Civilisational Repositioning: China’s Rise and the Future of the Arab People (written by Samer Khair Ahmad)

Civilisational Repositioning

Civilisational RepositioningChina’s Rise and the Future of the

Arab People

Samer Khair Ahmad

Translated by:

Xinlu Liu and Aisling Dunne

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Contents

Introduction The Arab Crisis of Civilisation 1 — Western Obstructions and Eastern Openness

1 The Foundation of the Arab Renaissance 3

2 The European Colonization and the Reaction of Arab People: Two Factors which delayed the Arab Renaissance 7

The Arab Age of Colonisation 7

Ideological Changes 10

3 Western Obstructions and Eastern Openness 15

Part One The Arab and Chinese ‘Non-Conformist’ Rise 19

1 ‘Non-Conformist’ — The Foundations of China’s Rise 21

The Beginnings of New China’s Rise 21

Finding the Right Path Following the Cultural Revolution 24

Towards a Revival 26

‘One Nation, Two Systems’ 30

Socialism with Chinese Characteristics 32

Development and Adjustment 35

The Future for the Chinese 38

The Pace of Political Reform 40

Balanced Development of the Military and Economy 42

China’s Non-Conformist Development 44

2 Lessons Arab people might learn from China’s ‘Non-Conformist’ Development 49

The Scope of Reference 49

The Arab World’s ‘Development of Dependence’ Predicament 52

China’s Experience 56

Factors Referenced 59

From ‘Non-Conformist’ Development to a ‘Non-Conformist’ Rise 63

Part Two Civilisational Repositioning and the Future of the Arab People 65

1 What does ‘Civilisational Repositioning’ actually mean? 67

2 China acting as a possible example for Arab undertaking of Civilisational Repositioning 71

The Mao Zedong Era for China and the World 71

Adjustments to China’s Foreign Policy 73

Pragmatic Diplomatic Policy 75

The Positive Achievements of the Reform and Opening Up Policy 78

‘Civilisational Repositioning’ on China’s Terms 86

3 Civilisational Repositioning – Factors for Arab People to take into Consideration 89

What does the Arab World have? 89

The Arab World, China and the Future 93

Epilogue 101

Appendix 1: China’s Reform and Opening Up Policy – A 30 year Chronicle (1978–2008) 105

Appendix 2: Deng Xiaoping’s South China Tour 113

Appendix 3: ‘China’s Road to Peaceful Development’ White Paper 117

vi Civilisational Repositioning

Preface

This book aims to confront the decades-overdue Arab revival through a ‘criticism of civilisation’, which is composed of two parts:

Firstly, researching others and identifying our commonalities is the making of success. Secondly, so as to prepare for the future decades of global development, finding a way to overcome our present obstructions will enable a long awaited revival.

This book was conceived one evening in July 2007, when I and a number of friends from various Arab states had just returned to Beijing from a trip to southern China. As we rambled on a street corner, we asked ourselves: ‘Why has China risen so suddenly, whilst in spite of our potential and resources, we have failed to realise such a revival? Is it because we lack the ability to formulate plans? Because we can’t put theory onto practice? Or is it because we haven’t elaborated as to how to realise such a revival and come up with specific action plan?’

In my opinion, researching China’s rise has become a very urgent and important issue, especially as we, Arab people, are paying little attention to the East and conduct research with a mainly Western orientation. The West uses armed force against us, and then pressures us to follow them. We resemble the words of Ibn Khaldun: ‘The conquered is a faithful imitation of the conqueror.’

In our opinion, there is also an extremely critical question. If balance of power in the future is moving from west to east, then a certain balance will be formed. What will our situation be in the world? Will there be a repeat performance of our history with the US in our cooperation with China? To face China as their position on the world stage rises, and to face the passion and pride of Chinese people, our own countries require preparation. Should China serve the function of resolving our many complex problems, and improve our potential for emergence?

We must mention an incident when a Chinese official presented our Palestinian friend with a book which discussed the second Palestinian insurgence: ‘China understands the problems in Palestine, and supports the legitimate rights of Palestinians.’ When I heard those words, I became even more determined that this question was critical.

From these two questions (China’s success, and China’s future), this book proposes that Arab people should pay attention to the following two aspects when looking at China’s rise:

Firstly, researching China’s rise by looking at the philosophical foundations of their successful processes can provide direction for Arab people planning their revival. This book believes that the philosophy of China and the Arab states in the first half of the 19th century both sought out paths to a renaissance, but used different philosophical approaches to produce equally satisfactory results. China’s rise was established on a foundation of development. By virtue of being ‘non-conformist’, it has continuously modified and adjusted its path to revival.

Secondly, by establishing a close-knit community of interests with China, its impact on the world stage in the future enables the country to cast off the outside world which has obstructed an Arab revival for some time. China’s help in the present and future, especially with regards to material construction and modern technology will enable our personal development.

This book proposes the idea of civilisational repositioning under specific conditions. If one party’s civilisation lags behind another, their support and power can help the follower go on and advance. This book believes that due to a number of objective factors, this idea can be realized if the Arab world has a relationship with China. It stresses that the Arab people at present are falling apart, and are not prepared for this sort of approach. In truth, China has already accomplished a sudden rise, but a solid foundation has been established for this type of relationship in the future. China may be well prepared, but this means that Arab people must also be ready to proceed.

Finally, the reader may find that China has been embraced with great enthusiasm. It must be noted however tha this enthusiasm does not stem from any kind of sentimental contact with China, or disgust with the two world orders. China’s rise has provided an example that enables Arab people to resolve their various long-term problems. Fundamentally, this book opposes any material or spiritual dependency, so there is only one reason why there should be global recognition for such enthusiasm: China has made it, and their success is worth our admiration and attention.

viii Civilisational Repositioning

Introduction: The Arab Crisis of Civilisation

— Western Obstructions and Eastern Openness

1

The Foundation of the Arab Renaissance

The ideological and technological aspects of Europe’s revival lead to an unrelenting expansion of foreign markets and global trade from which they profited. Until the late 18th century, Arab countries had gradually regressed into markets for selling manufactured goods and raw materials to Europe. Meanwhile, European countries were rapidly expanding their military might due to unrelenting conflict, the most significant being a war between Britain and France from 1792 to 1815. This war over land and sea fanned the flames in a number of regions across the world. Napoleon conquered Egypt in 1798, recaptured by Britain three years later. According to historians, Napoleon’s conquest can be seen as the point at which Arab people turned their attention towards the European revival as an example to follow.

Once France withdrew from Egypt in 1805, a dynasty set up by Muhammad Ali Pasha al-Mas’ud ibn Agha was devoted to establishing a developed, modern state. He reformed the military by organising a system more in line with European models in terms of training, compulsory military service, the promotion of literacy amongst soldiers, and modernisation of weaponry. By 1839, the Egyptian Army had already exceeded 150,000 in number. With regards to society, he established a large number of schools, hospitals, factories, and printers in pursuit of societal and state administrative institutional reform. He established a land tax for agricultural workers used to provide religious scholars and elders with a salary, to construct a highway connecting the Suez Canal with Alexandria, and to establish a shipping company towards the development of foreign trade.

Muhammad Ali’s reign lay at the root of reforms in pursuit of European aspirations. However, the realisation that as part of The Ottoman Empire, Egypt was seen as being subordinate to Europe created a chasm. From then on, Muhammad Ali devoted himself to a more individual course.

The great importance Mohammed Ali attached to Europe led him to send large numbers of students there, and to France in particular, to study medicine, the military, humanities, art, and foreign languages, with the view that students would return and participate in the nation’s development and construction. This measure

4 Civilisational Repositioning

speaks volumes as to the extraordinary value he placed on education, even though he was himself illiterate.

Although every state system and institution underwent some reform, Mohammad Ali’s most significant contribution to Egypt’s revival were security mechanisms. Without question, Ali is still seen as an ideologist and educator, the originator of an ideological and theoretical foundation which contributed to Egypt’s revitalization. There were certainly other ideologists who contributed, such as Rifa’a al-Tahtawi, recognised as the most important and enlightened thinker of the Arab renaissance.

Tahtawi was one of a number of religious scholars at the Al-Azhar Mosque. In 1826, his teacher Hassan El-Attar recommended that he hold the post of school chaplain for an international student delegation to France. Tahtawi lived in Paris from 1926 to 1931, and in that time came to fully understand the rejuvination of a number of fields such as technology, ideology, and society. He studied the principles, consistencies and inconsistencies of Islam, and then drew a conclusion: France’s societal and political mechanisms are a product of their own revolution, and run counter to the teachings of Islam. Their implementation would completely change the Muslim form.

Tahtawi greatly appreciated the French philosopher Rousseau, and believed his ideology could correspond to Islam. For example, Rousseau believed that a healthy society ought to be just and well-governed. People should serve as members, and realize their potential within society. Tahtawi took up this point, and added that people should also participate in national governance, and that the law ought to be adjusted continuously in accordance with societal change. These viewpoints are all recorded in his book. When in Paris, Tahtawi also adopted the ideologies of ‘Nation State’ and ‘patriotism’, believing ‘patriotism’ to be an excellent foundation for all government.

When living in Paris, Tahtawi saw for himself what he believed were the positive influences generated from these specific practices in French Society. He felt that the French were devoted to work, knowledge, and family whilst attaching great importance to honour and principle without being confined to minor issues. Certainly, he could also see their shortcomings; they had no direct connection with nation building, some people were prone to meanness, and some too lustful.

Tahtawi greatly appreciated the positive factors which brought about the French Renaissance, and it could be said that his time in Paris was the most important in his life. All he saw and heard had a massive influence on the formation of his ideology.

In 1831, Tahtawi returned to Egypt, and carried out translation work at a School of Language founded by Mohammed Ali. As an ideologist, Tahtawi actively put forward ideas for the nation’s revival, and took his findings and recordings from Paris to write and publish the book A Paris Profile in 1834.

A Paris Profile is said to be the first modern text relating to ideologies for an Arab renaissance. It stated, ‘It is reasonable to reference French ideology’, as a foundation, and that ‘in truth it deserves to be followed’. Hence, it can be said that

the theoretical foundation for the Arab renaissance were the societal and political mechanisms Tatami ‘brought back’ from France, of which there are two parts:

Part 1. ‘Individual Freedom’ within the social system: Tahtawi firstly referenced the term ‘individual freedom’ in Arabic culture and pointed out: ‘Within the legal system, all French people have a share of individual freedom’.

Part 2. ‘Citizenship’ within the political system. Tahtawi believed that for the building of a state, a strong collective foundation is required with all citizens enjoying an equal foundation in terms of rights and duties so as to contribute to the state.

Tahtawi brought back his experiences from France so as to reform society and effectively revive the state. It is worth emphasising firstly that France’s Enlightenment ideology in the initial stages of the Arab renaissance (which Tahtawi represented) had an enormous influence on Arab people. Secondly, that at the time of the Arab renaissance, Europe was not seen as a danger to be guarded against, but rather as an example to be followed.

Certainly, the importance placed on France’s Enlightenment ideology was not rooted in an obsession with France itself, but in Muslim pursuit of self-interest towards social progress. Tahtawi took reference from the achievements of French ideology on the condition that ‘Islamic Law mustn’t be violated’, especially on a ‘metaphysical’ level, as it would present Muslim’s with the wrong path.

From this originated the beginnings of the Arab renaissance when Tahtawi as well as other thinkers’ explored theories of ‘truth’ wherever they could be found. They freely appreciated others’ successes, and made great efforts to assimilate positive aspects. Meanwhile, Mohammed Ali similarly absorbed the experiences of those who had studied in Europe, with the intention of realizing a strong and prosperous state. Throughout this process, Tahtawi’s writing was highly valued by Mohammed Ali, leading him to be appointed to numerous important posts in the fields of education and culture.

Mohammed Ali accepted Tahtawi’s ideologies, but to some extent gave credit to Hassan El-Attar. On completion of A Paris Profile, Tahtawi gave the manuscript to Hassan El-Attar who admired it greatly. He then passed it on to Mohammed Ali who assigned someone to read it to him. His similar admiration resulted in him arranging for it to be translated into Osmanli. The two versions in Arabic and Osmanli were distributed throughout the administration, schools and even the palaces. The book quickly became famous, and was widely circulated. It is now considered to be the most influential book in the Arab renaissance.

It is necessary to stress that the foundations of the Arab renaissance were not built on unrealistic claims, or a bundling together of contradictions. It fully understood that there is no fundamental conflict between European ideology and political systems, and the essence of Islamic philosophy in its pursuit of a renaissance. The Arab renaissance did not deliberately seek out commonalities, but believed that there was a consistency at root. Although at the time people devoted themselves tirelessly to realising a renaissance, it was affected by unavoidable limitations and obstacles such as procrastination and opportunism.

The Foundation of the Arab Renaissance 5

2

The European Colonization and the Reaction of Arab People: Two Factors which delayed the Arab Renaissance

The Arab Age of Colonisation

Following the wars amongst European countries, international trade came to life. It profited from the 1830s rise in the large-scale use of steam ships and railways. Trade activity also became safer, faster, and cheaper. Flourishing trade brought about a great deal of wealth for governments and merchants alike. Britain in particular already had a number of industrial cities in which half the population lived. In 1850, London had more than 2.5 million inhabitants making it the world’s largest city. Britain’s total population in 1800 was 16 million rising to 27 million in 1850. The populations of other European countries also increased.

Europeans knew that they had to develop rapidly, as industry had become so closely related to their lives and fortunes. For this reason they more than others needed to urgently seek out suppliers of raw materials for their factories. Ever increasing populations needed food production, and their products needed to find export markets. The solution for European states with significant military might compared to other states, was to control these regions through colonial rule.

So as to develop trade, European countries firstly aimed their colonial attack at regions of strategic importance, such as The Ottoman Empire which was part of the Arab Nation. From 1815 to 1850, British exports to the Arab Nation increased by 800%, among which were mostly textiles and metal products. Britain also imported commodities from the Arab Nation such as olive oil from Tunisia, Lebanese silk, and Palestinian and Egyptian long stable cotton. Long staple cotton was especially suitable for industrial cotton spinning, and the amount exported to Britain rose from nearly zero in 1820 to £1.5 million in 1861.

Although Arab countries had a comparatively large market, there had been long periods without advancements which made resisting European colonisation impossible. Rural communities formed mainstream society in Arab countries. Only a few coastal cities such as Alexandria, a coastal city with the advantage of a port, experienced any development. In the first half of the 19th century, cholera and


plague epidemics wreaked havoc on the Arab world with the exception of Egypt, resulting in barely any increase in population.

From the margins of the Ottoman Empire, European countries began to encroach upon Arab countries until the Arab World became a European colony.

1. In 1830, French troops justified their occupation of Algiers with the fact that the Masai wanted to take hold of an important trade stronghold on the coast of Algeria. This generated enormous benefits which tempted the French to continue into the depths of Algeria to occupy more territory so as to provide even more security to the strongholds and broaden their markets. By 1847, the French completed their occupation of Algeria, during which time Abdelkader El Djezairi was defeated by conflicts in the interior territories. He was finally exiled to Damascus. Following this, the French began a large land requisition with huge numbers of French colonizers arriving in Algeria. According to statistics, there were over 200,000 French in Algeria by 1860 with the native population of only 2.5 million. The French held large territories of land, and engaged Algerian agricultural workers to cultivate it. Spanish and Italians also arrived in a continuous stream, and occupied nearly all flat land for cultivation. Algerian coastal cities were also inundated with European colonialists who no doubt left their mark. French colonists gradually increased in these cities, and as their settlements expanded they became administrators. The colonialists and French political circles maintained tight relations, and resulted in the colonialists putting pressure on the French to make Algeria their colony. They even proclaimed, ‘There are no Arabs here. There are only some speakers of another language’.

