A better life

How the new era is reshaping China and redefining the ways it engages with the rest of the world

When General Secretary Xi Jinping defined China's new era in his report to the 19th National Congress of the Communist Party of China in October last year, he not only set a new domestic agenda for China, including ambitious goals to improve people's lives and livelihoods, but also outlined a more central role for the country on the world stage.

Now, more than seven months on, how defining does that speech remain, and how are China and the world interpreting Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era?

Visitors tests Huawei P20 series mobile phones during Huawei's new product announcement in Paris. Zhang Xuefei / Xinhua

China Daily asked a number of China experts and economists to give their assessment, in terms of whether the new era has reshaped China's position in the world, given the country itself fresh momentum, set the country's economy on a new course and changed the debate about government systems.

Ian Goldin, professor of globalization and development at Oxford University and a former economic adviser to Nelson Mandela when Mandela was South Africa's president, believes the dawn of China's new era is a "watershed moment" for the world.

"President Xi was saying that the future of the Chinese people and of the Communist Party advancing depended on a more active engagement with the rest of the world," he says.

"This means a significant role for China in the global common issues such as finance, trade, pandemics, climate change and cybersecurity. They all depend on cooperation and more active engagement in the world."

Kerry Brown, director of the Lau Institute at King's College London and author of The World According to Xi: Everything You Need to Know About the New China, says that by embarking on a new course, China is bound to have a dramatic effect on the rest of the world.

"If China has a new era, then the world is going to have a new era, because of the way China now impinges on that new world," he says.

"China has become this very prominent geopolitical actor in a short space of time. It is not going to be like the United States in its prime. It is going to be much more collective in its approach and more of a stabilizer on the world stage."

Even before last year's national congress, China was already showing greater global leadership.

President Xi's speech to the World Economic Forum at Davos in January 2017, stressing the importance of globalization, was in marked contrast to US President Donald Trump's isolationist "America First" stance and came just before Trump's inauguration.

However, in his report to the national congress, Xi gave many the sense that China now had some overarching view of itself and what it wanted to achieve.

Former UK foreign secretary William Hague, writing in his column in the Daily Telegraph earlier this month, said this was no longer true of the West, with the US and Europe, in particular, now divided on a number of global issues.

"It was a relief to me when sometimes the foreign ministers of Australia or Canada would say, 'Let's have a bottle of wine and discuss the strategy of the Western world', which we would proceed to do," he wrote.

"Three or four years ago, for leading foreign ministers to discuss their common global strategy was hopeful but still realistic. Today, it would seem ridiculous."

Hague says very few countries now have any sort of global strategy, but China has one.

"Most significant, China has one, set out by Xi Jinping, with goals for the country's strength and role in world affairs."

Much of the success of the new era is seen as depending on China achieving three major goals.

The first, now just two years away, is to double China's 2010 GDP per capita by 2020 and to become a "moderately prosperous society", thus also eliminating all extreme poverty, in time for the 100th anniversary in 2021 of the founding of the CPC.

China's next centenary goal is to mark the 100th anniversary of the founding of the People's Republic of China in 2049, when the country will emerge as a "great modern socialist country in every dimension".

Xi also set out a completely new target in his report, that for 2035, at the halfway point between the "Two Centenary Goals".

Key to this target is addressing the environmental degradation that has resulted from the industrialization of the economy in China's first phase of modernization, since reform and opening-up in the late 1970s, and to create a "Beautiful China", which has resonance in classical Chinese literature.

Also important is reducing the disparities between urban and rural development and giving people from impoverished communities greater access to public services.

China has also set the goal that, within 17 years, it will become a global technology leader.

With China reporting 6.9 percent GDP growth in 2017 - the first annual acceleration in seven years - and a higher-than-expected 6.8 percent in the first quarter of this year, the most immediate target, that for 2020, should be easily achieved with growth of a little more than 6 percent from now on.

This effectively involves China breaking out of the so-called middle-income trap, under which a country achieves a certain income level and then gets stuck there, that has befallen so many Latin American countries, in particular.

George Magnus, associate of the Oxford University China Centre and a leading expert on China's economy, now believes this target will be easily reached, despite earlier concerns that the economy might be overreaching to achieve it.

"The major question now is where growth goes from the 2020s onward, and whether there is a move away from setting quite ambitious targets or whether targets are abandoned altogether," he says.

What is now attracting a lot of attention is China's aim to be a global technology leader and make breakthroughs in such areas as artificial intelligence and robotics.

The 2035 target to achieve this has certainly intensified efforts on the ground.

Cai Rui, the 41-year-old deputy director of the Dalian Institute of Chemical Physics, one of China's national-level science institutes, says local governments are now knocking on the door of institutes like his in order to advance the national technology effort.

He says that when he returned from the US in 2010 and "went to the city government and talked to them about supporting ideas, the response was often quite slow. Now they just come to us and ask for our ideas."

In addition, there has been an exponential rise in the number of science, technology, engineering and mathematics graduates in China. According to the World Economic Forum, China had the highest number of such STEM graduates in the world in 2016, with 4.7 million - more than eight times the 568,000 in the US.

The 2017 EU Industrial R&D Investment Scoreboard, a report published in December by the European Commission, pointed to an 18.8 percent increase in research and development spending by some of China's top companies in 2016. This compares with an increase across the European Union of 7 percent, a 7.2 percent increase in the US and a 3 percent decrease in Japan.

Until recently, the view in the West was that the quality of Chinese research and development was not at the level of that in either the United States or Europe, but this perception is beginning to change, as China begins to make breakthroughs in key technologies.

Rui, who has firsthand experience at research facilities in both the US and China, does not believe that there is now any great disparity.

"I just don't think this is true. China is a big country and we have many different universities. I think people here are often more diligent and devoted to their studies," he says.

