The Rise of China – A Paradigm Shift

CapitaLand International Forum 2012 ponders the implication of an emerging China for the world

Issue: Dec 2012

China will be the new superpower taking over from the West as early as in two decades’ time, a point made at this year’s CapitaLand International Forum by keynote speaker Dr Martin Jacques
China will be the new superpower taking over from the West as early as in two decades’ time, a point made at this year’s CapitaLand International Forum by keynote speaker Dr Martin Jacques

Every year, CapitaLand brings together the best minds in the business world to dialogue, provide insights into trends and postulate possible scenarios for moving forward. This year’s CapitaLand International Forum 2012 focused on the topic “The Rise of China – A Paradigm Shift”, a particularly timely topic as it coincided with the election of China’s new 18th Communist Party of China (CPC) Central Committee. Some 300 guests from real estate, banking, finance and the academia along with CapitaLand staff attended the half-day forum. Another 10,000 CapitaLand employees watched the event via a live webcast.

The keynote speaker was Dr Martin Jacques, author of the global best-seller “When China Rules the World: Rise of the Middle Kingdom and End of the Western World”. A senior Visiting Fellow at IDEAS, a centre for diplomacy and grand strategy at the London School of Economics and a Visiting Professor at Tsinghua University, Beijing, Dr Jacques’ TED (Technology, Entertainment and Design) talk on understanding China has drawn almost 900,000 views.

On the choice of topic, Mr Ng Kee Choe, Chairman, CapitaLand Limited said, “Over the past 30 years, China’s awakening and emergence on the global stage has been nothing short of remarkable. With our businesses spanning many geographies, it is important for us to understand how we can successfully navigate this emerging world order and respond effectively to seize opportunities and meet challenges from this paradigm shift.”

China – A Growing Force

China’s economic achievements have been stellar since 2010 and it is set to do even better in the next 10 years
China’s economic achievements have been stellar since 2010 and it is set to do even better in the next 10 years

Dr Jacques began with an impressive list of China’s economic achievements vis-à-vis the West in recent decades. China has had one of the fastest Gross Domestic Product growth rate in the world. It became the top manufacturing nation by output in 2010, a position previously held by the US for 110 years; China will possibly be the world’s leading importer by 2014, with many of the world’s strongest companies by 2016; and, according to projections by Goldman Sachs, it will then have the largest stock exchanges in the world and the biggest market in the world.

“This is all happening at an extraordinary speed,” Dr Jacques warned. “It is not just about China catching up. It also marks the emergence of China as a greater shaper and architect of the global economy than the US. We are just beginning to see what a Chinese world economic order might look like.”

The most important feature of this economic rise is China’s extraordinary trading footprint which puts it as the largest trading partner of many countries, overtaking the US.

“This is the rise of a political, cultural and historical world that has been marginalised in the global world. In the past, there was only one kind of modernity, the Western modernity. We are so used to thinking in terms of Western paradigms. Now, we have to make sense of this new power,” Dr Jacques explained of the shift in paradigm.

China – A Civilisation State

He then proposed four ways to look at the shift. The first was that China is a civilisation state rather than a nation state.

“China is at least 4,000 years old. Their sense of identity is derived not like nations of the West from a sense of nation, but from a sense of civilisation,” Dr Jacques stated.

“It is a civilization state in three different senses: it is very old, its civilization and political boundaries have coincided, and it is demographically and geographically very vast.”

As a result of this, China’s most valuable political assets are its unity, order and stability. Being a civilization state also allows China to accommodate diversity such as the two systems within one country as evidenced in Hong Kong.

China – A New Global Power

The next way to look at the paradigm shift is to appreciate the fact that China is a very different kind of global power from the West.

“Although it had a universalist mentality, the way it worked in practice was very different. For Europe, universalism meant that they conquered, colonised and shaped the world to be like them. For China, their idea of universalism was the Middle Kingdom. They considered themselves the highest form of civilization so they saw no need to step out of it,” said Dr Jacques.

So, China will not employ the classical forms of expansion. Instead of military might, China will rely on economic power and cultural influence. There would be a shift towards a tributary system that China had in place in the past.

“The whole of East Asia is being re-engineered to become, once more as it was during the tributary system, to be China-centric,” he said. “The implication is going to be there is going to be a new inter-state system in Asia.”

