"Because of this general connection between political freedom and freedom of thought, philosophy only appears in history where and to the extent that free constitutions are created".
"Tien (Heaven) does not rule nature, but the emperor rules everything and only he is connected with Tien".
Hegel, Lessons in the Philosophy of Religion
China's resurgence is a well-known fact. Three facts suffice to illustrate it: the Asian giant accounts for 16.51 trillion trillion dollars of the world economy, it is the recipient of 351 trillion dollars of EU exports and in terms of purchasing power parity it is already the world's largest economy. However, China is not just another state on the international stage; and this is not only because of its population - at 1.4 billion, it is the most populous nation on the planet - but also because of the specificities of its political and economic model; China is also the largest dictatorship on the planet. There is no political freedom. Since 1949, the Chinese Communist Party (CCP) has implemented a one-party regime in which the CCP is fully intertwined with the state in order to exercise its dominance over the entire social sphere. And while it is true that China has adopted liberalising measures in the economic sphere since 1978, a very important caveat must be stressed: China is not, and does not want to be, a fully free market system; it only uses limited levels of free markets to achieve its own political ends.
Record growth, without known historical precedent
The economic expansion - and concomitant prosperity - that the former Middle Kingdom has experienced over the last decades has been dazzling; in the first decade of the 21st century it maintained sustained annual growth rates of over 10%, a record for which there is no world historical precedent. In 2018 only grew to 6.6%. For the moment, this success, far from weakening the one-party model, has served to legitimise it. Few things justify a government more than economic triumph, especially in a country that in its 5,000 years of history - another record: it is possibly the longest-lived nation on the planet today - has always been ruled autocratically, except for a brief - and disastrous - republican period (from 1912 to 1949).
In China, most of the international standards commonly used in the West do not apply; we are referring to the lack of implementation of laws that ensure human rights or social security systems that guarantee the working conditions of its workers. Nor does it show respect for intellectual property; it copies from the West without qualms whatever offers greater value to its products, be it at the technological, business, financial or military level.
Less well known is the fact that there are really no private companies in China. In one way or another, they are all controlled or intervened by the Party-state. Firms often have no shareholders, even if this status is nominally attributed to their employees - such is the case with Huawei-. The Chinese system also stipulates by law that a company with three or more employees must have a CCP cell. Therefore, 73% of Chinese companies have at least one such cell. AlibabaThe CCP, for example, hosts around 200 such cells, and seven thousand of its workers are CCP militants. One final factor to take into account is the opacity of its corporate financing - the opposite of Western companies, which are obliged to comply with transparency standards.
Having outlined China's economic model, what are the strategic interests that drive Beijing's foreign relations? They do not, of course, include the usual coordinates of a Western state. China seeks first and foremost to strengthen the competitiveness of its domestic production and, at the same time, to penetrate Western economic structures, including, but not limited to, their markets.
To achieve these two distinct objectives, the Beijing government has developed a dual pattern of foreign investment. In those countries that are not members of the OECD, the relationship is extractive; in other words, it captures the energy resources and raw materials that are key to their national industrial development. In contrast, with the more developed countries, the link is one of exchange and absorption; in this case, Chinese companies invest capital and establish relations with the more developed areas in order to acquire technology, brands, management capacity and influence in key strategic sectors. In this way, in addition to opening up markets, the ascendancy of the Chinese economy over the West tends to be greater.
Geopolitical design with global reach
To achieve these two objectives, China has launched a geopolitical programme of global scope over the last ten years, the ambition of which is unprecedented. New Silk Road (NRS), a project that connects the Asian giant with the rest of the globe through a huge network of ports, roads, airports and railways; of course, also through 5G and future 6G networks. The total budget of the NRS exceeds 800 billion euros.
This is a global plan, led by the Chinese government and the CCP; the Board for the Advancement and Development of the NRS is headed by the Chinese vice-president, the entire project is financed by state-owned banks and its investment parameter is not, as we have pointed out, based on free trade criteria, but on national interests. Let us see what they are.