2. The French and Italians fought intensely to control and rule Tunisia until finally the French got the upper hand and occupied it. The French took control of all major programs concerning the national economy and people’s livelihoods in Tunisia, for example laying railway lines between Tunis and the Algerian border, and building a harbour. French force successfully overthrew the political reformer and Prime Minister Hayreddin Pasha in 1877, once and for all killing modern Tunisia’s last endeavour to save itself. In 1881, France was induced by the invasion of the Tunisian Kroumer tribe in Algeria to launch an attack on Tunis. The Tunisian ruler Muhammed III as-Sadiq was finally compelled to sign the ‘Treaty of Bardo’ which recognised French occupation. The French then coerced Muhammed III as-Sadiq to sign an act announcing that all Tunisian foreign affairs would be assigned to a French representative. The French dispatched troops to supress surging opposition across Tunisia, and in 1883, Ali III Bey ibn al-Husayn signed the ‘Al-Marsa Convention’ which formalised Tunisia as a French Protectorate, and ruled in accordance with French governmental requests, administrative proceedings, and law and fiscal reforms.

3. Britain had coveted Egypt for some time due to its important geographical location. In 1882, Britain sent troops to Egypt on the pretext of protecting its expatriates and settling debts which led to the eventual defeat of the leader Ahmed ‘Urabi’. Britain then quickly went on to occupy the whole country. Britain abolished Egypt’s constitution, dissolved their parliament, and implemented new economic

policies, reducing it to merely a supplier of raw materials and a market place for British products. In 1884, after Egyptian troops withdrew from Sudan, Britain dispatched troops to Sudan claiming to suppress the religious movement led by Mahdi to establish an Islamic state. After several battles they defeated the Mahdi army. In 1899 the Anglo-Egyptian administration assumed formal control of Sudan; in reality just another British administration.

4. In 1878, Britain, France, and Italy attended the Berlin Conference to reach an agreement as to how regions on the Mediterranean coast should be divided. Cyprus was assigned to Britain, Tunisia to France, and Libya to Italy. In 1911, safety concerns were seen as a justification for Italy to dispatch a naval fleet to Libya. It then quickly occupied Tripoli, Benghazi and Tobruk. In 1912, the Ottoman Empire and Italy signed the Treaty of Ouchy, and Libya gave up. However, the Libyan people never ceased to revolt, especially the leader Omar Mukhtar who put up an extremely hard and bitter fight. During the 14 years following the First World War, Libya suffered large scale massacres, and Mukhtar was hung. Italy had full control over Libya until 1932.

5. In 1906, the Moroccan Empire’s Royal Family and 12 European countries including France, Britain, Italy, Germany, and Spain attended the Algeciras Conference convened in Spain with the American President Theodore Roosevelt taking the role as peace maker. The intention was to coordinate Germany and France’s interests in Morocco, and resolve problems relating to customs duties, finances, and policing. In the end, France became the meeting’s beneficiary. In 1907, on the pretext of the possibility of local riots influencing financial issues France dispatched troops to occupy Casablanca followed by the 1911 occupation of Fez and Meknesm. By 1912, Morocco was declared a French Protectorate. Facing France’s invasion was a large-scale violent resistance among which the most influential was a Rif uprising lead by el-Krim. European colonialists spent 20 years quietening down revolts in Morocco which was completely under French rule until 1926.

6. Efforts to control western regions of Africa resulted in the French colonizing Mali in 1898. The French then relentlessly invaded Mauritania resulting in it also becoming a French Protectorate in 1912, and a colony in 1920.

7. European countries, especially Britain, aimed to maintain and expand trade interests by making all Gulf States either a colony or Protectorate. Britain used fighting piracy and ending the slave trade as pretests to make Gulf States sign a number of treaties, becoming British Protectorates. These included Muscat in 1822, 1873, and 1891, Kuwait in 1899, 1820, and 1835, Sharjah in 1853, and Qatar in 1820, 1835, and 1867. Moreover, Britain dispatched troops to occupy Aden in 1839 and Al Mukalla in 1870.

8. In 1916 during the signing of the Sykes–Picot Agreement, Britain and France reached an agreement on how Bilad al-Sham and Iraq should be partitioned. This was later confirmed at the San Remo Convention. In 1922, the League of Nations council ratified that the regional mandatory administrations for Iraq, Palestine and East Jordan should be controlled by Britain, and Syria and Lebanon controlled by France.

The European Colonization and the Reaction of Arab People 9


Ideological Changes

The Arab world once held the view that a European renaissance was something to work towards, as it was established on a just and equal foundation. However, striving for hegemony between Britain and France displaced these principles of fairness, and quickly showed the ideology up for colonial expansionism. Arab people had just started to follow the examples set by Europe, and were working towards realising a vision of modernisation and enlightenment, before being forced to experience its greed. European colonial expansionism was an obstacle for the Arab World in realising a renaissance; renaissance became less of a priority when faced with having to resist European invasion and colonial expansion.

It is worth noting that European attempts to colonize the Arab World or rather their imperialist ambitions did not begin with Napoleon’s invasion of Egypt. Napoleon himself has been presented as the saviour of the Egyptian people, liberating them from the dark reign of the Mameluke Dynasty. Napoleon’s soldiers and advisors were not severe or cruel toward the Egyptian people. The historian Al Jabalah describes life in Cairo at the time: ‘If it were Muslims looking for them, they wouldn’t have forbidden them from entering. If they wished to better understand them, they would amicably take out pictures, maps, specimens of flora and fauna as well as the historical materials of distinguished scholars. I visited the French numerous times, and they showed me all of these things.’ Perhaps this was the reason that at the beginning of the Arab renaissance, Arab people has never before regarded Europeans as enemies, or been daunted by their power. It could be said, that at this time, the Arab renaissance hadn’t experienced negative influences from outsiders.

However, with European colonialist expansion, the Arab renaissance’s ideological foundation was obviously influenced by external negative facts, which were reflected in two respects.

Firstly, a proportion of Arab people saw Europeans as enemies from the start, and as Tahtawi said, considered that rebelling against Europe was the road to modernization. This not only delayed the Arab World’s modernization, but also gave those opposing modernisation a reason to criticise and reject it. Those opposing modernization also revolted against European colonial rule. They instead chose to find ways to revival by drawing from the legacy left behind by their Muslim ancestors. To establish the past model of a strong army and state.

Secondly, there was another portion of Arab people who believed the Europe exploration of the road to renaissance was right, and that Arab people should also proceed accordingly without any need to radically change or adjust. They also believed that the Arab World was backward and needed to change, and that Arab culture was the primary cause for its falling behind.

In the face of European colonial expansion, the Arab people’s thoughts were either to ‘worship the ancients’ to serve a revival, or to take the European path to modernisation and respect their ruling. The reality is that such different attitudes resulted one always being seen as a burden to the other. In short, although these new

propositions claimed they could realise a renaissance, one thing for sure is that Arab people had abandoned the propositions put forward by Tahtawi. The revival course was slow, because Arab people were rethinking their ideological guidance. However, nothing new came to fruition, no goals were accomplished, or any drive in historical development.

Jamal ad-Din al-Afghani (1839–1897) was the representative of the Salafi ideology. Afghani’s proposal that progress be made by going back ‘to the ancients’ was comparatively traditional, and naturally a type of ‘reform’ that could not be compared to the founding principles of the early phase of the Arab renaissance. In 1871, Afghani went to Egypt where he lived for 8 years. During his time teaching at Al-Azhar University, his ideas had a profound effect on his students. He then became acquainted with Muhammad Ali Pasha in Istanbul, and together they discussed their understandings of what they considered to be ‘real’ Islam, and the necessity to utilize it to ‘unite’, and deal with the risk of European colonization. In 1879, under the pressure of the British consular-general stationed in Egypt, Afghani was deported by the Khedive Ismāʿīl and then headed for India. In 1884, Afghani landed in Paris, where together with his former student Abduh set up the periodical The Indissoluble Link. It was used to give full expression and discussion to the Salafi ideology, the manner of colonialism, and its wild ambitions. It discussed colonisation’s effect on the Islamic world, as well as the weakness of Muslims. Although this periodical only published 18 issues and was banned by the Egyptian government, it still spread across the Arab Nations and had an enormous influence on intellectuals.

Nothing in the The Indissoluble Link could better embody the Salafi ideology better than the article ‘People of the past, and how to overcome chronic disease’. It criticised the discourse surrounding the necessity to follow Europe in order to realise a revival:

‘Anyone would say that imitating or worshiping other countries will only open the door to attack by enemies’.

The essay proposed that:‘In response to the valid risks on people and an essentially Islamic way of life, a

recovery of Islam and its classic guidance should be the beginnings of a new system and a mass purification and morality. Igniting change will honour the dedication of our country, and its destiny’.

On account of this, Salafi ideology can be reduced to two points; refusing a European road to modernisation and proposing to bring back the systems and ideologies of their ancestors. This ideological trend, known as the ‘Islamic Renaissance Movement’, still exists in Arabic contemporary culture, but became the fundamental ideology of Islamic political movements which rose to prominence in the 1920’s. The Islamic political movement continued to develop following the withdrawal of the European colonialists, as the troops were evacuated, but the ideology of imperialist logic was left behind. In short, the principles of the early stages of the Arab renaissance were not noticed by people advocating Salafi ideology.



The proposition of following the European path was not established, or formed by one person. Therefore it had no unified content, form or specific procedures. In reality, it stemmed from those who advocated secularism, nationalism, and socialism, but not all secularists, nationalists, or socialists had the same notion.

Those who supported the European path were in strong agreement as to its various findings, inventions and theories. Shibley Shamil, who is recognised as the pioneer of scientific ideology in the Arab world believes in Darwinism, and even alleges that ‘the religion of science has already declared war on pas religion.’

Salafi thinkers believed that such people were merely beating the drum for ‘Western Superiority’. Shibley Shamil responded to the notion of a dependence on science for an Arab renaissance by saying ‘Along with the propagation of science, will come the doom of an authoritarian tyrant.’

Arab nationalism and secularism seems to be rooted in Europe. At the start of the 19th century, nationalism was born in Europe, and Lebanese intellectuals were influenced by European culture and colonialism. In the mid-19th century, the first nationalist ideas were introduced so as to provide a basis for Arab people to gain freedom from the Ottoman Empire.

Arab communists were also influenced by Europe, especially following the successful Bolshevik revolution in Russia and the establishment of the Soviet regime. They were unwilling to let go of communist ideas, as it was an example of something within sight. Also, it is worth mentioning that the Soviet Union clearly opposed European imperialism and colonialism. For example, two months after the Soviet Union was established, its government declared that Tsarist Russia and European countries had signed the ‘Sykes–Picot Agreement’. The Soviet Union was considered a supporter of Arab liberation, and Arab communists adopted ‘Communism’ as being the correct path for an Arab revival. Certainly, the emergence of the Arab communist movement wasn’t due entirely to the establishment of the Soviet Union, or their opposition to European colonialism. It was the intrinsic application of Marxism within the communist movement that enabled regional independence that was appealing, and considered to be an appropriate path for the Arab Nation’s path to revival. As the Syrian ideologist Bu Ali Yasin stated:

‘Scientific socialism is an appropriate path for guiding the revolutionary Arab populace, as by becoming the ideology of Arabian working-class people, it doesn’t have to answer to Europe or imitate the practices of Europe, Russia or China.’

In short, from the start of the European colonial invasions and occupations of Arab states, the historical development of the Arab renaissance was altered. Original manuscripts described the current state of Arab people and their culture, and were the starting off point for establishing an Arab renaissance which had lost its footing. In response to colonial expansion, those with deep ideological ideas sprung up in print, and expressed standpoints which tended towards either an ancient, or an alien culture. Arab ideology is rooted in two very different perspectives, and these deep changes are reflected in the modern developmental processes of Arab states. The two different ideological angles in practice are

interdependent; the minority depend on the ideologies of the past, and the majority depend on western countries.

What must point out and explain that from 1920 to the mid 1920’s, Arab states gained independence in quick succession. Ideological trends were organised into their own political parties and movements. Real action was hoped for, but with adjustments which could have exceeded the results of their ideologies. This effort was unsupported which rendered hoped for benefits unrealised. For example, Salafi ideology always attempted to bind together the ‘traditional’ and ‘modern’; enjoying the fruits of human civilisation, and abiding by what they believed to be the principles of Islam. This approach to establishing a new society within an old ideological system couldn’t possibly have worked; a new system built on a foundation of individual liberty, and an old ideological system which advocated a collective spirit, and opposed individuality. This attempted ‘hypothesis’ was not the early principle proposed by Tahtawi. However, many cultural problems in the Arab World were attributed to it. Tahtawi’s proposals weren’t loaded with contradictions bound together. Instead, common factors were identified within different issues which rendered them fundamentally consistent. It must be said that the purpose of all the various social trends of thought were consistent so as to realise revival. Rather than a foundation of ‘common factors’, they all saw ‘coordination’ as a starting point.


3

Western Obstructions and Eastern Openness

Western countries not only obstructed the Arab World’s course to modernization and renaissance throughout the colonial period, even after the troops were withdrawn, they spared no effort in continuing to cause problems which resulted in these countries falling even further behind. They either made direct use of state-owned machinery, or worked from the inside by stealthily supporting backwards forces. For example, when the Arab states were in the process of diverging, intense bias towards Israel in particular had a serious negative impact on the Arab renaissance. Western countries have always exploited the third world; especially Arab states in which they have attempted to foster a dependence these countries had no choice but to pursue.

These practices came extremely naturally to Western countries, since the Arab states possessed abundant oil as well as a strategic geographical position. Thus western countries maintained a remarkable interest in the Arab world. Certainly, it cannot be said that the Arab civilisational crisis is due completely to external factors. As with every nation that falls behind, there must be a degree to which interior reasons are to blame. For instance, cultural factors have played a significant role in the Arab crisis. Even so, it must still be stressed that various external factors, and particularly colonialism, have had a disastrous impact upon Arab people.

Just as the residual effects of colonialism continue to remain, so do the two paths which define the Arab World’s ideological response: either regress to the past, or follow their example. This is the most significant reason why an Arab revival is stunted.

Following the cold war, the Western development model was deemed to be the ‘the termination of human societal advancement’ and the ‘final form’ of government. The US was seen as the only superpower in the world that controlled international politics as well as wielding a deep influence worldwide on all fields of development such as culture, science and technology. The US hoped that globalisation (or ‘capitalist’ globalisation) would promote Western liberal economic and societal development models, and way of life. In the face of these trends, Arab people have responded with two main approaches:


The first is to ‘restore ancient ways’. Supporting this ideology were those deeply immersed in history, and devoted to the notion that repeating Arab approaches to development through history was the remedy for reforming the Arab World. This ideology was generated during the early stages of colonization, and was an extremely emotional response to the intensifying colonialism. Those holding these ideas believed restoring ancient ways to be more consistent with history. They not only duplicated a departed social, political, and ideological system, but also took into account the behaviour, lifestyle and even language custom of the ancients.

