Today's Editorial

01 October 2016

China and the West



Source: By Arunabha Bagchi: The Statesman



The latest business news that is keeping commentators busy is the decision of the new British government to approve the construction of the nuclear power plant at Hinkley Point on the South-West coast of England. Although this colossal project with 21 billion Euros in investment is being undertaken by the French electricity giant EDF, one-third of that financing will be provided by the Chinese company, China General Electric (CGE). The Cameron government that envisaged a ‘golden age’ in economic relationship between the United Kingdom and China had already approved the project. Because of possible security implications, it was stalled at the last minute by the present Cabinet of Theresa May. Although this caused irritation in Beijing, the Chinese were confident that the May government would have to approve the project as it was in no position to make new enemies right after the Brexit vote.


The Chinese were clearly right in their judgment. China had already warned that any negative decision by the British government on the Hinkley Point project would endanger the promised ‘golden age’ between the two countries. It is not just about Chinese investment at Hinkley Point, but two other planned nuclear power projects, in Sizewell (Suffolk) and Bradwell (Essex). The most dramatic is the plan to set-up the nuclear power plant at Bradwell using the design and technology developed in China. If this goes through, and China would be putting all financial power to make that happen, the door would be wide open for Chinese-designed nuclear power plants to come up all over Europe. CGE, in a statement after the British government decision, expressed its willingness to provide safe, reliable and sustainable energy supplies throughout the country.


The United Kingdom followed the unbridled form of neo-liberalism for decades and did not bother about national interests so long as investment come flowing into the country. Brexit was the logical reaction to this policy by a large part of the population, as they felt bewildered by the strategy. As one crosses the North Sea, one encounters countries of Western Europe that are more circumspect about investment from potentially unfriendly countries. But attitudes change as we reach the investment starved Eastern and South-Eastern countries of Europe. China is planning to penetrate Europe from the other side by investing in those countries. The ostensible reason behind this policy is the plan of President Xi Jinping; General Secretary of the Communist Party of China, to build a new ‘Silk Road’, roughly along the old ‘Silk Road’ that connected China to Europe in the bygone days. It is billed as a pure infrastructure project to expand trade to an unprecedented level.


Although the basic project of building road and rail links through Central Asia are still on the drawing board, China is massively investing in the infrastructure of Belarus. This country is in the backyard of Russia and is part of the military and economic community led by Moscow. Belarus and Russia still talk from time to time to again merge into a new Federation.


Russia might be looking at the massive Chinese activities there with suspicion. It is also possible that this has Russia’s tacit blessing. It is, however, causing unease in the European Union. But Belarus is only the entry point for planned massive Chinese investment closer to the European heartland. The bonhomie between China and a group of 18 East European countries is intensifying at a rapid pace. President Xi has already held the fourth summit with this group at the end of last year in his hometown of Suzhou. The Western media has still to give much credence to these meetings, but the countries involved are hoping to reap massive benefits. China is paying and building a high-speed rail link between Belgrade and Budapest, is working on hydroelectric dams in Croatia and Poland, and is funding the expansion of a port in Lithuania. Its relationship with the Czech Republic is increasingly getting cosier. The Czech Republic, being the most technologically advanced of the East European countries, entertains the hope of being the entry point of China to the European Union.


As the German weekly, Der Spiegel, put it bluntly in a recent article, “But what is Beijing trying to achieve with its Silk Road plan? Does the Chinese leadership want to promote economic development in nearby and faraway countries and “bring together” the world, as it insists in its government propaganda? Is it because Chinese companies need globalization to bolster their stuttering economy and create new export routes for surplus production of goods, as well as routes for importing oil? Or is the real goal to break the West’s political dominance Rs a plan, in a sense, to conquer the world?”


The West should know. They used the same tactic to conquer the world and enslave a vast part of the globe during their colonial expansion. President Xi is also intent on developing the complementary ‘Maritime Silk Route’ through the disputed South China Sea, the Indian Ocean with ports in countries close to India, along the Arabian Sea with ports and roads already being built in Saudi Arabia and Israel, leading up to the Mediterranean. Chinese companies gained valuable experience of building and operating large ports, as China became the workshop for the whole world. Today, China exports goods worth more than $ 2 trillion to the world every year. Chinese companies are now using this experience to buy and build ports all along the proposed ‘Maritime Silk Route’. For Europe, challenges and opportunities are apparent as China eyes for buying a port in Greece and other countries in the South-East part of the region. There are clearly security implications, now or possibly in the future, with NATO activities in those countries.


Whenever the Chinese are directly challenged about their motives, they react with disarming humility. They maintain that they are still a developing country with many poor regions. They insist that their sole motive is economic, with trade of mutual benefit to both parties. They never claim to have any intention of being a superpower. They do not have to. They know that their increasing economic weight is propelling them to join the United States as the two superpowers in the not-too-distant future. They are so self-assured that they refrain from bragging about their future economic power and dominant role in the world. Selling hi-tech nuclear reactor design technology starting with Britain and building sophisticated ports and running them smoothly from the other side of Europe, China is demonstrating that she is no longer just a low-tech producer of cheap consumer products for the West, but is fast becoming competitive in the high technology fields as well.

This is, indeed, a commendable achievement. It should give us a pause and time to reflect on our lacklustre record on the technological front. Reading our English language newspapers, one gets the impression that, by providing the tech giants Google and Microsoft with Indian CEOs, we have somehow achieved great technological success. There is no serious discussion in Parliament on our relative technological backwardness. We seem to think that setting up more IITs would magically solve the problem. Best brains gravitate there, as an IIT degree is a licence to go to the West, preferably to the USA. This is also regarded as another indicator of our technological success. We are all eagerly waiting for some profound insights on this issue by our retired bureaucrats who prepared the latest New Education Policy (NEP) for the current government that is yet to see the light of the day.

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