It is the prospect of the US falling behind in key technologies that is seen to be behind many of the tensions that now exist between the world's two largest economies.

Michael Spence, winner of the Nobel Prize and professor of economics at New York University's Stern School of Business, says that being behind in digital technologies, which will be central to defense and security, would be particularly uncomfortable for the US.

"I think China is on the way there (to being ahead), and I don't really know how to predict the American response."

Meanwhile, for China's new era to be successful depends on economic reform, as Xi made clear in October, when he said the "principal contradiction" of China's development had to evolve.

In the 40 years since Deng Xiaoping's reform and opening-up in the late 1970s, that contradiction was between "the ever-growing material and cultural needs of the people and backward social production".

It was essentially resolved by introducing market reforms that led to China becoming the manufacturing workshop of the world as well as its second-biggest economy.

Xi says the aim now is to address a new principal contradiction that between "unbalanced and inadequate development and the people's ever-growing needs for a better life".

To do this, it needs to move toward a high-quality growth model and away from one dependent just on manufacturing exports and infrastructure investment.

For this, there needs to be a focus on continued supply-side reform, a reduction of excess capacity, particularly in State-owned enterprises, and a reduction of income and regional inequalities, as well as efforts to tackle pollution, improve the regulatory and administrative environment and ensure greater financial stability, including dealing with the issue of debt in the economy.

For some, such as Zhu Ning, Oceanwide professor of finance at Tsinghua University, it is no longer about chasing GDP numbers.

"The focus is now on the development of the overall economy. People have criticized China's growth about being all about growth's sake and not about development," he says.

To move to a high-quality growth model will be a significant challenge for China.

Economic growth is normally driven by a combination of labor and capital inputs. However, in China's case, the working population will decline faster than that of most major economies, because of the legacy impact of the former one-child policy. The economy will also become less capital-intensive, if rebalancing is to be achieved and debt levels are to be reduced.

According to Magnus, of the Oxford University China Centre and also author of Red Flags, a book on China's economy that is to be published later this year, the only option for China will be to increase the productivity of the economy, which he says will be a major challenge.

"Of all the areas of new era economic thinking, the focus on technology is probably the most important. This is where the improvements in productivity are likely to be generated," he says.

"You just cannot keep growing investment because you will end up with problems of overcapacity, overindebtedness and malinvestment."

One of the more important aspects of the new era is Xi's concept of globalization. Central to this is the Belt and Road Initiative, which was launched in 2013.

Xi said in his report to the national congress in October that it was about a vision of "shared growth" with the rest of the world.

At the Belt and Road Forum for International Cooperation in Beijing in May last year, it was emphasized that Belt and Road is not an instrument of China's foreign policy, but something that all nations can participate in.

Martin Jacques, author of When China Rules the World: The End of the Western World and the Birth of a New Global Order, says that many people underestimate the level of support there is for the Belt and Road, particularly in developing countries.

"There really is a lot of support for it. There is now also serious progress being made with the initiative. It has a symbolic significance and will have its own gravitational force over time."

One of the essential messages of the new era is winning the battle against poverty, which Xi has seen as a scourge since he was Party secretary 30 years ago of Ningde prefecture in Fujian province, where he implemented a series of poverty-reduction measures.

This is one of the reasons the new era has so much resonance in Africa, in particular, where 400 million people still live below the poverty line.

Hugh Peyman, a former head of Asian research for both Merrill Lynch and Dresdner Kleinwort Benson and author of the newly published China's Change: The Greatest Show on Earth, believes this could prove to be the lasting legacy of China's new era.

"Britain's legacy to the rest of the world was the concept of the rule of law," he says "The great American legacy was modern management systems, and the essential legacy of China's could be on how to handle laggard communities, what we now call the 'left behind' and now a phenomenon in the West again."

There was much discussion at the time of the national congress that China was offering a different model of political governance to the word as an alternative to Western liberal democracy. This has also had resonance in emerging economies, particularly those in Africa.

Jacques, the British author and academic and also a former editor of Marxism Today, believes it has opened a wider debate.

"There is a big crisis of government that has taken place in the West. The debate about China has shifted. The idea that China offered a different model of governance used to be dismissed. It is no longer dismissed. It is not yet that they want to copy China in the West, but that they now see the China system as a viable model and not one that is going to evolve into something else."

For Peyman, what is increasingly impressing people in the West is a governance system that sets longterm goals.

"China has a very long-term approach with goals now right up to the middle of the century. It has its own method, also putting the policies in place to achieve those goals, such as establishing pilot schemes and implementing them."

For some, China's new era has yet to have the same resonance outside of China that it clearly does within the country itself.

"People outside of China are waiting to see the ideas that underpin it and what will be the substantial parts of the new era from China's side that will affect them," says Rana Mitter, director of the Oxford University China Centre.

"Those outside of China are much more aware of the Belt and Road Initiative."

Brown believes that one of the most important aspects of the new era is that it gives China a new narrative.

"There is a pleasing symmetry. We have had 40 years of reform and opening-up, and now China is moving into its next phase with all the centenary goals and becoming a powerful modern country," he says.

"China needs a new theme music, and new era provides that."

For Jacques, it represents a society that is moving forward in contrast to the West, where incomes are stagnating and living standards are falling 10 years after the global financial crisis

"There is an important shift that has taken place in China as a result of the new era," he says.

"There is a new atmosphere, a certain exuberance, self-confidence and elan that you can see among the Chinese population that you no longer get in the West."

andrewmoody@chinadaily.com.cn

Fuxing trains on a production line in Tangshan, Hebei province. Fuxing trains were produced domestically and research is underway on even faster trains. Yang Shiyao / Xinhua

( China Daily Africa Weekly 05/25/2018 page1)