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  When China Rules the World

  Martin Jacques

  For well over two hundred years we have lived in a western-made world, one where the very notion of being modern is inextricably bound up with being western. The twenty-first century will be different. The rise of China, India and the Asian tigers means that, for the first time, modernity will no longer be exclusively western. The west will be confronted with the fact that its systems, institutions and values are no longer the only ones on offer. The key idea of Martin Jacques's ground-breaking new book is that we are moving into an era of contested modernity. The central player in this new world will be China. Continental in size and mentality, China is a 'civilisation-state' whose characteristics, attitudes and values long predate its existence as a nation-state. Although clearly influenced by the west, its extraordinary size and history mean that it will remain highly distinct, and as it exercises its rapidly growing power it will change much more than the world's geo-politics. The nation-state as we understand it will no longer be globally dominant, and the Westphalian state-system will be transformed; ideas of race will be redrawn. This profound and far-sighted book explains for the first time the deeper meaning of the rise of China.

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  China Digital Times

  Book Review: When China Rules the World

  “When you’re alone and life is making you lonely, you can always go: downtown.” So warbled the British singer, Petula Clark in the 1960s. However, today if solitude is your constant companion, I would suggest that you purchase a copy of this riveting book and read it on the bus and in airports — as I have been doing in recent days, with the dramatic words on the bright red cover of this weighty tome blaring insistently — and no doubt you will find, as I have, that your reading reverie will be constantly interrupted by a stream of anxious interlopers curious to know what the future may hold.

  For like Petula Clark, the author too hails from London, though the startling message he brings decidedly differs from her melancholy intervention. For it is the author’s conclusion that sooner rather than later, China — a nation ruled by a Communist Party — will have the most sizeable and powerful economy in the world and that this will have manifold economic, cultural, psychological (and racial) consequences. Strangely enough, Jacques — one of the better respected intellectuals in the North Atlantic community — does not dwell upon how this monumental turn of events occurred. To be sure, he pays obeisance to the leadership of Comrade Deng Xiaoping, who in 1978, opened China’s economy to massive inward foreign direct investment, which set the stage for the 21st Century emergence of the planet’s most populous nation. Yet, for whatever reason, Jacques — who once was a leading figure in the British Communist Party — does not deign to detail to the gentle reader how Beijing brokered an alliance with US imperialism, that helped to destabilize their mutual foe in Moscow, which prepared the path for the gargantuan capital infusion that has transformed China and bids fair to do the same for the world as a whole.

  Still, it is noteworthy that this book’s back-cover carries blurbs from the conservative economic historian, Niall Ferguson of Harvard (Henry Kissinger’s authorized biographer); the leading historian, Eric Hobsbawm; the well-known Singaporean intellectual and leader, Kishore Mahbubani (who has written a book that mirrors Jacques’ earthshaking conclusions); and a raft of Chinese thinkers who do not seem displeased nor surprised by his findings.

  Martin Jacques

  When China Rules the World

  ***

  For Hari

  My love for you knew no limits, nor has it dimmed with time.

  I miss you more than words can ever say.

  Acknowledgements

  My interest in East Asia dates back to a visit to the region in 1993 when I also happened to meet my wife to be, Harinder Veriah, on Tioman Island, Malaysia. The idea for this book dates back to 1996. In 1997-8 contracts were signed and plans drawn up for us to be based in Hong Kong for three years. At the beginning of November 1998 we arrived in Hong Kong with our nine-week-old son, Ravi. Just fourteen months later, Hari died in the most tragic circumstances. It was five years before I could resume work on the book. I would like to thank everyone who, in their different ways, gave support and helped me survive the darkest days anyone could possibly imagine, especially Marlene Hobsbawm, Karena Ghaus, Ian Selvan, Rabindra Singh, Jasvinder Kaur, Graham Huntley, Joe Collier, Stuart Hall, Antonio Borraccino, Selvi Sandrasegaram, Paul Webster, Dhiren Norendra, Bob Tyrrell, Frances Swaine, Douglas Hague and Shariza Noordin.

  I am very grateful to Eric Hobsbawm (a very close friend for over thirty years), Niall Ferguson (who first planted the idea in my mind that I should write this book), Christopher Hughes and Arne Westad for reading the manuscript and making many valuable suggestions as to how it might be improved and hopefully at least saving me from the worst of my mistakes and indiscretions. Chen Kuan-Hsing read Chapter 8 and has discussed many of the ideas in it with me over the last few years. I, of course, remain solely responsible for the book as it now appears, warts and all.

