It is with my usual irony that I include myself alongside the name of one of the great political thinkers of our age, Henry Kissinger. As I mentioned in a previous post, Kissinger appears to be in favour of a nuanced relationship with the 'new' China. The reviewer of his recent book, On China, Gordon Chang (of whom I had never heard but who by coincidence I saw interviewed on Fox News yesterday) was dismissive of such an approach and called for trenchant opposition. A timely article in the WSJ explains why that sort of muscular diplomacy will not be helpful.
The report confirms other indications that there is a power struggle going on in China between (and I use these terms very loosely) the 'Mao-ists' and the 'modernisers'. The former yearn for a return to absolute Party rule in the Mao-ist style. My two earlier posts, here and here, on the sacking of a senior member of the ruling Polit-Bureau, Bo Xilai, a 'Mao-ist' by inclination, might well have been part of this struggle between the two factions. Last week, in a further indication of movement within the supposed monolith, the outgoing prime minister, Wen Jiabao, called for a major shake-up[ in the system governing the four major, state-owned and controlled banks. According to the WSJ report:
"Let me be frank. Our banks earn profit too easily. Why? Because a small number of large banks have a monopoly," said Mr. Wen, according to the transcript of the program on the broadcaster's website. "To break the monopoly, we must allow private capital to flow into the finance sector."
Mr. Wen's comments tap into a rich vein of popular anger against China's biggest banks that has been building in recent months online and in the media.
The backlash was initially prompted by frustration at what has been perceived as banks' payments of low interest rates on deposits and indiscriminate levying of fees. It has worsened in recent weeks as lenders posted record profits, even as the economy slows and some companies struggle to access credit.
Needless to say, the words "private capital" are obscenities to the 'Mao-ists'. But as always, 'economics rule OK' and the more perceptive in the Chinese government, to say nothing of the millions of private businessmen, realise that the old model is stuttering and that change is needed:
The country's economic expansion is set to slow in coming years after racing ahead at a torrid pace over the past decade, raising questions over whether China can switch from a model based on exports and investment to one that relies more on a rising consumer culture.
That has led to a nationwide conversation over China's tight grip on its financial system, which favors big state-owned firms but has been criticized by economists and even some reformers in China for impeding more balanced growth.
Many in China now believe a crisis will come without economic reform.
I would also remind you of an even earlier post on this blog (my God, what a mine of information it is, you lucky people!) when I reminded you that a new president is due to take over shortly. He, Mr. Xi Jinping, is one of those new 'international' Chinese, that is, a man who is an entirely patriotic Chinaman but one who has lived and studied abroad, in his case, America. On his recent low-key visit he made a point of returning to the American family who housed him in his student days. This man is a quiet 'moderniser' who has slowly but surely built his political base and has now risen, apparently effortlessly, to the very top. There are others like him, I am sure, but it is difficult for outsiders to identify them. Equally, I am absolutely certain that there are a considerable number in the 'Mao-ist' opposition. Not least, of course, the Chinese army. One must always be surprised at any signs of political intelligence in any army at any time because of its rarity. The Chinese army is now more powerful than at any time in its history and like soldiers everywhere they will be eager for battles in which they can prove themselves and win laurels.
Given that situation you can see the wisdom of Kissinger's nuanced approach. Yes, there may be a need 'to draw lines in the sand' but considerable thought needs to be applied as to exactly where and how deep they are drawn! This will require the application of a prolonged and steady American diplomatic campaign backed by the very best and shrewdest thinkers on grand geo-strategy that they possess. Are there any? I don't know. Time alone will tell.
Should you harbor any doubts David, check with Malcolm to see if I hadn't mentioned something along Henry K's line of thought some years before. Of course that Obama fellow hadn't yet occupied 1600 Pennsylvania Avenue and I was considering Chinese mineral rights purchases in Afghanistan. Don't bother attempting "behind-the-scenes" emails 'cause I've yet to finish up with the details of my computer system.
'Course ol' JK can barely constrain himself argueing minutia with the imminent Sir Duff of the Esteemed D&N!
Posted by: JK | Friday, 06 April 2012 at 19:19
testing
Posted by: David Duff | Saturday, 07 April 2012 at 14:12
Just what in tarnation kinda arguing is "testing" David?
Did she take your knighthood away again?
Posted by: JK | Saturday, 07 April 2012 at 14:58
JK, see the post above for an explanation.
And given the sort of people who are knighted these days, I wouldn't accept a knighthood if they paid me! (Still, it would be nice to be asked!)
Posted by: David Duff | Saturday, 07 April 2012 at 15:06
My houseboy was "knighted" or something on Australia Day this year and got pretty uppity for a while but after I made him clean out the crocodile pond, he's reverted to docile servitude.
I, however, have received no word so far of my impending Damehood. If it's good enough for my friend Edna, it's good enough for me.
c.c. Buck. pal.
Posted by: Andra | Saturday, 07 April 2012 at 23:18
Awww shucks Andra, twarn't nuthin.
Posted by: JK | Sunday, 08 April 2012 at 01:12
'Dame Andra'! Yes, yes, it has a certain ring to it . . .
Posted by: David Duff | Sunday, 08 April 2012 at 09:32