Cosas de España/Galiza
Galicia has a ‘garlanded’ celebrity architect called César Portela, who’s naturally something of a modernist. Years ago, I was horrified by these cemetery niches of his on the hillside above the lighthouse at Finisterra. Never used, they look even worse now:-
I read that: Romans are hostages in their own homes, as increasingly aggressive wild boar rule the streets. We can’t be far off this in some of our villages. I’m reminded of the huge one which – not long ago – crossed my path on the edge of the woods, only 200m from my house.
We have a new celebrity judge in Pontevedra city. This is a lady with a side-line in telling fortunes from Tarot cards. She’s been working in the La Coruña Court for Violence against Women but has been transferred to our Juvenile Court. Whether this is a promotion or demotion – or neither – I can’t say.
The cyclists and e-scooterists still hurtling through Pontevedra’s narrow streets are exactly those you’d predict would do so:- 1. Those who were the fastest, most reckless and inconsiderate before the new law came in, and 2. Those delivering food. I’m pondering the strategy of sporting a cane held horizontally, so that they can’t get within a metre of me. And might even have to slow down or stop. As a Spanish friend has said: ‘It’ll only change when someone is killed.’
Maria’s Beginning Over 15: In Mourning
I recently returned to the entertaining stories of an (anti)hero of my younger years – the cad, Harry Flashman. Reading the first one again, I found it was set in Afghanistan, specifically at the time of a British disaster that, coincidentally, I’d recently read a full historical account* of . Anyway, a further coincidence is this article on current British attitudes to its ex-empire
T*he Return of a King: The Battle for Afghanistan, 1839-42
Talking about British attitudes . . . Many of us Brits resident in the EU are said to be ’embarrassed to be British’. Personally – critical as I am – I wouldn’t go that far. Except as regards the Prime Minister, of course. Who is hardly the country’s best ambassador. Or even his own party’s. Least of all his own.
Has the West really got China catastrophically wrong? See the article below. Taster: Unlike Russia, which wants to upend the global system, China wants to run it. That at least offers some cause to believe that some form of engagement and dialogue is possible even between adversaries.
The Way of the World
Nearly every other teenage girl I know refuses meat and eats the unhealthiest diet ever: basically carbohydrates and fake food full of chemicals.
Comfortably two decades into the age of the internet, we still haven’t really figured out what online privacy means. As in, we have still not conclusively decided whether the stuff you do on a screen is a) an extension of your own private thoughts, or b) tantamount to screaming in the streets. When it suits them, tech companies opt for b).
Most Spanish country names are similar to their English counterparts, as with Lithuania/Lituania and Estonia/Estonia but the 3rd small Baltic state – Latvia in English – is Letonia in Spanish. Research on the origin of the country’s original name provides no real clues as to why. Ancient Germans called it Livland, hence the Latin name Livonia. Which, I guess, is closer to Letonia that Latvia.
Finally . . .
Kim Kardashian and that Monroe dress: Yesterday I suggested it needing to be either alterable or capable of stretching. It seems not. Said Ms Kardashian: “When it didn’t fit me, I wanted to cry because it can’t be altered at all.” Instead, she altered her body, embarking on a strict diet and exercise regime and losing 7.3ko(16lb) in 3 weeks.
How the West got China so catastrophically wrong: Fifty years of encouraging closer economic links with Beijing has proved misguided: George Magnus, a research associate at Oxford University’s China Centre and at SOAS, former UBS Chief Economist, and author of Red Flags: Why Xi’s China is in Jeopardy”: The Telegraph
At the start of the Winter Olympics in Beijing in early February, Xi Jinping and Vladimir Putin stood shoulder to shoulder to declare the two countries’ “friendship without limits”. In a 5,000-word statement meant to highlight their unbreakable bond, the pair sought to exploit what they believed to be the terminal decline of the West. Their intent was to make the world safe for autocracy. Since then, world affairs have not evolved as the pair expected, to say the least. Europe, the US and their allies around the world have come together in support of Ukraine. The old global system the two autocrats had been so dismissive of is fighting back. Putin’s Russia has become a pariah in the global system, and Xi’s China will have to bear the consequences of committing to support it.