The second direction was following the US example. After the US won the Cold War, liberalism was advocated as a beneficial and realizable path to modernization owing to its emphasis on liberalization of individuals, politics, and the economy. It promised to overcome all manner of difficulties, and enable states to reach a level of Western development by following an efficient method. It should be said that this following of the US was a worldwide phenomenon, and not unique to the Arab region. US involvement in international politics, especially in Palestine, severely harmed the interests of Arab people, but yet solutions were still sought. The US model is closely related to its political, economic and social systems, and should therefore not be involved in international politics. More than just merely referring to US models, these thinkers proposed that they should serve as ‘guidance for modern Arab ideology’, that Arab ideology be in compliance with such models.

Following the examples set out by the US and by colonialism requires wholesale westernisation, and a relationship with the Arab World that resembles master and servant. It completely neglects the differences between Arab and US culture. Mainstream Arab culture is rooted in collectivity and traditional tribal sects, which are not compatible with liberalism. In addition, the US is unbalanced. Its diplomatic policies harm the interests of Arab people, especially in 2003 when troops were dispatched to occupy Iraq, causing the Arab World to reject liberalism. However, what needs to be explained is that those who oppose liberalism are not in reality rejecting notions of ‘modernisation’ and ‘democracy’. What they truly reject is US imperialism, of which liberalism is a representation.

It must be stressed that the above mentioned ideologies are not the only ones. They just happen to be the most influential. With such obvious divides, the critical question is: What ideology should we adopt? Restore ancient ways, or follow the US? In truth, these two ideologies bear no resemblance to the Arab renaissance of the first half of the 19th century, which was rather to pursue a revival stemming from Arab countries’ own conditions.

If Western countries’ colonization of the Arab and the Arabian’s ideological response were two import obstructions to the Arab renaissance, from the current situation, the Arab World’s opportunity to realise a revival is remote. Imperialist countries still have enormous interests which they will not give up, at least for the first half of the 21st century.

Although Western civilisation has achieved a great deal and deserves to be studied, the West will not help Arab people, nor create an environment in which they can realize a revival. This is because, once the Arab world accomplishes

independence and revival, it will be impossible for the West to continue to exploit its natural resources.

An Arab revival which follows the path of the West is already loaded with obstacles. The West is continuously followed as an example, and the fountain from which Arab ideologists seek out ideas on reform and modernisation. However, history has proved that following the West is in no way beneficial to Arab people. Although Western states have realised enormous advances, the force of colonialism had brought about a deep crisis in the Arab World. It is a vicious circle.

The Western path is blocked, but the East, mainly consisting of developing countries, and East Asian states in particular, should be an example from which an Arab revival might learn. Prior to the mid-20th century, East Asian and Arab states suffered equally from the effects of colonization and exploitation at the hands of Western countries, and hence have similarities in terms of development conditions. Therefore, paying close attention to their experience of development is extremely beneficial. It can help us understand how East Asian countries have shaken off the situation of backwardness.

Certainly, we must note that there are differences between East Asian countries and the Arab World, especially in terms of the impact Western countries have had on their development. It must also be stressed that the Arab–Israeli conflict in particular has had an extremely negative impact on Arab liberation and development. However, we don’t want to magnify, and attribute this as the sole reason for a stunted revival. As mentioned previously, the main reasons lie within.

This book’s major research presents New China’s rise, and stresses how it transformed grand ambitions into detailed and specific action plans which were successfully implemented. There are two major reasons for researching China. One is that China is a developing country which shares many developmental commonalities with Arab countries, and more importantly an early history which sought out the same paths to a renaissance. Chinese people have always had firm objectives combined with a flexible ideology, striving to avoid hesitation, contradiction and opportunism. This ‘results orientated’ approach is the most important lesson we can learn from China’s successes.

Western Obstructions and Eastern Openness 17

Part One The Arab and Chinese ‘Non-Conformist’

Rise

1

‘Non-Conformist’ – The Foundations of China’s Rise

The Beginnings of New China’s Rise

On 1st October 1949, the Chinese Communist Party (CCP) declared to the world at the Chinese People’s Political Consultative Conference that The People’s Republic of China had been established. According to the state’s founder, Mao Zedong, this was a transitional period in which a new democracy was to be steered towards socialism.

In 1954, New China formally issued the first part of its constitution. It stipulated that the state institution would include the People’s National People’s Congress, The State Council of the People’s Republic of China, the Supreme People’s Court and Supreme People’s Procuratorate, the Local People’s Assembly of Representatives, the Local People’s Congresses at Various Levels and their Standing Committees, and The Organs of Self-Government of National Autonomous Areas. The Chinese Communist Party and the military under its leader played a leading role in state politics.

The Chinese Communist Party was first established in 1921, and adopted a nationalist rather than internationalist standing which differentiated it from most other communist states. Agricultural workers were the revolutionary strength behind the Chinese Communist Party. Sino-Soviet divergences illustrates this issue well.

Mao Zedong was New China’s leader from its initial establishment until his death in 1976, but continues to symbolize its fairy tale even after his death. After his death, many policies were modified, but this had no impact on their position. China was once poor and weak, and had suffered a great deal of intimidation. China has now come to occupy an important global position as a great power.

Mao Zedong’s ideology had a large degree of flexibility, which allowed for adjustments in response to different situations at any given time. For example, before the founding of New China, Mao Zedong distributed land among agricultural workers, reduced rent and lowered interest rates. This won him the support of a vast number of agricultural workers for the revolution. However after its founding,


Mao Zedong sanctioned state control of land and all agricultural products so as to expand the scale of production, and the country’s 740,000 agricultural workers were organised into 26,425 people’s communes.

Following the eight years of the Second Chinese-Japanese War as well as four years of civil war between the Kuomintang and the Communist Party, Mao Zedong faced a disastrous economic situation. As China had always been an agrarian country, Mao Zedong established a centralised planned economy, similar to that of the Soviet Union. Firstly, agricultural land and then other fields of industry were taken into an expanding realm of public ownership. Major reforms abolished private ownership. This measure was part of China’s first five year plan which led to large improvement. The gross domestic product (GPD) rose from 6.7 billion RMB in 1952 to 10.68 billion in 1957 which included large increases in agricultural product from various production departments. The state successfully controlled inflation, reorganised taxation, invested in development, and increased employment opportunities and wages.

Large-scale natural disasters brought about a great deal of agricultural instability in the late 1950s until the early 1960’s. The lives of agricultural workers were heavily impacted, but the Chinese economy nevertheless redeveloped at a reasonable pace. All agricultural products were under state administration, and had to be rationed during this period of hardship, in order to meet life’s basic requirement for sustenance. This hardship and rationing transformed the people’s communes, and resulted in a slowdown in productivity, inaccurate grain output figures, and theft. It could be said that these rural reforms brought little to China’s agricultural workers, and had a negative effect on its economic development.

The value of China’s industrial output trebled between 1949 and 1966. The country prioritized developing aircraft and automotive manufacturing, heavy machinery, metallurgy, coal, electricity generation, and the precise instruments required for heavy industry. A host of industrial and mining enterprises were built across the country, including in remote areas.

Ancient China’s glorious civilisation and unique inventions are world famous. After the establishment of New China, the Communists attached a great deal of importance to the development and advancement of science and technology. They enthusiastically encouraged overseas Chinese scientists to return home. This created excellent conditions in which to study, and resulted in the establishment of scientific research institutions across the country. In 1949, when the communist party came into power, there were only 30 scientific research institutions, and no more than 500 full time staff. By the mid-1950s, the number of scientific research institutions had reached 840 with 400,000 full time employees. Along with the field of science, China made other great advancements. In October 1964 and May 1965, two atomic bombs were detonated, making China a nuclear power.

China’s made great military, agricultural, space, and manufacturing advances, benefiting China’s investment in education. Following the establishment of New China, the school enrolment rate continuously increased. In 1949, only 20% of children across the country received an education. By 1985, this had increased to 96%.

Medical treatment and public health also saw clear improvements, with marked increases in average life expectancy. Mao Zedong did not, however, advocate a family planning policy, which resulted in China experiencing unprecedented population increases. New China had a population of around 541 million people when it was established in 1949. By 1976, the population had reached 933 million.

New China issued a series of laws to protect the rights of women as well as men in the workplace, and provided equal opportunity for them to participate in education, and social activities. Therefore, the scale of women’s contribution to the workforce and their productivity were subject to dramatic increase. It is worth noting that although society made great advances in many ways during this period, improvements to the standard of living were slow. For example, China’s GDP in 1952 of 67.9 billion RMB increased to 300 billion by 1975. However, increases to peoples’ incomes in the corresponding period were relatively limited.

The Chinese Communist Party was devoted to strengthening leadership within Chinese society, and opposed any attempt to destroy and divide the state. However, this did not hamper the cultural heritage of minority groups, many of which were entrusted with a great deal of autonomous power. Since the death of Mao Zedong, this policy has continued to be implemented and developed.

China’s development has no doubt been impacted by international conditions and by conflicting ideological camps during the Cold War. Though China’s conflict with Japan ended after Japan was defeated during the Second World War, they have remained, ever since, rivals.

In 1950, the Korean War broke out and the Chinese People’s Volunteers supported North Korea so as to protect their national security. On the North Korean battlefields, China achieved a series of significant victories, and American troops, seemingly so invincible during the Second World War, came under enormous pressure. President Eisenhower even threatened to use nuclear weapons. In 1953, the signing of the Korean Armistice Agreement brought an end to the Korean War, but China paid an enormous price, and sensed the US’s imperialist ambitions for the first time. Following the war, the US lent support to countries surrounding China, especially her old enemy Japan. Supporting them was an attempt to contain and threaten New China. This behaviour, with its intention towards China, resulted in the Vietnam War. China supported revolutionary activities which resisted US occupation, so it can be said that China-US relations during the 1950s and 1960s were essentially hostile.

Ideological divergences with the Soviet Union had a negative impact on production. For instance, China was no longer able to learn from the Soviet Union in research areas such as nuclear weaponry in which they had a leading edge. Such technology would have helped a great deal with China’s development. A more acute consequence of deteriorating China-Soviet relations came in the form of armed conflicts in the border regions in 1969. Around this time, the US approached China, hoping to improve relations and suppress the Soviet Union.

‘Non-Conformist’ – The Foundations of China’s Rise 23


In short, Mao Zedong led China along the correct road to revival and advancement, and significantly improved the country’s position in regional and international affairs. As a result, in 1971 it recovered its role as a permanent member of the United Nations Security Council. Of course, this does not mean that everything Mao Zedong did was somehow great. Certain measures had a deleterious impact on the nation’s development, the most significant of which was the Cultural Revolution.

Finding the Right Path Following the Cultural Revolution

Soon after Mao Zedong’s death, Chinese Communist Party leaders began to re-question the policies adopted since, strove to learn from its experiences, and move on from the Cultural Revolution. Efforts were made to clear up residual issues such as exonerating Liu Shaoqi, various other party leaders and the millions of people who had been rehabilitated.

In the months that followed, the Hua Guofeng continued to use Mao Zedong’s slogans. In February 1977 the ‘Two All’s’ were introduced, stating that, ‘All of Chairman Mao’s decision’s must be upheld; all of his instructions will always be abided by’. The Two All’s triggered people to question the capabilities of Hua Guofeng while Deng Xiaoping’s were regarded with certainty. He cited Mao Zedong’s two famous slogans used before the establishment of New China; ‘Be Practical and Realistic’ and ‘Practice is the sole criterion for testing truth’ in opposition to Hua Guofeng’s Two All’s. Deng Xiaoping believed that in order for China to be successful, it would need to overcome dogmatic constraints.

In December 1978, the Third Plenary Session of the 11th Central Committee of the Chinese Communist Party convened in Beijing. After the meeting, Deng Xiaoping and his colleagues at the Political Bureau held nearly all leadership positions, and Deng Xiaoping became China’s leader.

Deng Xiaoping and this new leadership had much education and past experience at their disposal. They applied themselves to conceiving a plan which would encompass every field, especially new policies in the field of economics. In December 1978, the Third Plenary Session of the 11th Central Committee of the CPC was convened. It was stated that imprisoned ideologies needed to be liberated, and that the party and nation’s central functions had moved on from class struggle to economic construction.

Although the new leadership had done away with Mao’s class struggle, and endeavoured to resolve the negative residual effects left behind by the Cultural Revolution, the policies they decided upon would not impact the role of Marxism, as it was still deemed to be the foundation for China’s victory and advancement. Neither did the new leadership undermine Mao Zedong’s historical contribution to the construction and liberation of New China. All responsibility for the period of chaos during the Cultural Revolution was placed on The Gang of Four. On 30th March 1979, the CPC Central Committee convened the first Theoretical Work

Retreat, and Deng Xiaoping proposed that China reform and modernise with the ‘Four Cardinal Principles’. It stated that the socialist path and proletarian dictatorship should be followed by a Communist Party leadership, and an adherence to Marxist-Leninist and Maoist ideology. The principles of these reforms may seem inconsistent at first glance, but should be interpreted objectively as intended to create the favourable conditions in which Deng Xiaoping hoped China’s reforms for modernisation and construction might be achieved. According to Deng Xiaoping, political stability was crucial as only a stable state could have the energy and focus for reform, rather than for non-political or ideological conflict.

Deng Xiaoping emphasised developing production, and the notion of improving productivity became more predominant. In 1984, Deng Xiaoping proposed in his essay ‘Building Socialism with Chinese Characteristics’:

‘Marxism paid great attention to developing productivity. We speak of communism, but what does it actually mean? That one should work according to their ability, and distribution should be as required. This requires that societies have a high level of productivity in order to develop, and enjoy the utmost material wealth. Therefore, the phase most fundamental to socialism is developing productivity. What makes socialism superior is that it embodies higher and faster productivity than capitalist development. If you say our national construction has its shortcomings, then this must be due to neglected aspects related to productivity. Socialism wants to wipe out poverty. Poverty is not socialist, and it certainly is not communist’.

On the basis of Deng Xiaoping’s socialism with Chinese characteristics, China applied market economic mechanisms for managing its economy. Perhaps some people would become prosperous first, but this would attract overseas Chinese to return home and invest. In turn, this would reduce the state’s need to subsidise various products and services. During this time, China began opening up to the outside world. It is worth emphasising that during this process, China always stressed its need to maintain sovereignty and independence. In 1984, Deng Xiaoping always pointed out to his foreign guests that China needed investment and technology from foreign countries, but that the foundation of its reform and opening-up policy was independence.

China’s leadership formulated what has become known as the ‘Three Step’ development strategy. The first step was to double the 1980 GDP by the end of the decade which would resolve food and clothing shortages. The second step was to double GDP again by the end of the 20th century so as to enable quality of life to reach a comfortable level. The third step was to raise GDP per capita to the level of a moderately developed country by the mid-21st century in which people are comparatively affluent. The foundations to making this possible were modernising agriculture, industry, science and technology, and national defence.

Reforms specific to the First Step were composed of two parts starting with agricultural reforms in 1978 and urban reforms 1985.



Towards a Revival

Deng Xiaoping always pursued the advancement of reform step by step. Reforms within the First Step were usually tested in select regions, and then expanded when successful.

1. Industry and Technology

In 1980, four special economic zones were established, and became the windows that opened up China. Shenzhen neighbouring Hong Kong, Zhuhai next to Macao, and facing Taiwan separated only by sea is Shantou and Xiamen. Shenzhen, Zhuhai and Shantou are all located in Guangdong province and Xiamen in Fujian province. These special economic zones implemented comparatively low tariffs and taxation, allowing private enterprise to establish, and build a securities market. These special zones were successful in attracting foreigners, especially capital and technology from Hong Kong driving rapid industrial development.