China – A Country United

China may be large but it enjoys more homogeneity than many other big countries
China may be large but it enjoys more homogeneity than many other big countries

Thirdly, to understand China, look at how China has held together for so long. China may have a population of 1.3 billion but over 90 per cent of the Chinese think of themselves as one race. This is something not evident in other populous countries like India, Indonesia and Brazil.

“One reason for this is the concept of the civilisation state and China’s longevity. The other is the process of absorption and assimilation resulting in a deep pride in the Chinese cultural identity.”

The great advantage is that without the ethno cultural identity of the Han, it would have been impossible for China to remain standing for so long.

China – Its Changing Politics

Dr Jacques’ fourth building block to understanding China is through the concept of the state.

“The Chinese have a profound belief in the state,” he maintained. “In the eyes of the Chinese, the state’s role is to preserve Chinese civilization and unity. The West thinks the government is necessary but treats the state with a certain degree of distance, even suspicion. The Chinese views the state as not just a member of the family but the head of the family.”

The Chinese state, then, is not a source of weakness but one of its greatest strengths. Dr Jacques concluded by saying, “The West used to see itself as a model for everyone. The rise of China is changing all that. Will the West have the humility to learn from China?”

The China Debate

(Left to right) Discussing China are Dr Martin Jacques, keynote speaker; Mr Liew Mun Leong, President and CEO, CapitaLand Group; Professor Wang Gungwu, Chairman, East Asian Institute, National University of Singapore; Professor Tan Kong Yam, Professor of Economics, School of Humanities and Social Sciences, Nanyang Technological University; and Professor Huang Jing, Director, Centre on Asia and Globalisation, Lee Kuan Yew School of Public Policy (with Dr Frank Gong, Managing Director, Chairman, China Diversified Industry Clients and Vice Chairman, China Investment Banking, J. P, Morgan Securities (Asia Pacific Limited who is not in the picture)
(Left to right) Discussing China are Dr Martin Jacques, keynote speaker; Mr Liew Mun Leong, President and CEO, CapitaLand Group; Professor Wang Gungwu, Chairman, East Asian Institute, National University of Singapore; Professor Tan Kong Yam, Professor of Economics, School of Humanities and Social Sciences, Nanyang Technological University; and Professor Huang Jing, Director, Centre on Asia and Globalisation, Lee Kuan Yew School of Public Policy (with Dr Frank Gong, Managing Director, Chairman, China Diversified Industry Clients and Vice Chairman, China Investment Banking, J. P, Morgan Securities (Asia Pacific Limited who is not in the picture)

Five panelists joined the esteemed speaker for a panel discussion that followed.

Professor Tan provided a different perspective to Dr Jacques’ “straight-line projection” of the might of China. He cautioned that China has accumulated 30 years of “social tension and polarisation, endemic corruption, poor governance” that have weakened the system.

Professor Wang felt that the real paradigm shift was China’s ability to make the state work within a capitalist system.

“If they succeed, we really have to rethink a lot of the fundamental principles that have guided us in the past few decades in Asia.”

Mr Liew professed to have always been bullish about China.

“Every generation of Chinese leaders has been better than its predecessor. They are more careful and structured. I have full confidence that China can continue in the momentum if they choose the right leaders,” he said.

Professor Huang questioned the viability of a single party rule and China’s ability to distribute wealth equitably, contending with Dr Jacques’ perspective of China as a civilization state.

To Professor Huang, China’s challenge is to manage a population that now demands increasing political participation, though he is sanguine that China will be able to rise to the challenge.

Dr Gong was equally upbeat, “If China can achieve eight per cent nominal growth, they can be the world’s largest economy in seven to eight years. The key is reform.”

Bian Shangzhi, Project Design, Development & Management, CapitaMalls Asia who hails from Eastern China said, “Professor Tan’s comment that China is now searching for her soul particularly resonates with me because that is exactly how I feel about my country. And I agree with Dr Jacques that China is rising though the timeline of 10 to 20 years.”

How soon, how far-reaching and how permanent China’s impact on the world will be may be up for debate, but that it is a rising force to be reckoned with was a conclusion everyone agreed on.

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