Yet for all the horror and carnage in Ukraine, the mass graves and the atrocities, China represents the larger and more enduring challenge to the world order of the two authoritarian empires. It is a $16 trillion (£12.7 trillion) economy, the biggest export nation in the world, and the hub of global supply chains.
It is deeply integrated into a global system spanning trade, commerce, investment, finance, science and education. And it has become a geopolitical rival and ideological adversary of the West, amid intense mutual distrust over national security, values, standards and beliefs.
President Nixon’s famous trip to China in 1972 kicked off decades of integration and optimism that the country could be integrated into the world liberal order. Its 50th anniversary was noted earlier this year without fanfare or enthusiasm by either side – unsurprisingly, given how badly wrong the West’s great gamble has gone.
From golden arches and eras, to dust
It was not all smooth sailing. Decades of generally improving and closer economic relations with China were punctured frequently by spats over human rights, trade, currency manipulation, jobs and weapons sales to Taiwan, as well as an array of foreign policy tensions including over North Korea and Iran. After the brutal suppression of the Tiananmen Square protests in 1989, America even imposed trade and technology sanctions.
But as the world gazed at China from the outside, welcome developments were unfolding under the leadership of Deng Xiaoping. Under the ‘reform and opening up’ campaign, which lasted until relatively recently, China did change greatly. It experimented with different forms of ownership, incentives and elementary property rights in agriculture, and later in industry, and encouraged mutual exchanges of experts with foreign countries to learn about markets and different economic practices.
After a Tiananmen hiatus, Deng re-energised the reform agenda and passed on the baton to his successors. In the 1990s, China abandoned its housing welfare system for a proper residential market and undertook sweeping reforms in state enterprises, embraced privatisation, and created special economic zones to attract foreign businesses and promote exports.
This led to a partnership that was regarded as extraordinary, not just in China but in the West as well, as we tried to take on board the consequences of the fall of the Soviet Union, including what many regarded as a green light for globalisation. Bill Clinton, who criticised the George HW Bush Administration for ‘coddling with dictators’ as a candidate for the presidency in 1992, began his term by passing an executive order linking China’s trade status with human rights.
But by 1995, when China applied formally to join the World Trade Organisation, the mood in Washington had changed. Clinton went to China in 1998 and made a deal with Premier Zhu Rongji that paved the way for accession in 2001.
The American commentator Thomas Friedman epitomised the optimism of the age with his Golden Arches Theory of Conflict Prevention, according to which no two nations with McDonald’s restaurants would go to war.
This was just a more colloquial take on the 19th century notion that high levels of economic integration would stop conflict because the economic costs would be too high. Friedman later refined this with the Dell Theory, in which no two countries that were part of the same global supply chain would fight or punish one another. This proved to be accurate in the case of America’s spats with, say, its ally Japan, but turned out to be woefully misguided with regard to autocracies and zealots.
China’s WTO accession remains one of the most controversial developments over the last decades. In 1992, independent presidential candidate Ross Perot grabbed 19pc of the vote, helping defeat Bush, partly owing to a critique of trade with the Chinese.
In 2000, when Congress agreed to permanent trade liberalisation with Beijing, the United Steelworkers of America denounced the deal as a “betrayal of workers’ interests” and warned that factories would disappear as a result. Blue collar discontent has lingered since then and was played on heavily by Donald Trump.
But Clinton believed it would enhance American exports, and push China even further toward economic reforms. The thinking was that as China became wealthier and more stable, the threat to global stability would diminish and liberalisation would liberate the potential of the Chinese people to demand more inclusive government.
Today, these judgments look naive at least. Despite concerns about China’s industrial policies, currency management, and technology transfer and market access practices, the direction of travel regarding economic and commercial engagement was cast in stone and pushed on by both George W Bush and Barack Obama.
Bush labelled China a strategic competitor, but cosied up to the regime anyway. He allowed ongoing negotiations across a wide range of economic and financial matters. He believed that commercial incentives, even in totalitarian countries, would make “the move to democracy become inexorable”.