These special economic zones brought favourable benefits. In 1984, the Chinese government decided to expand this experiment to 14 other coastal cities, such as Dalian, Shanghai, and Tianjin. In 1992, 52 National Economic and Technical Development Zones were promoted across China, and foreign research and developmental institutions and new high-technology enterprises were given preferential policies, and mitigated tariffs and taxes. The role of these policies was to speed up the development of new high-technology industries, which gave rise to a large number of major industries such as aircraft manufacturing, aerospace technology, computer equipment, and electronics. The success of these economic and technical development zones in addition to the further promotion of Advanced Technology Parks in various regions propelled China’s industrial and technological advance.

So as to provide a favourable climate for industry, China produced a series of laws and regulations aimed at protecting industrial development. For example, the ‘Trademark Law’ was issued in 1982, the ‘Patent Law’ in 1984, and the ‘Copyright Law’ in 1990, thus powerfully safeguarding the interests of enterprise, and promoting optimal market development. China also underwent a number of measures and devised laws so as to develop and safeguard state-owned industries, for example the ‘Enterprise Bankruptcy Law’ and ‘Industrial Enterprises Owned by the Whole People’ were introduced successively in 1987 and 1988. These two laws stipulated that:

‘State-owned enterprises must acquire a person of judicial qualification, in accordance with the law, who autonomously operates, assumes sole responsibility for profit and losses, and keeps independent business accounts of the socialist commodities produced by operated units’.

‘The enterprise has the right to possess, use and dispose of the assets in accordance with the law, which are authorised by the state to be under operation and management of the enterprise’.

‘Enterprises creating serious losses due to poor management, or who are unable to repay debts will be declared bankrupt in accordance with the law.’

With the state’s encouragement and support, some state-owned enterprises have been successful and industry leaders, whereas others have failed in the face of competition and become bankrupt. China has also adapted its centrally planned economy to focus on expanding the proportion of tax revenue shared with local government so as to boost their enthusiasm. Party members and cadres at various levels as well as entrepreneurs were required to operate within an administrative region, and particular individuals with outstanding performance were rewarded with promotion.

From 1984, China officially allowed the establishment of private enterprise, which impacted every industrial, commercial, and service industry. Their numbers multiplied year on year, and made a correspondingly significant contribution to the Chinese economy. However, it is worth noting that the main reason for the rapid development of private enterprise in the 1980s was due to the increased global demand for consumer goods and services. The balance of market supply and demand was adequate until the 1990s when commodities started being produced in excess. This compelled small enterprises to merge and reorganise so as to improve competitiveness, and also strive towards improving the quality and technological features of products.

The global high technology boom created an increasingly challenging international marketplace. China implemented the ‘863 Plan’ in 1986 to promote the research and development of high technology. According to the program, 15 major projects were established covering seven fields of great importance to China’s future economic and social development- such as biology, space science and information technology- in order to pursue advanced global standards. Twenty years of development following the 863 plan resulted in more than 8000 patents in China, and the formulation of more than 1800 national and industrial standards. The 863 Program continued to support independent innovation, the achievements of which came close to an advanced international standard. High performance computers, third generation mobile communications, high speed information networks, deep sea androids and industrial robots, space and marine observation systems and exploration, new generation nuclear reactors, super-hybrid rice, insect resistant cotton, and genetic engineering are the various fields which have already won a place on the world stage. Bioengineered pharmaceuticals, communication equipment, high performance computers, Chinese language information processing, intraocular lenses and optoelectronic materials and devices have all been extremely competitive in their respective emerging fields, and have successfully developed products with proprietary intellectual property rights thus creating growth areas for China’s high technology industries.



2. Agriculture

Following the Third Plenary Session of the 11th Central Committee of the Chinese Communist Party, China enacted the Household Contract Responsibility System which linked remuneration to output. This enabled rural workers without land to contract it, and enjoy the wealth generated from the sale of its produce. From 1979, the produce from summer crops appeared on the market. The state purchase price of grain increased by 20%, and the price for above-quota purchase increased by 50%. At the same time, chemical fertiliser, pesticides, and agricultural implements reduced massively in cost and motivated agricultural workers to join the system in droves thus immensely improving productivity. According to statistics, in 1979 only 1% of China’s arable land had implemented the Household Contract Responsibility System, but this had reached 20% by 1980, 45% by 1982, 80% by 1983, and 99% by 1984. In 1983, China officially abolished 25 years of the People’s Commune System. In 1984, it was decided that household contracts could be extended from 15 to 30 years.

In addition to establishing this system, the Chinese government placed a high premium on elevating the technological standard of agricultural production. In the early 1980s, China created 500 Agricultural Technology Model Villages across the country to test advanced technology and their effect on productivity. This was essential for 80% of the country’s population who worked in agriculture, and the advanced experience derived from these agricultural models were disseminated throughout the country. In addition, the government attached importance to agriculture utilizing foreign capital and technology, and through reduced tax revenues were successful in attracting foreign agricultural enterprises to invest.

The aforementioned reforms proved beneficial as the total value of China’s agricultural output increased annually by an average of 2.5% through the 1970s, and up to 9.3% in the 1980s. The average incomes for agricultural workers also enjoyed a 17% annual increase. Following these large increases in productivity, workers sold off surplus agricultural products in cities which brought about the birth of ‘middlemen’, who were more familiar urban shopping habits. Meanwhile, farmer’s markets opened around the outskirts of cities, and their reasonable prices led urban residents to shop there rather than in state-run shops.

Along with the development of rural productivity, township enterprises sprung up producing food and drink products, clothes and shoes, ceramics and kitchen ware, and agricultural machinery. Products from township enterprises increased in share not only in the domestic market, but also started being exported abroad. In 1990, 24% of China’s total export market was produced by township enterprises, and they crucially contributed to resolving unemployment problems. In 1979, township enterprises absorbed a labour force of 29 million people accounting for amounted to 9.93% of the total rural workforce in that year. In 1990, the township enterprises labour force amounted to 92.62 million, accounting for 22.05%. In 2001, the township enterprises absorbed a labour force of 127.3 million people accounting for 25.94% of the total rural workforce in that year. Of course, the distribution of China’s labour force was uneven and mainly concentrated in the coastal regions of Shandong, Guangdong, Jiangsu, Hebei, and Fujian provinces.

3. International Trade

Following the reform and opening-up policy, China established 5 special economic zones, opened up 14 coastal port cities, developed the Pudong New District of Shanghai, and established 15 free trade zones, 32 economic and technological development zones, 52 high-tech development zones, and 38 export processing zones. In succession, provincial capitals were opened up; 13 along the coast, 6 along the Yangtze River, and 18 inland. They were all given specific economic policies, thus giving substantial support to China’s economic development, especially foreign trade. In 1978, China’s foreign trade amounted to $20.6 billion, and broken through to $115.5 billion with a surplus of $8.7 billion by 1990.

4. Education

After 1978, New China’s leadership started to make adjustments to reforming their education plan. In the new leadership’s view, education and China’s various fields of development, in particular economics and technology, went hand in hand. All levels of schools were required to serve the modernization and construction of the state. In response to increasing international competition, talents were needed to satisfy requirements for future development. Promoting students’ moral, intellectual and physical education, improvements to state student services, and a sense of responsibility to society enabled people to courageously explore innovation, and develop practical problem solving skills.

In reality, New China attached great importance to education from its very inception. In 1978, the number of school aged children in China had massively increased, and from then on great steps were taken to improve school enrolment rates in various regions. A major development in educational reforms included the addition of English in primary school syllabuses. Competent educational authorities created specific regulations with regards to teaching methods. For instance, that primary should be a happy and joyous period in a child’s life. School work should be relaxing and enjoyable, with a reasonable amount of homework. First-grade students were forbidden from receiving homework, second and third-grade homework could not exceed 30 minutes, fourth-grade could not exceed 45 minutes, and fifth and sixth no more than 1 hour. Primary school students required no less than 10 hours sleep. Teaching was considered an opportunity to freely express ideas to students, and any physical punishment was forbidden.

By 1985, the rate of school-aged children enrolment had reached 95.9% and 100% in one-third of provinces across the country. In 1986, the ‘People’s Republic of China Compulsory Education Law’ was issued with the following stipulations:

‘State implementation of 9 year compulsory education requires that provinces, autonomous regions, and can determine their own steps for carrying out the 9-year compulsory education according to their own cultural and economic development conditions.’



According to the law, state, society, schools, and families must ensure that children of school age, from the age of 6 years and regardless of gender, nationality, or race must enter into a school and receive the stipulated compulsory education. It is forbidden for any organisation or individual to employ children of school age. Implementing compulsory education requires operational expenses and investment in capital construction, so the State Council and Local People’s Congresses at Various Levels and their Standing Committees are responsible for raising funds, and guaranteeing all implementation. What is worth mentioning is that the government not only highly valued students’ education and their scientific knowledge, but also placed emphasis on improving their practical skills. For example in the 1980s, middle and primary schools in cities would often build small factories where they could work during their extracurricular time. The produce was sold in markets, and the earnings used to supplement the school’s development. Students from rural primary and middle schools were organised to work for an allocated one month a year during the busy seasons. The practice of ‘student work’ enhanced students’ production skills as well as their emotional connections with other workers.

The Chinese government also paid close attention to developing the quality as well as quantity of higher education. In 1978 following China’s implementation of the reform and opening-up policy Policy, development was prioritized in the ‘Four Modernizations’. In the government’s view, China’s future relied on advanced science and technological labour, rather than labour intensive industries. Across the country hundreds universities and colleges were established, and private capital was encouraged to participate in and develop higher education. With this as a backdrop, Chinese university enrolment rates increased year on year. Students enrolled by colleges and universities reached 2.6 million in 2001, which was a 44% increase on 2000. According to the Chinese government’s published development goals, by 2015 the gross enrolment rate for Chinese universities will be 40%, and more than 20% of the entire work force will have received a higher education. So as to improve the quality of the labour force and develop the economy, China is putting effort into developing economics, law, business administration, information technology, foreign languages, and applied sciences.

In conclusion, Deng Xiaoping’s reform initiatives have propelled China’s enormous development, and an average growth rate per annum of 10%. Chinese people lived in poverty for a long time, and now enjoy remarkable improvements to their quality of life.

‘One Nation, Two Systems’

The most significant issue facing China’s rise that must be addressed is its unity as a single state. The leadership was always committed to recovering Hong Kong and Macau which were formerly occupied colonies (Hong Kong by Britain, and Macau by Portugal) as well as Taiwan which was occupied by the Kuomintang in 1949, and are issues being addressed with a great deal of pragmatism.

The societal and market economic systems of Hong Kong, Macau, and Taiwan are quite different to that of the Mainland, so if the PRC were to recover these regions, the formation of their societies and economic structures would probably change.

To ameliorate the panic and doubt felt by compatriots in Hong Kong, Macau and Taiwan in the face of a return to China, Deng Xiaoping proposed that ‘one nation’ is the common aspiration of all Chinese people, but this does not mean that the Mainland requires that its ideology be exported. When Deng Xiaoping met with the British Prime Minister Margaret Thatcher in 1982, the concept ‘One Nation, Two Systems’ was proposed, in which Hong Kong, Macau and Taiwan would still retain their current systems upon being returned to the motherland, but would operate within the premise of ‘One China’.

The ‘One Nation, Two Systems’ concept proposed that citizens of Hong Kong, Macau and Taiwan had different lifestyles and economic conditions superior to those in Mainland China. They needed to believe in the great benefits that would come from being returned, and that they would have the right to manage their own affairs. In addition, this concept also aimed at freeing Western countries from worry about their economic interests in these areas. In actuality, retaining the economic structures in place in Hong Kong and Macau are to China’s benefit. These three areas possess booming economies and can bring the capital and technology required for Mainland China’s economic development. It will also inspire confidence in foreign investors, and entice them to invest in the Mainland also.

In July 1987, the Secretary of State for Foreign Affairs, Geoffrey Howe met again with Deng Xiaoping to go over Hong Kong’s ‘One Nation, Two Systems’ concept.

‘The Chinese government wishes to resolve any issues over Hong Kong, and that its position, principles, and policies should remain unaltered. It has been discussed repeatedly that after our government regains sovereignty in 1997, Hong Kong’s society, economic structure, and way of life will remain unchanged and its legal system will be fundamentally unchanged. Its status as a free port for international trade and as a financial centre will also remain unchanged. Hong Kong will continue to maintain and develop their economic relations with other countries and regions. We have discussed many times that aside from troops being dispatched from Beijing, no government cadres will be sent to Hong Kong’s Special Administrative Zone. This also will not change. Maintaining state security is the reason we dispatch troops, not to interfere with Hong Kong domestic affairs. Government policies regarding Hong Kong haven not changed in fifty years which must be counted.’

This was conceived as a foundation, and in December 1984 China and the UK officially signed the Joint Declaration of the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the People’s Republic of China on the Question of Hong Kong. In accordance with this declaration, the UK returned Hong Kong on 1st July 1997 to the Chinese government after 156 years of British occupation. Prince Charles, the British Prime Minister Tony Blair, and the Chinese President Jiang Zemin and Prime Minister Li Peng were all in attendance for the official handover ceremony.



As with Hong Kong, Macau was handed back to China on 20th December 1999. If you say that Hong Kong is an important global investment and trade centre, Macau’s gambling industry is just as famous. Even still, China still follows Deng Xiaoping’s principle to ‘give consideration to history and reality’. Macau’s social and economic system, as well as its way of life has not been changed.

Taiwan is no different to that of Hong Kong and Macau. The issue doesn’t stem from its western colonial occupation, but from history left unresolved from the civil war between the Kuomintang and Communist Party. In the early 1970s, New China recovered its position as a permanent member of the United Nations. Even though the US initiated improvements to relations with China, so as to confront the Soviet Union, broke off relations with Taiwan, and recognised the PRC government as the sole legitimate government, the US government still continued to support Taiwan on the political stage and sold them weapons. Taiwan is used as a political issue to pressure Mainland China in international politics.

Due to US intervention, the problem with Taiwan is much more complicated than that of Hong Kong and Macau. Even so, ‘One Nation, Two Systems’ has always been seen as the basic principle for resolving the Taiwan problem. On the international stage, China opposes any country interacting with Taiwan, its recognition as a sovereign state, and admittance to join international organisations. Meanwhile the Mainland attaches importance to strengthening trade relations with Taiwan, and encouraging Taiwanese enterprises to invest in the Mainland. The Mainland hope that both sides will develop relations in terms of trade between its people, and clear up any misunderstandings, reduce hostility, and enhance consensus before finally realizing a unified state. The Taiwan problem has created enormous problems for China, and requires long-term engagement. As Deng Xiaoping once said, ‘Reunification of the motherland is the aspiration of the whole nation. If it cannot be accomplished in 100 years, it will be in a 1,000.’

Socialism with Chinese Characteristics

Between January and February 1992, Deng Xiaoping took a train for the south of China and conducted an inspection of Wuchang, Shenzhen, Zhuhai, and Shanghai out of a desire to boost the drive and pace of China’s reforms. During this South China Tour, Deng Xiaoping affirmed that cities such as Shenzhen had achieved tremendous economic construction. He proposed that development economics was China’s new primary task working firmly in accordance with the Communist Party’s basic line and persisting with the path of socialism with Chinese characteristics.

