China comes first

It is no accident that the Chinese word for China is 中国: Zhong guo, the Middle Kingdom, i.e. centre of the world. That is how they still see themselves, and another significant word in the language is 家人: jia ren, the household, family people. They are the ones that matter most.

This week I attended a lecture in the Canada China Friendship Society series by Howard Balloch, Canada's longest serving (former) Ambassador, his subject being Xi Jinping As Helmsman: Course Changes For China. He has given this talk before and knows how to enthral his audience.

He said that Xi Jinping is the most powerful Chinese leader since Mao. He is popular and likely to remain in power until 2022. He consolidated his position very quickly, and has amassed strong men around him. The Vice President Li Yuanchou, for example, is a "tremendous reformer" and "irreversible and transformative" changes are certainly coming soon, but they will be "quiet" and "gradual." Xi's anti-corruption drive goes deeper than just getting rid of his opponents. There is a new sense of urgency: 38,000 cases of corruption were investigated last year. No longer can an ambitious man aspire to a high status if he has family members living abroad or in the entertainment business.

What we are starting to see is an "imperial China redux," said Mr. Balloch. Xi Jinping won't be willing to attack other nations but nor will he be pushed around. The dialogue between China and the USA is no longer so crucial to China's interests. What is more important is China's relationship with its immediate neighbours. There's talk of a New Silk Road these days and of a plan to build railways from China to Europe. Chinese companies (in which the state will continue to be a major shareholder) are making huge investments in the extraction of oil and minerals from the former Soviet states in the southeast where Russian influence is dwindling because of China's rise. In the race against Russia, "China has won," he said, and now it is making its presence felt in Africa too (for the sake of Africa's resources") and is "getting better at it." It is as well to remember, though, that China's leadership is not internationalist in its outlook. China's own economic interests always come first.

They have now relaxed the one child per family policy, although local authorities are still applying the policy in "reprehensible ways" and, interestingly, upwardly mobile professionals often do not want more than one child these days. English is now the second language used in China, particularly by the younger generation, and this is encouraged. It will be interesting to see if Chinese script survives or whether it will be superseded by Pinyin. Up to 18 million people per year are moving into the cities––this is encouraged. The buildings that went up in the 80s and 90s are of such poor quality that they need to be torn down and replaced, but house prices are presently coming down. For the present leaders of China, the improvement of the environment is a high priority, the citizens being particularly aware of the dangers of air pollution, and expressing their opinions in demonstrations, to which the government is responding. There's a feeling that they "must get it right" and again, Mr. Bulloch used the phrase "a deep sense of urgency."

He said a good deal about the Chinese economy: its growth is being kept to 7% and a "rebalancing" of the economy is taking place. In the financial sector private banks are forming, although in general the bias is towards state owned enterprises. Up till 1978, only 0.05% of the world population were poorer than the average Chinese citizen, based on per capita income. Now, the percentage is 50%, and China contributes 25% of global growth. In the not so distant future the RMB (renminbi) will become "fully convertible."

Social reform is a fragile process but it "really is happening," as is land reform, farmers now starting to own their own properties. A more western style of taxation is being introduced (VAT, property tax, etc.). In the late 1990s CIDA initiated a major program for the training of Chinese judges from China’s Senior Judges College, which has borne fruit, and from now on there'll be a more vertical (less local) structure to the Chinese legal system with circuit courts and appeal courts, and the public reporting of judgements––all new concepts. But Mr. Bulloch kept stressing that China's well established infrastructure and culture takes a long time to change, that there is resistance at first and that the final results of the drive to reform things are likely to be compromises. The law is still subservient to the Party.