The Obama administration, formed in the hurricane of the financial crisis, was similarly warm towards China and resisted demands to stand up to the country as it became more truculent in foreign policy. Obama did little after 2012 when the country’s new leader, Xi Jinping, developed the Belt and Road Initiative to influence global trade and weaponised islands in the South China Sea.
The financial crisis was also used by China to speak out more forcefully. While noting that foreign investment was still flowing strongly into the country, Beijing sought to emphasise that the American economic model was no longer fit for purpose and that the world should forsake a moribund US dollar-based financial system.
It was a theme the party continued after Trump’s inauguration in 2017, when China’s state press attacked the “heavy drawbacks” in Western democracy and said that the future belonged to “socialism with Chinese characteristics”.
Cameron and Osborne’s late show
After the financial crisis in 2008-09, the United Kingdom also needed to recover its sea legs. UK and Chinese political and trade delegations visited one another between 2010 and 2014. In 2015, the British government broke ranks with the US when it announced it would be the first G7 country to join the China-created Asian Infrastructure Investment Bank.
David Cameron’s government promoted Xi Jinping’s lavish visit to the UK that year by celebrating the start of a ‘Golden Era’ in UK-China relations.
Xi was welcomed with a 41-gun salute, and rode to Buckingham Palace in a gilded carriage with the Queen. At a state banquet, she called his visit a “defining moment in this very special year”. A deal was struck for China to invest in the Hinkley Point C power station.
The timing was poor, bearing in mind the radical change in economic and political direction that was evident in China.
The UK government and its advisers saw golden economic opportunities, but paid no attention to China’s politics, governance, or protectionist industrial policies. Amnesty International was already warning about a crackdown on human rights, claiming that 245 lawyers and activists had been arrested in the space of just five months.
There was also nothing especially golden about the UK from China’s perspective. Britain nevertheless was the biggest EU recipient of Chinese foreign investment, and China certainly had designs on the UK government’s new nuclear energy programme, the opportunities for Yuan finance in the City, and our science and technology, and education sectors.
By 2020, the gold in this short era had turned to dust. America’s trade war with China, which started in 2018, migrated into technology, communications and national security, and gradually, we too became more aware about the darker side of China’s involvement and especially interference in UK business, academia, and politics.
Theresa May was among the first Western politicians to adopt an overtly hostile attitude to China after she came to power, delaying a deal on Hinkley in 2016 because she had security concerns. She appointed Nick Timothy, a China hawk, as one of her most senior advisers.
May’s resistance – coupled with Donald Trump’s use of China as a populist tool to stoke up opposition to Democrat trade liberalisation – marked a significant turning point.
After years of pressure, Boris Johnson was forced to agree in 2020 to strip kit made by Chinese business Huawei out of mobile internet infrastructure over security concerns. Meanwhile major universities including Oxford and Cambridge earn an increasingly large income from Chinese students and have been paid donations by companies in the country.
An academic in the China Centre at Jesus College, Cambridge, warned colleagues against holding debates on China’s human rights abuses in November 2020. Jesus insisted afterwards that it has always upheld freedom of expression.
The Government in Britain is now paying far more attention to military and technological takeovers by the Chinese, and has reformed laws so it is able to intervene in a far wider array of deals on national security grounds.
A raft of investigations have been started into takeovers such as the sale of Newport Wafer Fab, Britain’s biggest microchip factory, to a Hubei-based tech business.
In the US, trade with more than a dozen Chinese tech companies has been restricted and Trump sought to ban TikTok, a social media company owned in China.
But perhaps the greatest change of all in China’s relationship with the West came with the Covid crisis. The country was sharply criticised around the world for covering up the initial scale of the outbreak, and insisting that there was no clear evidence of human to human transmission as late as January 14, 2020. British and US intelligence services have even suggested that it is “credible” that the virus originated in a Chinese lab and leaked out by accident.
It is not for nothing that the ‘golden era’ has sometimes been referred as the ‘golden error’.
Where we are now
It is easy to be critical of individuals and the naive or poorly informed decisions they made. But there is also a continuity in the behaviour of US administrations – as well as the Cameron and EU governments – that suggests something more systemic was going on too.