In October of the same year, the Chinese Communist Party’s 14th National Congress convened in Beijing. The meeting established a socialist market economic system with the aim of setting up reforms. Deng Xiaoping’s construction of socialism with Chinese characteristics became the theoretical guide for the Chinese Communist Party. The meeting proposed:

‘The socialist market economic system we want to construct would be a macro-controlled market within a socialist state. The allocation of resources is fundamentally impacted, as economic activity must follow the requirements of the law of value, and adapt to the changes of supply and demand. Through the use of price leverages and competitive mechanisms, the allocation of resources can go to and benefit the right segments, and both pressurise and motivate enterprise to be more competitive. Using the market to create various economic signals will provoke sensitive responses, and accelerate the timely coordination of production and demand. Meanwhile, we should also take note of the advantages and disadvantages of the market, and continue to strengthen and perfect the states macro-control of the economy’.

‘Transforming state-owned enterprises, especially the operational mechanisms of large and medium-sized, and pushing them to join the market will strengthen and improved their quality. The key link to constructing a socialist market economic system is consolidating its mechanisms and playing to the superiority of socialism.’

Straightening out property relations, separating government and enterprise and creating workable and autonomous rights for enterprise enabled them to independently run their own operations and assume sole responsibility for profits and losses as well as development. It is constrained only by legal entities and market competition, but assumes responsibility for increasing the value of state-owned property. A shareholding system helps facilitate the separation of government and enterprise, and transforms its managerial mechanisms and accumulation of social funds. It was initially tested, and the results were used to quickly formulate workable laws and regulations which contributed to ordered and sound development.

Following the 14th National Congress, China unveiled a series of laws and regulations aimed at constructing a socialist market economy. In 1993, the newly unveiled Corporation Law stipulated that a Public Liability Company, in which all capital is comprised of equal shares cannot be owned by shareholders in excess of what the company is responsible for. The company must undertake full responsibility for debt, and total assets. Corporate shareholders act as investors, and inject capital into the company so as to enjoy the benefits reaped from the total assets as well as the right to make important decisions and select management. Companies under state macro control must produce and operate autonomously in accordance with market requirements so as to improve economic benefits, productivity of labour and maintain and increase the value of assets. Similarly, the 1993 Law against Unfair Competition was unveiled stipulating that:

‘Proprietors making market transactions must abide, at one’s own accord, to the principle of equality, fairness, honesty and credibility, and comply with recognised business ethics. They must not make illegitimate use of their enterprise or registered trademarks to engage in market transactions which would damage competition. Proprietors must not use property or other methods to bribe, market, or purchase products. They must not use advertising or other means to mislead people with false claims with regards to the product’s quality, production composition, properties, application, producer, expiry date, or place of production.’



The same year, the Law on Protection of the Rights and Interests of Consumers stipulates that:

‘Proprietors are responsible for the quality of their products, and if the product quality and outer packaging do not comply with the indicated standards, the proprietor must repair or replace them. If the consumer makes a loss, the proprietor must compensate them.’

In 1994, China issued the Advertising Law stated that:‘The advertiser, and the advertisement proprietor and publisher must not create

unfair competition during the advertising campaign … Advertising must not include misleading content, deceive or mislead consumers … Advertising proprietors and publishers must in accordance with the law, administrative processes and regulations refer to related documentary evidence, and verify the advertisements contents. Advertisements with false content or incomplete credentials are not allowed. Advertising proprietors must not provide design, production, agency service, or publish.’

In 1994, China issued the Foreign Trade Law which stipulated that:‘State implementation of a unified foreign trade system should work in

accordance with the law of maintaining equality in uncontrolled foreign trade. In order to promote foreign trade, the state should in line with the requirements of foreign trade development establish and perfect financial institutions that will support foreign trade, a foreign trade development fund, and venture capital funds.’

It is also required that ‘Foreign traders must run according to law and compete fairly during all trading activities.’ Another important part of the law underwent thirteen years of preparation and extensive discussion. In 2007, the Property Law was issued which established the principle of equality with regards to the rights of state, collective and individual property, providing equal legal protection for all of the main market players. It also stipulated that should individual rights be compromised, the rights holder can resolve them through reconciliation, mediation, arbitration, and litigation.

Along with the aforementioned succession of laws which were established with the aim of promoting the socialist market economic system, China proposed that the corresponding legal system should be relatively complete by 2020. It is worth noting that these laws successfully combined principles of a free economy with socialist principles, thus maintaining China’s fundamental socialist systems.

During the process of establishing a market economy, the Chinese Communist Party and Chinese government applied themselves to bringing about national economic stability and balanced development. It was unavoidable however that China would encounter some societal problems, the most prominent of which being the disparity between rich and poor. As this gap emerged and widened, it was obvious that China had failed to abide by its socialist ideals.

In addition to this disparity, unemployment also started to become an issue. In cities, the closures of failing enterprises caused large numbers of workers to lose their jobs, and the state could not undertake social functions, so as to take care of everything, as it had in the past under a planned economy. In rural areas, the

development of agricultural technology resulted in a reduction of labour required, and so tens of millions of agricultural workers had no choice but to move to the cities in search of work.

Uneven regional development has also emerged as a problem. East and south China have experienced much faster economic development than that in the north and west. Prosperous regions had incomplete policies in practice. Therefore, Deng Xiaoping’s proposition that ‘a section of society will become prosperous first’ did not turn out as it was expected, as the disparity between regions, living standards and income continues to widen.

The environment has become the victim of China’s economic development. Medium and large urban industries generated various kinds of pollution, and have severely contaminated the air and water. The excessive use of oil and coal, for instance, has begun to create a depletion of resources, and contaminated arable land, water resources, and forests.

Population problems have also emerged in China’s society. Mao Zedong’s era adopted policies which encouraged procreation, and even deemed it a ‘task for the revolution’. China’s population increased massively in the short period between 1964 and 1969 with a population growth up to 100 million, and by 1980 the total population had hit 1 billion. An enormous population placed a great strain on China’s economic formation, resulting in a vigorous enforcement of family planning policy. It was implemented through heavy penalties for couples who violated the policy. An employee from an institution, societal organisation, or enterprise who went against family planning regulations was not only subject to paying a fine, but would also result in their entire work unit being subject to administrative penalties or disciplinary punishment. Using the One Child per Household Policy, population growth was significantly decreased. However, this policy also brought about a number of negative consequences. For example, the proportion of the elderly population increased. In 2005, people over 70 occupied 10% of the population. Owing to the large number of households inclined to favour male children, the male and female population ratio is seriously imbalanced. Although only children tend to have improved opportunities, they are excessively mollycoddled and lack a collective perspective which is important for the formation of a rounded personality. The Chinese government is already aware of these problems, and has already started to allow two children under certain conditions.

Development and Adjustment

On 19th February 1997, Deng Xiaoping passed away at the age of 93. He established the national administrative system which ensured a smooth handover of power. Jiang Zemin became the core of the new leadership group. Naturally, following Deng Xiaoping’s era, Chinese politics underwent changes. The national administration’s reliance on the outstanding leadership of a single person was



modified into a collective leadership which is now the Political Bureau of the Central Committee with the General Secretary at the core.

The new collective leadership continued along Deng Xiaoping’s path of reforms, and strove to maintain China’s high rate of economic growth. Motorola and Boeing and large multinational businesses rushed to China. Chinese commodities went on sale in world markets, including the US market. Meanwhile, Jiang Zemin strove to resolve the negative issues which had emerged through the process of development, especially with regards to corruption.

For this reason, Jiang Zemin rethought the use of socialist ethics within a developing economy. In June 2001, the important ‘Three Represents’ were put forward. The intention behind them is as follows:

‘The party must always represent the development of its advanced productive forces in various fields of employment, in terms of its theory, guiding principles, and policies. It must strive to conform to the corresponding laws and continue to promote freedom and development in society, thus improving the quality of people’s lives. The party should always move in a direction that advances culture. The aforementioned theory, guiding principles, and policies for various kinds of work must look towards modernisation, international exposure, and a vision for the future. A socialist culture requires that the masses are engaged in science, and the promotion of ideological and ethical standards across the population. The continuous improvement of scientific and cultural quality will provide an empowering spirit and intellectual support. The Party will always work to expand the fundamental interests of the people whilst giving full play to the initiative and creativity of the masses. This will provide a foundation for continual development in which the masses can obtain economic, political and cultural benefits.’

There is no doubt that the Three Represents have a positive and strengthening impact on socialist ethics. From the late 1990s until the early 21st century, fast-paced economic development also brought about a consumer culture in which money was the important indicator of a person’s societal position. It was during this period that a number of serious cases of corruption emerged.

In 1998, Zhu Rongji appointed an investigative team whom discovered that between 1992 and 1997, 40% of the national grain purchase loans, totalling 200 billion RMB had been embezzled and diverted.

From 1997 to the first half of 1999, central and regional governments injected 48.8 billion RMB into a poverty alleviation fund. An auditing commission identified that 4.3 billion RMB had been misappropriated and emptied into illicit accounts, which accounted for 20.43% of the total fund.

In 2000, some officials, Fujian Province were found to have been participating in a smuggling network for the previous 5 years, and had smuggled goods worth 53 billion RMB, evaded 30 billion RMB of taxes, and created state losses totalling 83 billion RMB.

According to statistics, China’s loss of state assets between the start of reform and opening up, and 1997, exceed 600 billion RMB, which is equivalent to 19.5% of the state’s general financial revenue. The buying and selling of official positions started to increase, with bribery by officials seeking promotion.

Construction and engineering projects faced huge problems due to corruption. Many companies made huge profits and forfeited construction standards by using poor raw materials, and bribed those responsible in government departments to circumvent inspections. This has eventually led to numerous serious accidents such as buildings collapsing, creating both financial loss, and loss of life.

In addition to the ethical fight against corruption, China has adopted more rigorous punitive measures compared to that in Deng Xiaoping’s era. In July 2000, the National People’s Congress (NPC) Vice Chairman Cheng Kejie was executed for accepted bribes amounting to 41 million RMB, the highest level government official to receive the death penalty since the establishment of New China.

In 1998, Jiang Zemin decided to forbid the army from conducting business dealings so as to fight corruption, forcing them to pull out of commercial fields. Since then, involvement with trade, automotive production, pharmaceuticals, hotels, and various other industries and enterprises have been handed over to the government.

During Jiang Zemin’s era, China adjusted the balance of central and regional governments, and took back part of the authority given to regions during the reform and opening-up policy. Finance and taxation in particular were reverted back to the central government. Meanwhile, guidelines for the lending behaviour of banks were enforced, and the State Council’s Prime Minister, Zhu Rongji, assigned an investigative team to inspect regional credit and loans. These measures guaranteed that central governmental orders went unimpeded, and increased its fiscal income. Restricting the authority of regional governments also prevented or contained the emergence of regional corruption among government officials. With the strengthening of central power, central fiscal income increased massively. In 2000, central fiscal income had reached nearly 1.4 trillion RMB, a drastic increase on the mere 865 billion figure from 1997 when systemic financial and taxation reforms were implemented.

With regards to the economy, China’s reformed state-owned enterprises with the principle, ‘invigorate large enterprises while relaxing control over small ones’, ‘single out the best for support’, and ‘survival of the fittest’. The state focused its energy mainly on finance, electricity, rail-roads, aviation, communication and various other industries related to the national interest and people’s livelihood. Through merger and acquisition, over 100 large-scale state-owned enterprises evolved into industry bellwethers with special support of the state. These companies were able to compete with their rivals in more developed countries in the US, Europe, and elsewhere. The function of this policy was to cultivate a number of large enterprise groups, such as the famous Changhong who produce televisions, Haier Group who produce air-conditioners and refrigerators, and the industry leaders Baosteel Group who produce steel, Jiangnan Shipyard for shipbuilding, and the Founder Group for computer software technology. As small and medium-sized state-owned enterprises transitioned, their numbers dropped enormously.

In 1997, the Southeast Asian financial crisis erupted, and China responded by actively promoting exports and reducing interest rates so as to stimulate domestic



demand and the economy. By 1999, China successfully freed itself from the negative impacts of the financial crisis, and domestic economic construction steadily increased. This was actually beneficial overall to helping the Southeast Asian economy recover from an extremely tense situation. It must be mentioned that in stimulating domestic demand, China started encouraging individual home ownership. By the year 2000, house sales had reached 284 billion RMB, and the rate of home ownership exceeded 60%.

Along with separating government and enterprise, and other reform measures aimed at regulating government-market relations, restructuring of government administration became imperative. From 1998, China started to streamline government institutions at all levels, and by 2000 the workforce had been reduced by 50%.

The Future for the Chinese

In 2002, Hu Jintao became China’s new leader. He continued to intensify reform and opening up, and apply himself to resolving the negative impacts on Chinese society that had been brought about by economic development.

Hu Jintao paid close attention to the ‘disparities’ in Chinese society, that between rich and poor, between regions, and urban and rural. In 2005, the disparity of household income per capita between richest 10% of Chinese urban residents, and the poorest 10% was remarkable. The disparity between the level of development in the north, south, east and west of China was also increasing day by day. The disparity between rural and urban residents in terms of income, educational opportunities, and future development were also evident.

In September 2004, Hu Jintao convened the 4th plenary session of the 16th Central Committee of the CPC, and proposed the concept of a ‘Socialist Harmonious Society’, and shortly after in 2005 declared that it would serve as their main strategic mission in office. In October 2006, the 6th plenary session was convened; an explanatory speech was delivered regarding the document, ‘Decision of the CPC Central Committee on Certain Major Issues in the Building of a Harmonious Socialist Society’.

According to this CPC Central Committee’s explanation of this official document, a harmonious society should be one with ‘democracy and order, equality and justice, credit and friendliness, vitality and stability in which humans and nature have a harmonious relationship’. Whether resolving the disparities between rich and poor, regions, or urban and rural societal problems, building a harmonious society was always the most important end.

The guidelines for building a harmonious society involved strengthening its rule of law and socialist democracy. During economic decision making, it was required that adequate consideration be given to the rights and interests of the masses. Increasing employment opportunities, establishing and perfecting a social security

and public service system, and measures to improve people’s incomes would all be vital to improving people’s lives.

Of China’s 1.3 billion people, more than 900 million are rural, and so resolving poverty among rural inhabitants was a priority for building a harmonious society. From 2006, the Chinese government ended its 2000 year old agricultural tax, thus increasing the income of agricultural public service workers. Large-scale schools, hospitals, and agricultural extension service centre were also created.

By 2007, China’s ‘Three Rural Issues’- the village, farming, and agricultural workers- had received 400 billion RMB in cash injections. In 2006 rural areas in western regions were exempt from fees for compulsory education, a policy expanded to central and eastern regions in 2007. China, in addition to building a medical centre in every village administration, decided that rural residents should all benefit from a system of medical insurance, the majority of which would be financed by government. This greatly reduced medical expenses for rural workers.

In addition to the aforementioned preferential policies, the Chinese government also encouraged large state-owned enterprise and overseas investment into rural areas, and organised the more affluent eastern regions to assist the poor western provinces. More rapid construction of transportation infrastructure, connecting rural areas and cities, led to increased levels of employment, and improved income and living standards for rural people.

What is worth noting is that poverty was not the sole issue impacting China’s construction of a harmonious society, as corruption increased day by day. Hu Jintao believed that resolving and preventing corruption was of vital importance to the public perception of the Communist Party, so party members and leading cadres suspected of corruption regardless of their rank were subject to severe punishments. In 2006, the original CPC in Shanghai’s Municipal Party Secretary Chen Liangyu was suspected of corruption and expelled from the party. Following his dismissal from office, he was sentenced to 18 years in prison. Beijing’s former deputy mayor, Liu Zhihua who was responsible for the Beijing Olympics infrastructure, abused his power to profit from others, and received bribes amounting to 7 million RMB. In 2008 he was sentenced to death; a sentence carried out two years later.

