already, the share of rural residents is less than 50%, and in the future, of course, urbanization will grow further. There is also the problem of an ageing population and an increasing number of pensioners.

In short, it requires a strategic adjustment of the economic structure, and the new Chinese leadership should be engaged in this. China also faces a lot of new challenges in foreign policy. Of course, the three principles of Deng Xiaoping, the two main ones of which are non-alignment and not sticking out, will probably work, but China is gaining the features of a global country. Although it still does not state this openly, however, it is now clearly defining its range of partners: first, second, third and fourth ranges.

Russia, incidentally, is in the first range of partners; it is seen as a strategic partner in the Chinese political documents, and in official documents the task of "relying on the north", that is, relying on a partnership with the Russian Federation, is mentioned. However, it is clear that China, as the second economy in the world, cannot and does not want to give up the role of global power. However, China intends, it seems today, to find a model of foreign policy which will allow it to focus primarily on issues of economic restructuring, improving the quality of life, because in China the standard of living is still not even in the top 100. Therefore, it is a fact, and there is a goal to dramatically improve the quality of life in China by income per capita by 2020-2030. This task is extremely difficult. In addition, the G2 model proposed at one time by the Americans was not accepted by China. It is natural that there are many contradictions of every persuasion between China and the U.S. And optimists hope that economic cooperation and interpenetration, interdependence, will not lead to any serious deterioration in relations between the two countries, of course; I hope these views will be justified.

At the Eighteenth Congress the idea of political reform was clearly voiced; it was said that China needed political reform, including a requirement for successful economic development. It is still not clear so far what is meant by political reform. There are different actions in that direction. You know that the elections which take place at the local level require the presence of several candidates, and there is a real choice. In general, there is some movement; we cannot say that China is in stagnation in terms of political development and the development of the political system.  But, as I understand it, according to the top Chinese leaders, and leaders of lower rank, and many publications in political science journals and wider policy-oriented journals, by the way, China, in this sense, I think, is quite a free country, because when I read the translation, unfortunately, I cannot read in Chinese, although I studied hieroglyphics while studying the Korean language, but the extent of my knowledge of hieroglyphics is not so great, but when I read the translation of the Chinese magazines, I can see a huge range of opinions - an opportunity for Chinese experts to speak very strongly, and sometimes critically, on the leadership in Beijing. In this sense, there is freedom of speech in China. And I think this is quite a stable trend. But it is clear that the new leadership will be engaged in the problem of political reform, with the leading role played by the Communist Party of China, at least for the foreseeable future, and with the possibility of controlling the political situation for the Communist Party. I understand that the current political class considers this to be a necessary guarantee for the continuation of economic reforms and of all the modernization efforts within the country.