In other words, poor or questionable decisions that didn’t acknowledge the risks and consequences of closer engagement with China were perhaps down to a strategy which was misguided from the start.
This approach was based partly on the idea that a stable, prosperous China was preferable to one that was poor, and perhaps in political turmoil. As such it would then be less of a threat and better serve the national interests of the US and other liberal leaning democracies, and vice versa. That was probably a fair enough call, even if it turned out to be wrong. We don’t know the counterfactual – for example, how things would have turned out if China had not been admitted to the WTO.
The other premise, that a wealthier China was bound to liberalise, democratise and become a trusted global partner, was less forgivable and should never have guided policy – especially after XI Jinping came to power in 2012. No one should have been in any doubt that China was at that point on the cusp of dramatic political and ideological change.
In Hong Kong, Xi has effectively dismantled the “one country, two systems” approach agreed with Britain by enacting a security law which makes political dissent punishable by imprisonment. Protests have been forcibly put down by police.
Meanwhile, the Uighur minority group in Xinjiang is being subjected to mass internment, round the clock monitoring and even forced sterilisation, according to the China scholar Adrian Zenz.
In the West, China has been accused of hacking on a massive scale to steal intellectual property and military secrets. America’s Office of National Counter Intelligence Executive has described Chinese actors as the “world’s most active and persistent perpetrators of economic espionage”.
The Covid crisis has only made the divide more stark. China’s determination to permanently eliminate the disease has led to prolonged and brutal lockdowns that have damaged its economy and forced it to lock thousands of people in Shanghai and elsewhere indoors against their will.
It has over a decade taken action against Norway, Japan, the Philippines, Vietnam, South Korea, Canada, the EU, the UK, and especially Australia, which has endured widespread export bans and political interference following its demands for an international inquiry into the origins of Covid.
In the latest turn of events, a row has blown up over a secret agreement that expands Chinese influence and security arrangements in the Solomon Islands, believed to be the first such bilateral agreement with a country in the Pacific.
It is hard for governments and businesses to come to terms with this. They have spent years, if not decades, building their China strategies and getting used to the idea that China’s market and power, warts and all, is the future and unstoppable.
It is true that high levels of integration are hard to disentangle, but this thinking could turn out to be as flawed as the one that led our politicians astray in the 1990s and 2000. And that is before considering the significance and consequence of China’s two most recent shocks – its zero-Covid policy and the Russian invasion of Ukraine.
China is the biggest or nearly the biggest trade partner for about 120 countries across all continents. It is the hub of global supply chains, hoovers up copious quantities of copper, iron ore, oil and other raw materials from Perth to Peru, and has acted as a magnet for foreign manufacturing, financial and other service producing companies, captivated by China’s market size, or committed to it as the ideal place to make or assemble manufacturing, technology and financial products. It is certainly a technology leader in many, but by no means all branches of science and engineering.
The world’s dependency on China is legendary. Production of a lot of lower value goods, such as toys and textiles, has moved to the likes of Vietnam and Bangladesh, but China still supplies the West with clothing, footwear, sporting equipment, cooking and home appliances, and furniture.
We also rely on China for some so-called rare earth elements, the minerals used in mobile phones and for electric vehicles, batteries, solar energy equipment, smartphones, tablets, TVs, computers and other office equipment.
As our experiences of Covid demonstrated, China also supplies large quantities of pharmaceutical and medical equipment, antibiotics and prescription drugs.
The US-China relationship is one of the most complex and interdependent in the world. The value of their engagement is more than $2 trillion. Bilateral trade in goods and services runs at a bit more than $700bn a year. The stock of US investment in China is a little shy of $150bn, while China’s in the US is about $60bn.
China’s government holds over $1 trillion of US financial assets in its currency reserves of more than $3 trillion, and probably more as some assets are held in offshore financial centres or outsourced to private foreign managers.
Bank loans have financed China’s Belt and Road, accounting for the bulk of the $1 trillion or so of loans and projects that have accumulated since 2013. The lending has actually dried up since 2018, but China is still eager to develop what it calls the Digital and Health Silk Roads, where it wants to be the go-to place for public health goods and services and communications and technological equipment and standards.