Firstly, Beijing seeks a network of infrastructures that will guarantee connectivity between the whole of Eurasia and Africa and China and, in turn, allow it a better projection towards the Americas. Secondly, it will do everything in its power to guarantee energy and raw material supplies as efficiently as possible, i.e. by controlling supply routes. Its third objective is to make its exports of capital, services and goods as easy as possible. Fourth and finally, the Chinese government is trying to influence international law to create customs and trade rules that are more favourable to it.
The system consists of two geographic routes, plus a projection into cyberspace. On the terrestrial level, it advances from China through Central Asia and Eurasia to Spain; and on the maritime level, it opens up to both the Pacific Ocean and the South China Sea. On the digital front, the expansion of the 5G network and, above all, of the future 6G network - on which China is already working to commercialise by 2030 -, together with its smartphones The low-cost, low-cost technologies are an excellent channel both for Artificial Intelligence applications and for eventual public or private interference.
On this basis, the excellent location of the Iberian Peninsula means that China shows a special geopolitical interest in Spain. Spain occupies, as is well known, the intersection between the Atlantic west, which connects with the Americas, and the Mediterranean east, open towards Suez and the Indo-Pacific area; between the north, which points towards the major European ports, and the south, which looks towards Africa from the Iberian Peninsula and the Canary Islands. Spain would, in short, be an excellent distribution platform for Chinese goods, both because of the geographical situation described above and because of the positive political relations we have with the rest of Europe, the US, Latin America and the African continent.
The Chinese government is seeking control, through investment, of the aforementioned north-south and east-west routes through China. The seriousness of the project is confirmed by its acquisition - in whole or in part - of at least 40 ports around the world, including its strong presence in the ports of Barcelona and Valencia and its attempt to take control of the port of Algeciras. There is more. In 2018 alone, Chinese companies invested more than €1 billion in Spain, when the previous year, in 2017, the figure was €390 million.
In parallel, Beijing has developed its strategy in the Spanish telecommunications arena. Media factors, such as the Alibaba in Madrid, are the manifestation of much deeper realities; for instance, that Huawei y ZTE are already leading companies in our country with a magnificent position in the 5G market. The activities of Chinese companies in Spain have been carried out in compliance with all the parameters of our legal system.
As for direct participation in the NRS, Spain has so far maintained a cautious attitude. Despite the intense demands of President Xi Jinping during his last official visit in November 2017, Spain did not sign up to this new NRS. Silk Road.
For its part, the European Union, having overcome initial enthusiasm, is increasingly sceptical about the whole NRS project. In this case, the precedent has been set by Germany, a state whose economic standards are otherwise markedly favourable to free trade. However, in December 2018 it tightened its national laws to prevent non-European companies from acquiring substantial assets from German firms. Although it was not cited in these new regulations, China's name was on everyone's mind.
Germany's attitude was an encouragement for the joint communication issued in March 2019 by the European Parliament, the Council and the Commission. In this communication, the EU notes, first, that its own relationship with China moves simultaneously in different spheres, ranging from cordial cooperation and respectful negotiation to economic competition and systemic rivalry. Recognising this reality, the European Parliament has urged the Commission and member states to take measures to ensure security in the face of China's technological presence in the EU, which is perceived as a growing threat. At the same time, the Commission, for its part, has chosen not to join the NRS, as it considers the EU's specific strategy for connecting Europe and Asia, which already includes a EU-China Connectivity Platformdesigned under principles of transparency and reciprocity. Moreover, only in this way does the Union's financial, economic and political autonomy seem to be guaranteed.
As for the US, the current Trump administration maintains a highly critical approach towards China. With moments of tension and détente, the two countries are locked in a bitter trade war. Chinese investments in the US have dropped drastically - from $45 billion in 2016 to $5 billion in 2018 -, the main US intelligence agencies - CIA, FBI, NSA, etc. - have strongly discouraged the use of Chinese mobile phones, and a Presidential Order from Donald Trump himself has directly banned the use of telecommunications equipment from Chinese companies by public institutions on US soil.