Hu Jintao attached great importance to improving the quality of higher education as part of a strategy to strengthen the nation through talent and develop human resources. In recent years, the Chinese government has increased its support of education, and rapidly developed all levels from vocational to higher. The Chinese government in 2005 released the White Paper, ‘China’s Road to Peaceful Development’ which proposed that:

‘From 2006 to 2010, secondary school education had produced 25 million graduates, and 11 million from higher education institutions. By 2020, the gross enrolment rate into Chinese higher education will reach around 40%. Meanwhile, China will actively introduce various overseas talents, high level personnel in particular, to develop a powerful workforce of talented people, and provide favourable mechanisms and a social atmosphere that will give full scope to their talents. The guarantee of intellectual support of powerful talent will provide for the construction of a modernized country’.



The Pace of Political Reform

From 1978 onwards, China launched a number of economic and political reforms. Political reforms tended to err on the safe side. Voting mechanisms for instance were tested in a certain region before being proliferated nationally. It is worth noting that China’s ongoing reforms, regardless of whether they were political or economic were all adjustments and optimisations of an existing system, rather than a radical overhaul. Political reforms were derived from what was required to revive the nation, rather than from an ideology. China hoped that the masses would come together in moving forward with these reforms, and trusted that they would bring about positive changes in their lives.

From the outset of reform and opening up, Deng Xiaoping abandoned Mao Zedong’s ‘class struggle as the central task’ and ‘armed struggle’ in favour of opening its doors to the outside world so as to improve and strengthen cooperation with countries, including the West. China also started to reform their internal political mechanisms. For example, a highly centralised economic planning system was delegated to individual provinces, giving them power to make own decisions. In rural areas, the majority of the population had started to construct local-level democracies, and from 1987 the ‘Organic Law of the Villagers Committees’ was trialled. Previously, leaders of these village committees were appointed by the government. The new stipulation meant that the chairman, deputy chairman, and committee members of village committees were all directly elected by villagers. This grassroots rural democracy was tested over a long period before being proliferated. The ‘Organic Law of the Villagers Committees’ was only officially issued in 1998 after ten years’ worth of trials. After being revised, the law stipulated that the village committees must implement competitive elections with more candidates than those elected, secret ballots, and publicly counted votes, the results of which are immediately announced.

In addition to state administrative reforms, the Chinese Communist Party reordered their internal machine. As China’s ruling party, the CCP had only 57 members when it was initially established in 1921, rising to more than 85 million in 2012. In 1949 following the establishment of New China, the CCP managed state affairs and enjoyed enormous achievement, demonstrating how responding to requirements for development can bring forth new and innovative capabilities. Inevitably, there were nevertheless problems, leading to rapid adjustment in response. Meanwhile, there was a consistent emphasis on enhancing the capabilities of the cadres, who were regarded as the main players, carrying out established reform and development programmes.

Following reform and opening up, one key point for political restructuring was to ‘separate the functions of party and those of the government’. The government was responsible for the specific management of various undertakings such as the economy, society, and culture. The Party was in charge of political matters, such as political direction of domestic affairs, foreign affairs, the economy, defence, and any other major decisions implemented by the leader. The Party also made recommendations to government for the selection of important government cadres.

The CCP carried out the following internal reforms. Since it was set up as a principle that the Central Political Bureau should be supervised by the Central Committee, their authority was limited in the formulation of the regulatory framework: ‘Regulations for the Selection and Appointment of the Party and Government Leaders’, ‘Chinese Communist Party Supervision Regulations’, and ‘Chinese Communist Party Regulations on Organising Local Elections’, served to promote compliance within the party. It is worth emphasising that the Chinese Communist Party actively promoted democracy at all levels within the Party from the Central Committee to regional party organisations by implementing open and transparent competitive elections with anonymous voting.

Strengthening and improving ‘multi-party cooperation’ was an important part of its political reform. In 1978 following the implementation of reform and opening up, and a period of great suffering during the Cultural Revolution, China again reconsolidated to produce the ‘System of multi-party cooperation and political consultation under the leadership of the Chinese Communist Party’. The cardinal principle of this system was that the CCP served as the ruling party, but cooperated with various other democratic parties so as to develop a relationship of ‘established long-term coexistence, mutual supervision, sincere treatment of each other, and sharing joys and misfortunes’.

According to China’s constitution, the CCP is China’s ruling party and there is no opposition. Various democratic parties participle however, and enjoy political liberty, independence, and the same legal status as the Chinese Communist Party in terms of rights and obligations. Up to now, China has eight democratic parties which are as follows. The Revolutionary Committee of the Chinese Kuomintang (established in 1948 were originally the Kuomintang and other patriotic democratic personages), the Chinese Democratic League (established in 1941 who principally work on high level work involved with cultural education and science and technology, and an intermediate intellectual organization), China Democratic National Construction Association (established in 1945, mainly personages in economic circles), Chinese Association for Promoting Democracy (established in 1945, consisting of high and mid-level intellectuals that work in education, culture, and publishing), and the Chinese Peasants’ and Workers’ Democratic Party (established in 1930, mainly comprised of high and mid-level intellectuals in areas of pharmaceuticals and health), China Party for Public Interest (established in 1925, mainly consisting in middle and upper-level returned overseas Chinese and their relatives), Jiu San Society (established in 1945, mainly consisting in high and mid-level intellectuals in science and technology), Taiwan Democratic Self-Government League (established in 1947, consisting mainly in prominent people from Taiwan or of Taiwanese heritage, now residing on the Mainland). Looking at the history of these democratic parties, we can see that during the War of Resistance against Japan, as well as the KMT-CPC civil war of liberation, there was a gradual formation, development, and long-term cooperation with the CCP. Following reform and opening up each democratic party was actively involved in various political activities with many becoming NPC or CPPCC members, as well as holding leading positions within all levels of government.



In addition to the active participation of these democratic parties in the administration and discussion of state affairs, public members without party affiliation were also allowed to participate in political activities. Many joined the Chinese People’s Political Consultative Conference (CPPCC) and the NPC, and held important posts in government. In 2005, the Chinese Communist Party issued the ‘CPC Central Committee views on the further strengthening of multi-party cooperation and political consultation under the leadership of the Communist Party of China’s Construction’, and explicitly stipulated that democratic parties and unaffiliated members across different levels amounted to no less than 60%, and 65% in the CPPCC. In 2007, unaffiliated member Chen Zhu became the first non-communist party member to become a government minister.

Balanced Development of the Military and Economy

Developing national defence was one of the important targets among China’s reform and development processes since the 1970s. Applying reforms has lifted their international position, and served state interests as demanded by the people. The concept of development was on a full-scale with national defence among its core elements. National defence not only safeguards a nation’s economic security, but can also effectively prevent foreign intervention, and attacks from separatist forces.

Since the PRC was initially established, the army has always played an important role in the state’s development process. In the 1950’s, the Chinese People’s Liberation Army with the support of the Soviet Union evolved to become regulated, professional, and equipped with excellent arms. In the 1950s and 1960s, they participated in a number of large scale wars such as the Korean War between 1950 and 1953, and the China-India border conflict in 1962. In 1954, New China completely revised its blueprint with the ‘Four Modernizations’ in which the military was a part.

In 1979, following the final month of the Sino-Vietnamese border-conflicts, Deng Xiaoping set about reforming the army. His principle was ‘quality’ not ‘quantity’. With this guiding principle, China began grading and reducing the numbers of military personnel.

Great importance was attached to providing military training so as to cultivate modern well-rounded and talented military personnel, with a scientific and artistic appreciation, with rich knowledge of politics and the military. Strong technological expertise and public administration skills were also important so as to shoulder the weight of any number of leadership positions.

In addition, China applied itself to independent development and modernising its weaponry focusing on, naval vessels, intercontinental nuclear missiles, satellite weapons, electronic warfare, and new types of warplanes.

In terms of organisation, the Chinese People’s Liberation Army consisted in a ground force, the navy and air force as well as the strategic nuclear force, the Second Artillery Corps. China joined the ‘atomic club’ early on, and in 1964 proceeded with its first round of nuclear testing. The highest military organ leading China’s armed forces was the Chinese Communist Party Central Military Commission and the People’s Republic of China Central Military Commission, not the State Council.

During China’s process of opening up, the Chinese People’s Liberation Army actively participated and launched comprehensive and multi-layered military diplomacy. As of 2012, it had already established militarily relations with more than 100 countries. High level reciprocal visits are held at regular intervals for personnel training. From 1990 to 2012, the Chinese army dispatched thousands of peacekeeping soldiers to participate in 22 United Nations peacekeeping operations.

In addition to annual joint military exercises with Russia which were launched in 2005 code-named ‘Peace Mission’, China has a number of other joint military exercises with countries sharing regional security issues, such as with Tajikistan which was launched in 2006 and code named ‘Coordination – 2006’, and an anti-terrorist military exercise with Pakistan code-named ‘Friendship – 2006’.

China and the member states of the Shanghai Cooperation Organization (SCO) have tight military relations. The SCO’s predecessor, the ‘Shanghai Five’ was comprised of China, Russia, Kazakhstan, Kyrgyzstan, and Tajikistan. In 2001, this mechanism became the SCO, and Uzbekistan was included. Its purpose and task was to strengthen border regions and mutual military trust which was extended politically and economically. Each country also hoped that strengthening cooperation was the answer to the war in Afghanistan following the US’s continued military presence in Central Asia.

From the late 1990s, China required that the army suspend its involvement in numerous commercial fields which included foreign trade, real estate, and hotels. This was put into effect with the intention of promoting military professionalism and expertise. Also, due business enterprise being subordinate to the army, generals and senior officers had become immersed in hotbeds of corruption. National army and senior government leaders were resolute in wanting to resolve this problem once and for all. In 2008, the Central Military Commission issued ‘Establishing a sound system for punishing and preventing corruption in the military 2008–2012 Work Plan’ which was aimed at advancing the construction of military anti-corruption regulations, important for developing the military and providing strong and powerful disciplined support and a political guarantee.

From 1992, China’s military implemented a manned space program. On 15th October 2003, China launched a manned spacecraft for the first time, ‘Shenzhou 5’ taking astronaut Yang Liwei into space. The vessel orbited the earth 14 times in less than 21 hours, and soon afterwards made its voyage home, successfully landing in Inner Mongolia. This launch marked China as the third nation to send an astronaut into outer space after the Soviet Union and the US. In the following years, China’s



manned space program steadily pushed ahead. In 2005, China launched the manned spacecraft ‘Shenzhou 6’ which carried the two astronauts Fei Junlong and Nie Haisheng 343 kilometres into outer space, at a speed of 7.8 kilometres a second, and orbited the earth in 5 days. The two astronauts’ re-entry capsule entered into an orbital module, and the astronauts carried out a series of scientific experiments. On 25th September 2008, China succeeded in launching ‘Shenzhou 7’, which carried three astronauts, Zhai Zhigang, Liu Buoming and Jing Haipeng. This launch was the biggest so far, as Zhai Zhigang became the first Chinese person to do a spacewalk, making China the third country to master such technology. On 1st November 2011, Shanzhou 8 smoothly blasted off, and Tiangong 1’s target aircraft proceeded with space docking, a marked breakthrough for China, which had successfully assembled and operated the first series of key technologies. On 16th June 2011, Shenzhou 8 carried three astronauts into space, and succeeded in docking with Tianging, establishing China’s outer space presence. Before these manned launches, four unmanned flights; Shenzhou 1 in November 1999, Shenzhou 2 in January 2001, Shenzhou 3 in March 2002, and Shenzhou 4 in 2002 had been sent into space.

In addition to launching a manned space craft, various satellites for communications, maritime, meteorology, and space detection were also launched. The majority were independently researched and developed by China with a few commercial satellites by foreign entities. As everyone knows, China’s first satellite, ‘The East is Red’ (Dongfanghong) launched in April 1970.

As China’s space program is run predominantly by the military, some large countries, especially the US, were wary, despite China stressing that its space program was peaceful, and for civil use.

China’s Non-Conformist Development

In the 30 years since 1978, social development and national rejuvenation had relied on a foundation that was being constantly adjusted and improved. Development and rejuvenation profited from Deng Xiaoping’s first series of development theories, and the concept of a harmonious society, both of which were put into practice.

‘Adjustment’ is the essential feature of China’s reform process. ‘Fantasy’ is viewed as having no value, whereas ‘results’ are paramount. In early 1978, Deng Xiaoping proposed that ‘Practice is the sole criterion for testing truth’. China wasn’t constrained by the consecrated dogmatisation of Marxist, Leninist or Maoist though. The nature of Deng Xiaoping’s socialist market economic theory allows for ongoing adjustments and perfections, and even large changes, when necessary.

The intrinsic quality of ‘Socialist Market Economic Theory’ is that it gives way to the positive aspects of socialism and capitalism so as to promote the development and advancement of the economy and society. Within China’s reform process, this theory has been constantly adjusted, but has provided a series of fundamental

principles for China’s ongoing economic development. For instance, insisting on public ownership and giving play to state regulation so as to reduce disparities in regional development. Owing to state adjustments, the redistribution of national income has countered further widening of the disparity between rich and poor. Of course there is some content which can seem vague, but in practice this is so that the future can enjoy scope for further adjustment. Adapting to development requirements and resolving problems that may emerge at different points in time serves to realise the most important objective: rejuvenating the Chinese nation. It should be noted that socialist market economic theory was put into practice in 1992, and formally established 14 years after reform and opening up. Deng Xiaoping hoped that this theory could be used as a guide for future collective leadership, and safeguard the achievements of China’s development.

China’s course of development has abided by a number of principles which can be summarised as follows.

1. The developmental process gives way to both the good qualities of capitalist liberal economic systems and to socialist mechanisms. If capitalist systems uphold freedom of thought, encourage creativity, and respect labour, and the socialist system places emphasis on fairness in society and provides equal opportunities, and strives to maintain social stability to realise the highest state interests.

2. Cautious implementation of new theories. Firstly, a region must pilot new theories, which can be expanded once they prove successful in practice. If they are not successful, then impact will be accordingly limited.

3. Adhering to practice as the sole criterion for testing truth.

4. So as to prevent the escalation of corruption, bribery and fraud, giving way to the function of law as well as formulating a code of ethics is necessary.

5. The Communist Party’s core governing idea is to realise and maintain the interest of the people, and persist with advancing the construction of the party ideology. This will ensure that the party is always consistent.

6. Strengthening the state in social undertakings, especially in helping the under privileged overcome poverty, by developing social programs as well as developing the economy and other important responsibilities.

7. While promoting the economy and ideological freedom, always maintain the state’s authority and maintain state supervision in the economic development process.

8. So as to maintain social unity, stability and harmony, it has been clearly stated that part of this process will involve a portion of society becoming prosperous first.

9. By extending an open approach to the outside world, all development experiences and achievements will have been derived, whilst paying attention to the local culture passed down.



10. While striving to improve people’s livelihoods, close attention is paid to meeting the spiritual needs of the people. Active prevention of money worship will reduce its negative impact on society and people’s values.

11. When formulating and implementing a work plan, emphasis on the limitations of targets, distinct procedures and timely appraisals will enhance people’s confidence in the governments work.

12. Looking back on the cogs that formed history, without denial, will allow experiences to be positively absorbed and learnt from.

13. A foundation of sufficient research can provide government reforms with a clear direction, and ensure their smooth implementation.

14. While maintaining a democratic spirit, any attempt to destroy the state’s great undertaking will be strongly opposed. Foreign political interference and internal hostile forces are certainly not be tolerated.

15. National defence serves as a guarantee to powerfully safeguard national revival, the strength of which should be developed from weaponry and organisational construction and a spirited belief in developing its strength.