  I would like to express my gratitude to Tony Giddens, former director of the London School of Economics, and Meghnad Desai, then chairman of the Asia Research Centre, who arranged for me to become a visiting research fellow at the Centre in 2004, a connection which has continued to this day. I am also now a senior visiting fellow at the LSE’s IDEAS, an association for which I would like to thank Michael Cox and Odd Arne Westad. I was a visiting professor at the International Centre for Chinese Studies, Aichi University, Nagoya, for four months in early 2005, where I received splendid hospi-tality from Professor Mitsuyuki Kagami and Professor Kazumi Yamamoto, who I would like to thank most warmly. For three separate periods in 2005-6 I was a visiting professor at Renmin University, which I enjoyed immensely; in particular I would like to thank my generous host, Professor Song Xinning. In autumn 2005 I was invited by Professor Nishi to be a visiting professor at Ritsumeikan University, Kyoto, which proved rewarding. I spent four months at the beginning of 2006 as a senior research fellow at the Asia Research Institute, National University of Singapore, for which I would like to thank the then Director Professor Anthony Reid. These visits assisted me enormously in both my research and writing.

  The Barry Amiel and Norman Melburn Trust gave me generous financial assistance to enable me to carry out my research. Having had the privilege of knowing both while they were still alive, I hope they would think their money has been put to good purpose. I am grateful to the trustees for their support.

  During the course of 1999, before my wife died, I spent almost a month in each of Shanghai, Tokyo and Taipei. I am very grateful to the following for sparing me the time to share their ideas with me: Dai Badi, Tong Shijun, Gu Xiao-ming, Xie Xia-ling, Melvin Chu, Jiao Chun-xue, Ma Lian-yuan, Wang Xiaoming, Wu Jiang, Yang Qingqing, Christopher Tibbs, Lu Hao, Ge Jianxiong, Zhou Jun, Shen Kai, Graham Earnshaw, Sun Xiaolong, Cao Jingyuan, Chen Xiaoming, Teng Xuekun, Yu Zhiyuan, Yu Ming, Qiao Yiyi, Zhang Xiaoming, Wang Jianxiong, Huang Yongyi, James Harding, Ma Chengyuan, Shen Guanbao, Gao Rui-qian, Frank Gao, Hsu Feng, Qui Genxiang, Kevin Tan, Ji Guoxing, Xu Jilin, Bao Mingxin, Qiao Yiyi, Lu Yongyi (Shanghai); Chen Kuan-Hsing, Sechin Yung-xiang Chien, Chu-Joe Hsia, Liang Lu, Ling Mei, Hsu Hsin-liang, Hung Tze Jan, Stan Lai, Johnny Tuan, Bing C. P. Chu, Sen Hong Yang, Sheena Hsu, Wei-Chung Wang, Ti-Nan Chi, Ku Chung-Hwa, Yun-Peng Chu, Wan-Wen Chu, Chihyu Shih, Andrew Nien-Dzu Yang, Ping Lu, Jian-San Feng, Edward Wong, Szu-Yin Ho, Chen-Kuo Hsu, Chunto Tso, Chieh-Fu Chen, Chiang Sung, Hsiung-Ping Chiao, Christopher R. Fay, Benny T. Hu, Allen Chun, Antonio Chang, W. S. Lin, Darlene Lee (Taipei); Chie Nakane, Kiyoshi Kojima, Kosaku Yoshino, Kiyohiko Fukushima, Tatsuro Hanada, Shunya Yoshimi, Noriko Hamo, Yukiko Kur
oda, Mitsutoshi Kato, Odaka Naoko, Tadashi Nakamae, Peter Tasker, Martin Reeves, Takashi Kiuchi, Yoichi Funabashi, Kiichi Fujiwara, Shinji Fukukawa, Toshiya Uedo, Sahoko Kaji, Takashi Yamashita, Kang Sangjung, Yoshiji Fujita, Masa moto Yashiro, Sadaaki Numata, Richard Jerram, Valerie Koehn, Mark Dytham, Astrid Klein, Tetsuo Kanno, Tadashi Yamamoto (Tokyo).