Allow me to recapitulate the scenario described so far. In the case of China we are dealing with an exceptional country; it has a millenary culture and a huge workforce, which for very low wages - by Western standards - achieves very high levels of productivity; a country that does not respect many international regulations and whose state intervenes forcefully in all areas of life, public and private. As much as we may dislike the theoretical framework of its system, the practical achievements of the Chinese government should not be underestimated either. This tutored economic openness in certain areas of its immense territory - we are also talking about the third largest country in the world, after Russia and Canada - has lifted 700 million of its nationals out of extreme poverty in one generation and created a middle class of more than 300 million people.
Subverting liberalism using liberal logic
Does Chinese expansion affect Spanish security and interests? The answer to this question is yes; and it should be added that it does so in several ways. Our trade balance shows an increase in imports from China that is much higher than Spanish exports to this country. This Spanish trade deficit amounted to 20,632 million euros in 2018, 3.8% more than in 2017. The same is true at the European level; the EU's trade deficit with China in 2018 was 185 billion euros.
As we have already indicated, all Chinese exporting companies are either state-owned or heavily subsidised by the state. Spanish companies therefore compete at a clear disadvantage compared to Chinese companies in their own domestic market. To this must be added the fact that the opening up of the immense Chinese domestic market, if it takes place at all, is happening at an unusually slow pace. Given this scenario, it is logical that both Spain and the EU maintain a trade deficit vis-à-vis the Asian giant. Unless the playing field is changed, there is no reason to believe that the current trade scenario will improve in the future.
That said, it is worth focusing attention on one specific factor: China's international expansion is not merely an economic and financial project. As noted at the beginning of this article, China does not at any point aim to become a full free market system; its narrow acceptance of aspects of economic freedom is always subordinated to its political aims, of which the NRS is the spearhead. Summarised succinctly, and using Marxist terminology, we might note that China seeks to progressively penetrate the economic infrastructures of open economies in order to align their respective political superstructures with the interests of the Chinese state. Beijing does not crave the principles of liberal democracy. With its tutelary state capitalism it seeks to reinforce its autocratic and nationalist one-party model while extending its power over Eurasia as a whole.
The key to China's strategy, which combines economic, political, diplomatic and military derivatives, is to enter international markets in order to, in a second phase, control some of its key economic structures. They can do this because the Chinese executive has a huge amount of liquidity at its disposal. The plan follows a sequential development: promote economic exchanges, build and/or control infrastructures under its domination to facilitate such exchanges, and encourage massive investments in strategic sectors. Once a position of strength has been acquired, diplomatic and political pressures begin to be exerted to influence the decision-making capacity of states to the benefit of the Chinese autocracy. In short, subverting the dynamics of liberalism using liberal logic itself.
The NRS is now the flagship instrument of a regime that has implemented this sophisticated economic and political strategy. The budget of more than 800 billion euros acts as a new 21st century Marshall Plan, only in this case, unlike the original, it prefers to scrap the post-World War II Liberal Order in favour of a scheme in which China and its authoritarian model play a greater role.
In pursuing this strategy, there is a powerful reality that works in China's favour: most of the world's countries are developing, they need investment, and China can act as a major global lender. The expansionary potential of the NRS is therefore very high.
Surprisingly, today's China is doing nothing more than reproducing on a global scale and in the midst of the Contemporary Age its traditional synocentric conception of relations between the former Empire of the Centre and its peripheries, subjected to the condition of tributary states. Within this logic of domination, it is always easier to obtain obedience from an autocratic model, where conformist local oligarchies are indebted to the interests of the colonial Empire, than from a free and fully-fledged democracy, where power is shared and controlled.
Russia, for its part, is watching this process with a certain sympathy for Chinese interests; not surprisingly, given that the current regimes in both countries share an aversion to democracy based on universal principles. Indeed, Moscow has aligned itself with Beijing in its effort to push for the Polar Silk Road -one of many NRS routes. It crosses eastern Siberia to reach the seas of the North Pole and thus, through the Arctic ice, to reach North America and western Europe more quickly.
Russia's alliance with China, which goes beyond the economic sphere, could also extend into the military sphere, as we saw during the Vostok-2018 manoeuvres. Indeed, in 2018, in eastern Siberia, and at a time of high tension with NATO, Russia deployed 300,000 soldiers, 36,000 tanks and armoured vehicles, more than 1,000 aircraft and 80 warships. It was one of the most impressive military exercises in recorded history. Vostok, Russian for "east". The novelty was that China participated in these exercises with 3,200 soldiers, plus armoured vehicles and aircraft. Mongolia, for its part, entered with some military units.