16. Devotion to safeguarding independence and territorial integrity, with an openness to all kinds of solutions even if they run contrary to traditional methods.

17. Actively maintaining world peace, and contributing to the development of all people.

Although China has abided by the aforementioned principles, they have not been turned into an ‘ideology’. It can be said that through this process of development and revival, China has taken an extremely prudent approach to ‘ideology’ regardless of whether socialist or capitalist. China has bridged socialist stereotypes, and as part of the development process, has proceeded with timely self-reflection and appraisal. In the mid- 1990’s, a liberalist trend emerged in China where the role of the state in societal development began to weaken, as the economy became less restricted and regulated. China responded to the problems that emerged by adjusting its policies and maintaining a course along a middle road that ensured market economics had socialist properties.

China’s reforms have progressed, although they have always faced criticism from the left wing, and from liberalists. China taken a pragmatic and logical approach to resolving its ideological problems, and in fact has not encountered any significant difficulties. A series of economic figures indicate that China has made genuine achievements in development.

Each stage of development is opened up for discussion as to the states guiding ideology. It can be said that without controversy, disagreement, and diversified

opinions, China could appear uncontrollably opportunistic, or as having a solidified ideology which is unable to adopt an effective and practical development model.

It must be noted that China’s pragmatic development strategy doesn’t give the reform course cause to rest, as its main objective is to bring about a great rejuvenation for the Chinese nation. Reform is little more than a means of realising this revival, with the ‘revival’ being the sole belief which doesn’t allow for deviation, change, or adjustment.

In short, pragmatism is essential to China’s road to revival. Supposing China does not adopt this continuous development, and instead changes its strategy in the event of an array of different problems that emerge at different times. It would be at a complete loss as to what to do, and unable to continue its rise. The Cultural Revolution is a good example of how ideology is able to overpower state interests.

China’s ‘non-conformist’ development model works on the premise that developmental processes cannot follow a fixed or sanctified model when formulating a measure or plan.


2

Lessons Arab people might learn from China’s ‘Non-Conformist’ Development

The Scope of Reference

Looking at civilisation from all angles, it is not reasonable to use China’s revival as a measure for the Arab World due to their major differences. The most significant being that China is a single sovereign state and the ‘Arab World’ is not. This so called sovereignty means, firstly that one nation can independently control its resources. Without such control, there is no way of realising true independence, which is exactly what has been missing since the Arab World broke free from colonial rule. Putting it this way is not to start discussion about the establishment of a single Arab state, and is not to refer back to the old topic of national unity. However, following the Second World War, Arab people have continued to lack coordination for formulating decisions and objectives even at the working level.

In the event that everything might fall apart, taking a look at China’s non-conformist development for reference to the Arab situation, is a practical proposition. Although Arab states lack the means of acquiring various capabilities-such as military might and international influence- they might nevertheless look towards and see how China is organised and how its economic developmental history might be used as a point of reference. Realising an Arab revival requires that individual Arab states with quantities and varieties of resources are subject to limitations, so that the Arab World as a whole is in a position to launch investment cooperation and optimize the allocation of resources to realise economic development. In fact, China also dealt firstly with the economy, and used economic development as a means for a complete revival.

Learning from China’s economic development need not infer overlooking its overall aims, nor that Arab people wish to achieve the same overall results as China. On the contrary, for the past two centuries Arab people have harboured their own dream for revival. If Arab people under present conditions are still unable to realise this dream, then they must strive to create conditions which effectively facilitate sovereignty.


The foundation of China’s non-conformist development is freedom of choice with regards to reforms. The ultimate objective to realising a revival is constant and unchanging, according to the conditions of each development phase. However, each mechanism or plan allows for pragmatic modification and adjustment. If you say that a major characteristic of development without dependence is independent decision making, then this is certainly embodied in China’s freedom of choice. China’s non-conformity and development without dependence is a great achievement, and it is these experiences Arab people can learn and take reference from. There are many commonalities between China and the Arab World with regards to their problems encountered in development and revival. China remains a developing country, but when it was first established its economy and society were lagging in a way very similar to Arab countries. In addition, both China and Arab countries share an Eastern societal and cultural identity, as well as an abundance of natural resources.

In general, development without dependence is a comprehensive development process for a civilisation, the core principle being that a single state can rely on its own natural and human resources to prosperously develop. Of course, pursuing development without dependence is not to deny any existing process involving foreign dependency, or to call upon states to isolate themselves from the world and not participate in integral processes. What needs to be emphasised is that foreign reliance is what causes a civilization to lag behind. Less developed countries, freed from the rule of developed colonialists, may continue to have relations, but they generally involve the latter obtaining various industrial raw materials from the former, and then going on to produce finished manufactured goods. This phenomenon of ‘relative costs’ and what is said to be the ‘international division of labour’ is explained as follows:

The emergence of international trade is due to variations in price between products and countries, and if a country produces with comparative advantage due to reduced production costs. This way, when proceeding with trade between countries, it can enjoy a comparative advantage with is to everyone’s benefit.

According to this point of view, developing countries should specialise in the export of natural resources, and developing countries in the export of manufactured goods.

On account of the existence of such an irregular relationship, developed countries endeavour to maintain their position as beneficiary, prolonging the reliance of the developing countries upon them. The economic layers are straightforward; developed countries control the surplus labour of less developed countries. Trade levels involve less developed countries engaging in foreign trade which is dependent on developed countries. At the level of finance, the capital from developed countries is required to control the banking systems of less developed countries, thus hindering less developed countries from implementing credit policies to drive production. Technological levels involve less developed countries needing developed countries to introduce various kinds of technology. These factors have resulted in less developed countries being unable to make independent economic decisions or achieve independent development.

In addition, foreign reliance on less developed countries gives rise to a hierarchy of vested interests. This type of situation is further exacerbated by the to which less developed countries are dependent on developed countries, causing them to lose out on development opportunities, further impeding their revival. Developed countries have no desire for less developed countries to rise, as they would be no longer able to profit from this ‘irregular relationship’.

Realising economic development without dependence requires the intervention of state power, and the formulation of economic decision making so as to prevent foreign capital forming tight relations with government departments. Of course, the state should differentiate instructional intervention from strict overall governance, since the latter could throw up obstacles, with investment being blocked, itself impacting development.

What needs mentioning is that the tide of economic globalisation in the early 1990s, and the process of ‘integration into the world economy’ in reality only strengthened irregular economic relations between countries. Developing countries that have received investment from developed countries and chosen to integrate into the global economy have in fact only extended their dependence on developed countries. The ‘interdependence’ between developed and developing countries results in a relationship which favours the developed countries, as they have more command over the nature of the cooperation, conditions and boundaries. Thus, the effort developing countries are making to integrate into global economics is in fact working in contradiction to their own development objectives. This has harmed the interests of people from developing countries who endure lower living standards compared with developed countries. In addition, developed countries have the resources to promote their higher quality products and services to developing countries which they have no choice but to accept.

In this context, states striving to realise development must adopt certain steps to regulate and control domestic production, and satisfy domestic demand so that their people can dispense with the imported products on which they are dependent. Economic globalisation requires ‘structural adjustment’, which means that states are required to relax their controls in various aspects such as production, fixed pricing, foreign trade, and foreign capital. A ceasing of state subsidies and privatization policies means that the state must forfeit its right to economic management in favour of the market. This creates further pressure on developing countries. Of course, the nature of ‘structural adjustment’ is not absolute, as developing countries can issue compensation and enact protectionist policies for their societies and national industries, thus reducing negative impact in the service of its national development. In truth, these globalisation regulations that other countries are forced to abide by only serve to maintain the economic structures and development orientations of developed countries. The main reasons for associations with other countries are to serve their own needs. In short, regardless of whether a state decides to integrate or reject globalisation, they must guide their economies through instructional intervention, in order to realise development.

Lessons Arab people might learn from China’s ‘Non-Conformist’ Development 51


Developing countries have the typical characteristics of agricultural-based societies and in order to develop independently, agricultural production must first be expanded so as to produce enough to satisfy the demands of their domestic market rather than depending on imported products. They should adjust their monetary policy by establishing an efficient state financial structure and currency reserves which can be used for productive programs. It is necessary to control natural resources, as independence is decided by how resources are used, and create conditions that will propel the country’s technological advancement. Following this, the country must again survey its past decisions, and make corresponding adjustments. If they have failed to develop for the benefit of society, experienced an emergence of polarization in the hierarchy, or any other negative issues that can arise as a result of development such as corruption, then these issues must be resolved.

In short, if the aforementioned steps are followed as a course for development, this means that the country has found a distinct development path that suits its own national conditions. This does not require blind imitation of another state’s development model, or a rigid adherence to a fixed ideology.

The Arab World’s ‘Development of Dependence’ Predicament

The fact that the Arab World has always depended on Western countries economically as well as in other fields is an objective reality. However, there are variables which affect the degree of a country’s dependence, such as the duration of Western occupation as well as the way in which resources were seized over different periods of time in different regions. For example, western countries brought capital rather than colonialist troops to Egypt and Tunisia, but were then quick to protect the interests of their expatriates as a justification for invasion. A number of countries such as Algeria had coastal cities which were modernised in accordance with European models, although its inland and rural areas continued to develop following a traditional course. The traditional economic model of the Gulf States only changed after oil was discovered, and colonial countries satisfied their practical interests by building garrisons which stretched as far as Iraq and the Sham region. In these cases, Western countries also initially brought capital before dispatching colonial troops and arms to occupy. These countries in truth were established to benefit western countries between which confidential agreements were signed commencing economic dependence.

The degree of dependence Arab countries have on Western countries is also related to their level of productivity, foreign relations, and social stratification prior to colonialization. In some Arab states, foreign capital was directly controlled by foreign trade, and some countries were flooded with a ‘comprador class’ which provided foreign capital services.

Countries such as Egypt, Syria, Algeria, Iraq, and Libya underwent a process of nationalisation following independence, which strengthened their central planning

but weakened the position of foreign capital in their economies. The establishment of state-owned economies built a foundation for an independent economy and a solid industrial foundation which replaced imports. Other countries failed to adopt such measures or continued their dependence on foreign capital and market mechanisms, thus placing priority on developing the private economy. Regardless of whether this is due to internal management, or Israel’s standoff creating and the enormous burden on productivity, the implementation of central economic planning is not enough to allow these countries economic independence. Following this, some countries (such as Egypt) have again revaluated their economic development path and began to depend on foreign investment, liberalised their economy from state intervention, and implemented industrial policies that encouraged exports. Countries without regulated economic policies (for instance, Iraq before its US occupation in 2003) signed agreements and contracts with other countries forming tight relations with foreign investment, and further deepening their reliance. States dependent on oil exports benefited from rises in oil prices from the 1990’s, but these countries invested this money abroad, therefore further magnifying foreign reliance. In short, all Arab states rich and poor have economies that to some extent involve development with dependence.

Countries can use certain indicators to measure their degree of economic reliance, for example the ratio of their gross exports with GDP. If a country’s gross export is proportionally large compared to GDP, this can account for dependence on other countries and drive to produce. Other countries can directly influence the development of a country depending on the concentration of exported products. If a country mainly exports one or a number of products, then there is little possibility that this country will be able to develop economic independence. There are other additional indicators such as the ratio between the total value of exports and imports, and the degree of commodities exported to one or a number of countries. There is also the ratio between foreign investment and the total investment in society, the concentration of foreign investment in industry, the amounts invested by the principle countries, the revenue reductions enjoyed by foreign enterprises, and the proportion of revenue paid to the occupying countries. These numerous and complicated indicators stress that the major factor influencing the independence of a state’s economy is foreign reliance, and how easily they can get rid themselves of it.

Little research has been conducted that assesses the degree and implications of foreign dependence in the Arab World. However the findings are a good place to start for conducting a preliminary analysis. Hereon, we reference research conducted by Egyptian economic scholar Ibrahim Al Issawi, whose collaborative research with the Centre for Arab Unity Studies and the United Nations University developed part of the research project, ‘A New Future Arab Model’. Professor Ibrahim Al Issawi selected the Arab World’s three most representative countries geographically from west to east (Algeria, Egypt and Saudi Arabia), and conducted a qualitative analysis which revealed the degree of economic foreign reliance during the period after independence to the end of the Cold War. In the following table, ‘0’ represents economies without any foreign dependence, ‘100’ represents economies with



complete foreign dependence, ‘45’ is a demarcation point between economic foreign dependence and standard foreign dependence, ‘28’ is the demarcation point between economies with no foreign dependency and economies with standard economic foreign dependency.

Chart 1: The degree of economic foreign dependency in Algeria, Egypt, and Saudi Arabia

Algeria Egypt Saudi Arabia

Index Time Index Time Index Period

54 Before 1957 43 Before 1974 38 1952–1956

39 1957–196747 1974–1980

44 1957–1973

37 1968–1973 46 1974–1980

40 1974–198046 After 1980 42 After 1980

46 After 1980

Chart 1 presents how the economies of Algeria, Egypt and Saudi Arabia have been dependent to at least a standard level for a considerable period of time. It is worth noting that Saudi Arabia is the largest producer of oil in the Arab World, and has always maintained a high level of foreign dependence.

Economic foreign dependency is the most important factor influencing whether a state can achieve independent development. Of course, other fields of foreign dependency also impact on a state’s development. Extended periods of foreign dependence which cannot be relinquished make formulating accurate plans impossible. What needs to be emphasised is that the foreign dependence of Arab states is not only limited to the field of economics, but also visible in various other aspects such as politics, culture, military affairs, technology, food security, and foreign relations. Chart 2 presents Professor Ibrahim Al Issawi’s analysis of Algeria, Egypt and Saudi Arabia’s degree of overall foreign dependence in different fields.

Chart 2: The degree of overall foreign dependency in Algeria, Egypt, and Saudi Arabia

Algeria Egypt Saudi Arabia

Index Time Index Time Index Period

49 1952–1956 50 Before 1965 62 1952–1956

44 1957–1967 44 1965–197366 1974–1980

47 1968–1973 49 1974–1980

54 1974–198046 After 1980 64 After 1980

56 After 1980

Chart 2 not only shows that the degree of overall foreign dependence is relatively high, but also highlights this problem is due to a high level of economic foreign dependence. In other words, the degree of foreign dependence in the non-economic fields for these three countries is far more serious than that of economic fields alone.

There is a close relationship between the backwardness and the degree of foreign dependence, revealing that it has not only impeded an Arab revival but also impacted the potential developmental benefits that should be afforded to individuals and society. Research has already indicated that foreign dependence is closely related to stagnant economic development and an unfair distribution of people’s incomes. Therefore, we believe it is not difficult to understand why the Arab World with its abundance of resources has always faced low levels of development in productivity as well as the weak operational abilities of political, economic, and social institutions. These problems have rendered a slow pace of the Arab World’s long-term development in the world.

Economic research on per capita income is often used to measure a country’s developmental achievements, and even holds it the main (and sometimes only) factor indicating a country’s level of development. Booming oil prices from the early 1970s until the end of the 20th century resulted in a 1% increase in Arab countries, which was inferior to the global average of 1.3% over the same period. Among oil producing countries, per capita income has only increased annually by an average of 1.3%, and non-oil producing countries by 1.73%. In 1995, people from Arab states had an average income of $2,221 which increased slightly to $2,465 by 2001.