Dependency is of course a two-way street, and China’s dependency on the rest of the world is similarly high. It needs the $1.5 trillion of annual bilateral trade that it does every year with the US and Europe. It needs the foreign firms in China that supply high technology goods and expertise, aerospace equipment and parts, and extensive know-how.
It wants foreign financial firms to supply wealth management and investment banking expertise. It remains highly dependent on imported technology, especially microchips, on which it spends more than it does on crude oil. With a closed financial sector, capital controls and a managed currency, China still needs global capital markets to be open and to invest the proceeds of its trade surpluses, which seem destined to endure.
Breaking up is not so hard to do
You could be forgiven for thinking that so much dependency working both ways would be hard to disentangle, and it is. Yet it would be a mistake to think that high levels of integration cannot be undone by politics, as indeed our predecessors learned at great cost after 1914. Today, the political drive to decouple or disengage has become much stronger.
Businesses have continued to prosper in China – until recently, at least – and have adapted to the Chinese Communist Party’s idiosyncrasies even as Xi’s China turned more authoritarian and controlling.
But from about 2020, there has been much greater edge to Beijing’s policies – not only in support of already prominent state enterprise and government involvement in the economy, but also in measures designed to bring private firms and entrepreneurs to heel.
Financial and regulatory punishment of the tech giant Alibaba, and a blizzard of regulation affecting data, finance and technology platforms, have soured the industrial mood as the government piles pressure on private firms to align their activities with the party’s social and political goals and objectives.
Corporate angst and business uncertainty have become more evident in the wake of the crackdown on Hong Kong that started in 2019, and the deterioration in relations following both the outbreak of the Covid pandemic in 2020, and revelations about the incarceration of Uighur Muslims in Xinjiang province – where Chinese oppression has even sparked claims of genocide.
The 2018 focus on trade tariffs has been replaced by an extensive network of export controls, greater scrutiny over foreign investment, restrictions on who domestic firms can do business with, and ultimately sanctions on those who fall foul of the regime.
Some of these have been applied because of Hong Kong, Xinjiang and on national security grounds, but China has also continued to punish sovereign states and companies with whose policies it disagrees.
These actions and developments have already begun to compromise firms, drawn increasingly into the awkward crosshairs where they have to choose whose rules and laws to flout and whose to follow.
China’s support for the Russian invasion of Ukraine, and more recently the quarantine and lockdown consequences of its zero-Covid policy, have taken these issues and concerns to a new, higher level.
New plans for foreign investment in China may be cut back significantly, while strategies to wean Western companies off their Chinese suppliers are also underway. The Sino-Russian partnership is driving home a new reality in which the US is seeking to strip China out of its supply chains under the expanded umbrella of national security.
China, meanwhile, is attempting to de-Americanise its own supply chains, proclaiming its focus on self-reliance in the face of what it claims is a threat from the US. It wants to secure immunity from sanctions, especially in view of the West’s response to Russia, if that is even possible.
Unlike Russia, which wants to upend the global system, China wants to run it. That at least offers some cause to believe that some form of engagement and dialogue is possible even between adversaries.
We have learned painfully that encouraging China’s economy and its rise did not make it less threatening, let alone democratic. There should be no misunderstanding now that Xi’s China harbours hidden aspirations to re-launch liberal reforms or experiment with universal values, the rule of law, and so on. The single-minded purpose of the Communist Party is to rule unchallenged, and prevail over the United States.
Curiously, though, China is hoisting upon itself a contradiction it cannot resolve. On the one hand, it has thrived and risen on the back of engagement with the rest of the world. It wants to exploit an open global system and global institutions to pursue its own agenda.
On the other, pushback against the world’s two biggest autocracies by politically aligned western nations, an enfeebled domestic economy, and China’s own politics and behaviour regarding Covid, Russia and private firms, are all prompting disengagement.
Without engagement, China’s ambition to become the world’s biggest and dominant nation may never be realised. We may have already seen Peak China under Xi Jinping.