  I am grateful to Kenneth Yeang, Zeti Akhtar Aziz, Mohamed Arif Nun, Jomo Kwame Sundaran, Shad Saleem Faruqi, Francis Yeoh Sock Ping and many others for interviews in Kuala Lumpur. In particular, I owe a large debt of gratitude to the late Noordin Sopiee, who always found time to chew the fat during my frequent visits. Although Hong Kong was more a base than a place for field research, I would like to mention Frank Ching, John Gittings, Oscar Ho, Andy Xie, Christine Loh, Lian Yi-Zheng and K. Y. Tang, again amongst many others, who gave of their time. During a visit to San Francisco I gained a better insight into the Chinese community there, especially through my conversations with L. Ling-Chi Wang and Albert Cheng. I interviewed Xin Hu, Miles Lee, Zhang Jiansen and Charlie Zheng in Shenzhen. I would particularly like to thank Wang Gungwu, Geoff Wade, Kishore Mahbubani, Chua Beng Huat and Anthony Reid for spending time with me during my stay in Singapore. Professor Mitsuyuki Kagami and Professor Kazumi Yamamoto never failed to find time for our many conversations during my stay at Aichi University, while Chunli Lee shared with me the fruits of his studies on the Chinese automobile industry and Uradyn E. Bulag discussed China ’s relationship with Mongolia. I also learnt a great deal from my Chinese doctoral students whom I had the privilege of teaching whilst I was there. I would like to thank my friend Chen Kuan-Hsing for providing me with constant advice and assistance during my various stays in East Asia, especially Taiwan, Japan and Singapore.

  My stay in Beijing in 2005-6 was the source of much enlightenment. I whiled away the time in many fascinating conversations. I would particularly like to thank Song Xinning, Jin Canrong, Zhu Feng, Fang Ning, Zhang Yunling, Wang Yizhou, Zhu Wenhui, Wang Yuqing, Feng Zhongping, Wang Zhengyi, Pan Wei, Wang Hui, Wang Xiaodong, He Zengke, Kang Xiaoguang, He Guangbei, Ye Zicheng, Yu Zengke, Zha Daojiong, Cheng Lu, Liu Xiu and Liu Hua. My greatest debt of all is to Yu Yongding, Huang Ping and especially Shi Yinhong, who have been unfailingly helpful and hugely stimulating in the many conversations I have enjoyed with them.

  Zhang Feng has assisted me with great thoroughness and efficiency on the footnotes and bibliography, as well as doing some background research on Chapter 11. Sherlyn Wong has conscientiously sought to obtain the necessary permissions.

  I am very fortunate in having a fine agent in Andrew Wylie, to whom I owe a debt of gratitude. I would also like to thank my previous agent Georgina Capel, who helped to initiate the project.

  I have been blessed with an excellent editor in Stuart Proffitt. He has been enormously conscientious and painstaking in his editing, for which I am extremely grateful. Perhaps most of all, I am indebted to Stuart for his sensitivity towards me after my wife’s death, when he realized that it was impossible for me to work on the book; his timing was perfect two years later when he gently broached the question again with me. I would like to thank Penguin for their patience and forbearance with an author who took far longer to complete his book than was originally intended. I would like to thank Peter Carson for originally commissioning the book, Phillip Birch for his assistance on numerous occasions, Jane Birdsell for her conscientiousness, patience and good humour during the copy-editing, Samantha Borland for taking admirable care of the maps, tables and figures, and Richard Duguid for overseeing the production of the book and making sure that it somehow managed to meet the prescribed publication date.

  I would like to thank Cristina Pilien, who helped to look after our son Ravi when we were in Hong Kong and has continued to do so in London ever since, for her extraordinary kindness, loyalty and devotion. As I write, Ravi and I are very proud that she is studying Chinese at Beijing University.

  My greatest debt of all is to Ravi, our son, who is now ten years old and who was just sixteen months when Hari died. It has been an unspeakably painful, sad and cruel decade but together we have found a way to play, live and grow. Ravi, you have been my reason, the source of such pride and pleasure. Thank you for putting up with all those endless days and months when Daddy has been, in your words, in ‘his prison’, otherwise known as my study. What has kept me going are all the times in between that I have spent with you, messing about, enjoying your company, listening to you play the violin and taking delight in your ever-expanding range of interests and gifts: Mummy would have been thrilled. This book is for you but, as you know, it is dedicated to the memory of your mother who I loved beyond all reason or belief. She would have been so proud of us for having found the will and fortitude to complete the book despite the cruel hand of Fate. She cannot share this moment of pleasure with us. The aching emptiness of her absence stills any sense of elation.