The (Centre) Empire Strikes Back
Today's China is not Mao's China. It is not the messianism of an ideology - Marxism-Leninism - which only during the Great Leap Forward and the Cultural Revolution killed 10 to 20 million people and left the country much more impoverished, both economically and intellectually. The goals of the People's Republic of China in the 21st century are economic growth, which, as we have indicated, is already benefiting very large sections of the population, and the re-emergence as a major world power.
At this point, a brief historical aside is useful. China, throughout its millennia of history, has always been the dominant nation in Asia, although in its case, Huntington points out, it would be better to speak of a civilisation rather than a country. Only during its long Century of Humiliation (1839-1945) China lost this position to Western, Russian and Japanese imperialism and is now trying to regain it. Since 1949, a CCP that is as Marxist as it is nationalist has been working on this mission.
Consequently, the post-World War II world order is not comfortable for China for three different reasons: it is led by the United States, not by China; it is centred in the West, not in Asia; and its paradigm is liberal democracy, not one-party authoritarianism, which with its economic success seeks a new legitimacy: that of being a kind of 21st century enlightened despotism. Hence his interest in putting an end to the current balances. To this end, it masterfully employs not only the traditional economic, political and military instruments of any great power, but also geo-economics.
José María Aznar in his latest book, The future is today (2018) notes that Chinese geo-economics combines a plethora of methods - commercial, financial, sanctions policies, cyber-attacks, investments, etc. - to achieve geopolitical ends. This geo-economic strategy is in line with the classical Chinese mindset, in which the ultimate excellence, Sun Tzu argued, is not to win every battle, but to defeat the enemy without fighting. Henry Kissinger explains this view: victory is not the triumph of the military, but the achievement of political objectives, which in this case include China's global geo-economic expansion, and also the demonstration that the economy and the World Order can function without liberal democracy.
Since 2010, Beijing has invested at least 145 billion euros in Europe. Its presence in key infrastructures, energy and electricity grids, high-speed trains and ports, with no European correspondence on Chinese territory, only generates dependence on a giant power with a neo-colonial attitude, which also promotes alternative models of governance on a global scale.
The caution of the Commission and some EU member states towards Chinese investment is therefore pertinent and in line with Spain's relatively cautious policy. However, the neo-colonial expansionism of the former Middle Kingdom, coupled with the isolationist attitude of the current US administration, would require an in-depth analysis and a precise public-private strategy, which are not currently on the agenda for debate in Spanish public opinion.
That said, the connection with China is not negative as such. On the contrary, it is positive, but not through the NRS, but on transparent and secure rails, including the aforementioned EU-China Connectivity Platformwhich does take WTO rules into account. Spain, like the rest of the European countries, while supporting China's take-off, believes that all political mechanisms must be used to ensure that China really opens up to international rules.
Spain appreciates all that Beijing has achieved through its own efforts, but considers that its international projection should take place under reciprocal conditions. In this way, the presence of Spanish companies in China could provide purchasing percentages similar to those of Chinese companies in the Spanish market. This is basically a question that not only concerns the West's commercial interests, but also the Chinese society's own commitment to prosperity in freedom. However, the Chinese domestic market continues to be subject to tariff barriers or measures with equivalent effect that close it off. Great Wall 17.5% of the world's population lives there.
In conclusion, the non-signing of the NRS is necessary for Spain, but insufficient. For reasons of national security and market freedom, it would be necessary to follow the recommendations of the European Commission to guarantee control of our own structures and services - both physical and digital - given that Chinese companies not only have an economic but also a political objective.
It seems reasonable to set limits on the presence in our country of ambitions that are distant from our society and which, in the medium and long term, we could find clearly at odds with the general interest of this same society and of Spain as a nation.
This article, under the title ReThe Western world's relations with China: trading partner, economic competitor, systemic rivalwas originally published in the 64th issue (October-November 2019) of the journal Cuadernos de Pensamiento Políticopublished by the FAES Foundation.
José Ramón Barros Cabalar
Journalist and communications consultant