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  Map 1. China

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  Map 2. East Asia

  Note on Transliteration, Names and Currency

  The Pinyin system of transliteration, adopted in the People’s Republic of China in the 1950s and now generally used worldwide, has been employed in this book, with the exception of some names which are most familiar in the older Wade-Giles system (for example, Sun Yat-sen and Chiang Kai-shek).

  Chinese names are generally written in English style, with the family name first, except in those few cases where they are usually written in Western form with the family name second. Japanese names vary, with the family name sometimes written first (as in Japan), but where they are usually written in English with the family name second, as is often the practice, the same approach has been followed.

  The Chinese currency, often known as the yuan, is referred to in this book as the renminbi.

  Major Periods in Imperial China

  1. The Changing of the Guard

  Since 1945 the United States has been the world’s dominant power. Even during the Cold War its economy was far more advanced than, and more than twice as large as, that of the Soviet Union, while its military capability and technological sophistication were much superior. [1] Following the Second World War, the US was the prime mover in the creation of a range of multinational and global institutions, such as the United Nations, the International Monetary Fund and NATO, which were testament to its new-found global power and authority. The collapse of the Soviet Union in 1991 greatly enhanced America ’s pre-eminent position, eliminating its main adversary and resulting in the territories and countries of the former Soviet bloc opening their markets and turning in many cases to the US for aid and support. Never before, not even in the heyday of the British Empire, had a nation’s power enjoyed such a wide reach. The dollar became the world’s preferred currency, with most trade being conducted in it and most reserves held in it. The US dominated all the key global institutions bar the UN, and enjoyed a military presence in every part of the world. Its global position seemed unassailable, and at the turn of the millennium terms like ‘hyperpower’ and ‘unipolarity’ were coined to describe what appeared to be a new and unique form of power.

  The baton of pre-eminence, before being passed to the United States, had been held by Europe, especially the major European nations like Britain, France and Germany, and previously, to a much lesser extent, Spain, Portugal and the Netherlands. From the beginning of Britain ’s Industrial Revolution in the late eighteenth century until the mid twentieth century, Europe was to shape global history in a most profound manner. The engine of Europe ’s dynamism was industrialization and its mode of expansion colonial conquest. Even as Europe’s position began to decline after the First World War, and precipitously after 1945, the fact that America, the new rising power, was a product of European civilization served as a source of empathy and affinity between the Old World and the New World, giving rise to ties which found expression in the idea of the West [2] while serving to mitigate the effects of latent imperial rivalry between Britain and the Unite
d States. For over two centuries the West, first in the form of Europe and subsequently the United States, has dominated the world.

  We are now witnessing an historic change which, though still relatively in its infancy, is destined to transform the world. The developed world — which for over a century has meant the West (namely, the United States, Canada, Western Europe, Australia and New Zealand) plus Japan — is rapidly being overhauled in terms of economic size by the developing world. [3] In 2001 the developed countries accounted for just over half the world’s GDP, compared with around 60 per cent in 1973. It will be a long time, of course, before even the most advanced of the developing countries acquires the economic and technological sophistication of the developed, but because they collectively account for the overwhelming majority of the world’s population and their economic growth rate has been rather greater than that of the developed world, their rise has already resulted in a significant shift in the balance of global economic power. There have been several contemporary illustrations of this realignment. After declining for over two decades, commodity prices began to increase around the turn of the century, driven by buoyant economic growth in the developing world, above all from China, until the onset of a global recession reversed this trend, at least in the short run. [4] Meanwhile, the stellar economic performance of the East Asian economies, with their resulting huge trade surpluses, has enormously swollen their foreign exchange reserves. A proportion of these have been invested, notably in the case of China and Singapore, in state-controlled sovereign wealth funds whose purpose is to seek profitable investments in other countries, including the West. Commodity-producing countries, notably the oil-rich states in the Middle East, have similarly invested part of their newly expanded income in such funds. Sovereign wealth funds acquired powerful new leverage as a result of the credit crunch, commanding resources which the major Western financial institutions palpably lacked. [5] The meltdown of some of Wall Street’s largest financial institutions in September 2008 underlined the shift in economic power from the West, with some of the fallen giants seeking support from sovereign wealth funds and the US government stepping in to save the mortgage titans Freddie Mac and Fannie Mae partly in order to reassure countries like China, which had invested huge sums of money in them: if they had withdrawn these, it would almost certainly have precipitated a collapse in the value of the dollar. The financial crisis has graphically illustrated the disparity between an East Asia cash-rich from decades of surpluses and a United States cash-poor following many years of deficits.