Other economic indicators in Arab countries show a similar situation. From 1975 to 1998, GDP in Arab countries increased from $256.7 billion to $445.7 billion, which is an annual average increase of 3.3%. Although this exceeded global averages of 2.9% over the same period, it is mainly due to rising oil prices and not a development in productivity. Therefore, the increase in overall GDP for this period is attributed to the comparatively small populations of oil producing countries. However, 85% of the Arab World’s population live in non-oil producing countries, so either their GDP experienced negative growth, or the growth rate was insignificant. It is also worth mentioning that the population of Arab states increased at a rate of 2.8%, which hindered the positive effect of economic development from being presented in the per-capita income figures.

In terms of the fair distribution of income, the United Nations Development Program in 2008 published the ‘Arab Human Development Report’ which pointed out that tight social relations in Arab states meant that the coverage of charitable activities was broad, and that unfair distribution of income wasn’t as severe as that in other developing countries. However, at the same time a mass of data indicates that this problem is worsening. According to data published by the Economic and Social Commission for Western Asia, from the early 1980s until the early 90’s, the wealth of the richest segment of cities in Egypt occupied 27% rising to 28% of society’s total wealth. The richest segment of people in agricultural regions occupied



21% of society’s wealth which rose to 28%. From 1986 until 1992, 25% of the Jordanian population were of a low income and disadvantaged segment of society occupying 7.3% of societies total wealth which went down to 6%. In Yemen, the income of rural families amounted to 64% of that in cities.

To sum up, it can be observed that Arab countries have not developed as much as they should have, and foreign dependence without doubt is a major reason.

China’s Experience

Certain conditions will affect a country’s ability to create balanced development without dependence, for example the national territorial area, geographic location, population, natural resources, national culture and social integration.

Without a doubt, China has all of the aforementioned conditions. China’s territory of 9.6 million square kilometres includes Taiwan, Hong Kong and Macau. China occupies a territory of 9.6 million square kilometres, and more than an 18,000 kilometre of coastline running north to south which borders the coastal waters of the Bohai Sea, the Yellow Sea, the East China Sea, and the South China Sea. The national border is more than 22,000 kilometres which is shared with North Korea, Russia, Mongolia, Kazakhstan, Kyrgyzstan, Tajikistan, Afghanistan, Pakistan, Bhutan, India, Nepal, Burma, Laos, and Vietnam. With the exception of Russia, all other countries are smaller in area than China. The Chinese population in the late 1970s stood at nearly 1 billion people, which had reached 1.35 billion by 2012. China is rich in minerals such as coal, oil, phosphoric acid, salt, iron, titanium, tin, lead, nickel, copper, aluminium, gold, and silicon. It benefits from multiple climates and territory with great rivers. China is rich in rice, sugarcane, citrus, and various other agricultural products, and an abundance of wildlife. Of course, China is also deficient in some resources such as fresh water, and arable land which stands at only 10%.

New China has always attached great importance to development without reliance from its very inception. During the years following China’s close relationship with the Soviet Union in the late 1950’s, great effort was put into self-reliant development. Of course, as this chapter refers, China has achieved a great deal in terms of development since the 1978 reform and opening-up policy was implemented. China has gradually perfected its socialist market economic theory, and the important concepts such as the ‘Three Represents’ and the construction of a ‘harmonious society’ have led economic development.

Socialist market economic theory was founded on a development path that was different to any other economic development theory, known as ‘Socialism with Chinese Characteristics’. The ‘Chinese characteristics’ expressed how China’s position in the market economy was distinctive. Its specific circumstances and requirements have been set out, and are not rooted in any dogmatic ideology. At the same time, just as this book has repeatedly mentioned, this theory can be continually adjusted and perfected as is required in practice.

In 1978, China formulated a completely new development strategy which set out a course for independent economic development. Through this chapter, we can look back on how China’s rise came about, and how it strove to become an independent developing country. China has completely established a development program in which policymakers can effectively guarantee each stage of its development direction. From 1978 to 1988, China avoided foreign dependence by developing production. This single policy not only effectively accelerated agricultural development, but also met domestic consumer requirements for agricultural products. Meanwhile, various industries enjoyed technological innovations which established a good foundation for the early phase of reforms, the Four Modernizations. Developments benefited all members of society and adjustments were made to policy along the way so as to reduce disparities in income between urban and rural, and rich and poor. In 2006, the concept of a ‘harmonious society’ was introduced whilst continuing to eliminate the negative impacts of development, especially with regards to corruption.

The turn in China’s economic development did not really begin until the 1990s with the tide of economic globalisation, but it was in fact as early as 1978 that China really began to integrate into the world economy. China placed great emphasis on attracting foreign investment and developing trade so as to benefit domestic economic development and also accelerate the flow of capital and power into China. This helped China become influential and attractive in economic fields, and thus increasingly important in the international political arena. During integration into the global economy, China always held on to the single principle of maintaining its own interests. For example, it always exercised strict control over its RMB exchange rate, thus protecting the price of its products on the international market, as well as keeping China at a manageable distance from the global market.

China’s economy is full of life, but integration into the global economy has been relative and selective. Their relationship has been ‘interdependent’, rather than ‘unilaterally dependent’ as with weak economies. Among the countries that have economic relations with China, there are those with great power, particularly the USA. These major nations need China, and China needs these major countries. This type of relationship and participation in globalisation has become a natural choice for China. China’s participation is best illustrated by its entrance into the World Trade Organisation (WTO) in 1995, which it hoped would give full play to its export capabilities by taking advantage of the WTO’s free trade mechanisms for accelerating domestic economic development, and attract more foreign investment. Owing to US obstructions, China did not formally ascend into the WTO until 2001.

What is worth noting is that China’s reforms were structurally adjusted selectively for economic progression. Although China strove to give full play to market mechanisms, it has sufficiently considered globalisation’s historical background as well as international economics, and the requirements proposed by financial institutions. However, China’s economy has always been steered by the state to



serve the requirements of its integral development. For example, China has improved the competiveness of its commodities on the international market by supporting private enterprises with financing, and helping them reduce their production budgets and commodity prices so as to compete against the US, Europe, and Japan. Although it came under enormous pressure from other countries, China still supported private enterprise. In response, the US repeatedly protested to the WTO, who criticised China for subsidising the exports of private companies. In 2007, the US made its third official complaint to the WTO protesting that China provided support to parts of its enterprises which they believed was in violation of the WTO’s fairness principles thus requesting that China immediately end its subsidies. In response, China lodged a complaint with the WTO in 2008, opposing US restrictions on imported Chinese products into the US market, and the adoption of anti-dumping measures. This China-US game is in fact reflected in China’s formulation of independent economic policies, and illustrates how state sovereignty should be the foundation for realising independent development. Only by doing so are a state’s interests guaranteed, and the state benefit from global economic development, rather than the benefits going to rivals.

As previously mentioned, from 1978 China gradually integrated into the global economy. Doing so attracted foreign investment, developed foreign trade, and strengthened contact with various countries in the world whilst always maintaining independent economic decision making. Of course, this is not to suggest that the Chinese economy prior to reform and opening up was dependent on foreign powers, or that China hoped that reform and opening up would alter this situation. There is no need to argue that China originally hoped to alter foreign dependence through this policy. We are only concerned as to whether China’s non-dependent development was successful, and whether there are cases that Arab countries can reference, so as to rid themselves of foreign dependence.

Data related to China’s economy (please see part 2, charts 5 and 7 related to structural adjustments and economic data) makes clear that their economy is in the process of taking big strides down the path to success. Of course, for any development models to be successful requires time, and China is very level headed in this knowledge. For this reason, China will have become an affluent society by 2020, and reach the level of moderately developed countries by 2050.

As previously mentioned, per capita income is an important indicator of economic development, and from this we can see that China has also been successful. From 1978 to 2012, per capita income increased by approximately 13%, which was apparently higher than the global levels of the final quarter of the 20th century of 1.3%. Although the growth rate has been relatively large, the size of China’s population has meant that the per capita income compared with global levels is still relatively low. In 2012, China’s per capita income was ranked at 107 in the world, so it is inappropriate to compare this with China’s enormous economic aggregate. Chart 3 shows China’s increase in per capita income between 1978 and 2012.

Chart 3: Per Capita Income in 1978 and 2012.

Year Rural Per Capita Income (RMB) Urban Per Capita Income (RMB)

1978 134 343

2012 7,917 24,565

The aforementioned data indicates that China has developed enormously, and effectively improved living standards. However, it remains to fulfil its ambition in becoming a harmonious society, and the hoped for all-round wellbeing. It also has not yet resolved rising disparity between incomes.

In conclusion, many of China’s development achievements can be used for reference. However, we cannot help but ask if the Arab World has the conditions to learn from China’s experiences of non-dependent development? There are five indicators to reference; national territorial area, geographical position, population numbers, natural resources, and the national culture and social integration.

Factors Referenced

In terms of the five aforementioned indicators, the Arab World enjoys favourable conditions, which could be said to be even better than China. For example, the Arab World has an area of 13.6 million square kilometres, which occupies 10.2% of the world’s surface. It stretches from Mauritania in the west to Oman in the east which amounts to 1/6 of the world circumference. The Arab World stretches across both Africa and Asia, of which 72% is in Africa and 28% in Asia. Its position is advantageous and it has become a continental centre. The Arab World is surrounded by five bodies of water. Namely, the Mediterranean, the Red Sea, the Arabian Gulf, the Atlantic Ocean, and the Indian Ocean. It borders twelve countries; Iran, Turkey, Niger, Mali, Eritrea, Ethiopia, Chad, Central Africa, the Democratic Republic of the Congo, Uganda, Kenya, and Senegal. If you take the Arab World as a whole, these neighbouring counties are all comparatively smaller. The population of the Arab World stood at 350 million in 2012, which is a third of Asia, and two thirds of Africa. The Arab World, if taken as a whole, is the third most populated region following China and India and surpassing the US. It is also rich in natural resources among which are oil, natural gas, and solar energy, as well as phosphate, potassium, iron and salt. The climate is diverse, with numerous rivers, vast expanses of arable land, and it is rich in animal diversity. It has relatively high social integration, uses a common language, has a common culture and collective memory. Although there are also minority groups, the vast majority of inhabitants are of Arab denomination.

Looking at the aforementioned situation, the Arab World as a whole has the conditions required for non-dependent development. However, it doesn’t operate as a single entity, and is in fact composed of 22 states meaning they have no way of



realising non-dependent development. Although some countries have a comparatively large territory or population, there are also shortcomings. For example, Sudan’s territory is 1.8 million square kilometres, and has multiple races, cultures, and religions, but only one economic structure. Its industry falls far behind and there is a strong dependency on nature and foreign aid. Once more, Egypt has a population of 90 million people which is the largest in the Arab World, and it is also the country with the greatest possibility of achieving non-dependent development. However, its specific geographical location and status as a military threat to Israel from the late 1940s to late 1970s has resulted in its GDP only accumulating at a rate of about 15% by the late 1980s. In addition, rapid increase in population growth (of one million a year) has had a negative impact on economic productivity. From the 1980s, Egypt reformed its economic policies, and started to deepen its cooperation with Western countries. Even Saudi Arabia, the Arab World’s most prosperous country with the world’s largest oil reserves, and vast territory (2.25 million square kilometres) enjoys an advantageous geographical position. Saudi Arabia only lacks other natural resources such as water and a large population.

Therefore it can also be said that if the Arab World was to fall apart, there would be no way of realising non-dependent development. Only by becoming a single economic entity which independently manages its resources can the Arab World achieve its aim of non-dependent development.

Owing to the political differences of its various leaders, integration and cooperation between the Arab states has never been effective. However, the League of Arab States established in 1945 proposed that: ‘The aim of the League of Arab States is to tighten relations and strengthen cooperation between countries in various fields such as trade, agriculture, and industry’.

When strengthening unity and cooperation between Arab states, people would often mention the Economic and Social Council of the Arab League. On 25th May 1953, the Council convened for their first meeting, deciding on cooperation by exempting member states from import taxes between states on various products such as agricultural products, and natural resources. This is believed to be the first measure in which these countries acted as a ‘unified economy’. At that time, ‘unified economy’ as a form of words was broadly used in Arab official documentation, and was later replaced with ‘economic integration’.

The Council was established in accordance with the Arab League on 12th April 1950 and included Egypt, Syria, Saudi Arabia, Jordan, Iraq, Yemen, and Lebanon. They together signed the ‘Joint Defence and Economic Cooperation Treaty between the States of the Arab League’. The treaty stipulated that ministers were responsible for the economic management of member states, and primarily responsible for the organisation’s various economic activities. In 1977, the council’s functions were adjusted to become responsible for planning, organisation, and coordination. The Council has within it a number of economic and social organisations such as the Organization of the Arab Petroleum Exporting Countries (OAPEC), The Arab Administrative Development Organization (ARADO), Arab States Broadcasting Union (ASBU), The Arab League Educational, Cultural and Scientific Organization

(ALECSO), Arab Centre for the Studies of Arid Zones and Dry Lands (ACSAD, The Academy of Scientific Research and Technology (ASRT), the Arab Labour Organisation (ALO), Arab Organization for Agricultural Development (AOAD), Arab Satellite Communications Organization, Arab Atomic Energy Agency (AAEA), Arab Industrial Development and Mining Organization, Arab Fund for Economic and Social Development (AFESD), Arab Bank for Economic Development in Africa (ABEDA), The Arab Investment and Export Credit Guarantee Corporation, The Arab Monetary Fund (AMF), Arab Authority for Agricultural Investment and Development, and The Arab Civil Aviation Organization.

What should be noted is that these organisations were set up not only to manage sovereign resources, but also to carry out research, circulate, and coordinate work as opposed to unveiling mandatory resolutions. Therefore, as one economist pointed out, most of the resolutions made by the Organisation for Economic Cooperation and Development (OECD) did not touch on the core issues relating to Arab development. The fundamental crux lies in political divergences between various member states. In the case of the Council, problems could only be sent to a high level of the organisation such as the council’s foreign affairs minister, but had no influence on final decisions.

In 1957, proposals made by the Council, and the Arab League had to pass The Arab Economic Unity Agreement, and in 1964 the Council of Arab Economic Unity was established. This council was originally founded by 7 countries which was later increased to 11; Egypt, Iraq, Syria, Jordan, United Arab Emirates, Palestine, Yemen, Sudan, Somalia, Libya, and Mauritania. Its purpose was to realise economic unity between Arab states, and promote free movement in terms of its personnel, capital, commodities, services, and technology. The council divided the various industrial alliances into numerous industries such as steel, textiles, chemical fertilizers, construction, fishing, food processing, paper making, sugar refining, leather, overland logistics, shipping, railways, ports, cement, construction materials, pharmaceuticals, medical equipment, restaurants, tourism, tyres, and rubber. In addition, the council was also divided into the Arab Cooperation Council, General Arab Insurance Federation, Arab Tourist Enterprises Alliance, Arab Agricultural Cooperative Alliance, Arab Investment Alliance, Arab Commercial Contracting Alliance, as well as the establishment of several enterprise alliances such as the Arab Animal Resources Development Company, the Arab Pharmaceuticals Company, and the Arab Industrial Investment Company.

The main purpose of these alliances was to promote cooperation between private enterprises, and help them resolve any operational issues. Although similar political divergences appeared between countries, each alliance promoted common development through launching natural resource joint investments, and aspects of sovereign management which made extremely limited contributions.

In October 1973 following the Fourth Middle East War, oil producing countries used oil as a weapon by cutting off its supply to the west. Against this backdrop, from 1973 until the early 1980s, the economic unity between Arab countries continued to progress, and the League of Arab States formulated a development



strategy which covered all aspects of the Arab World. For example, in 1974 the third Arab Industrial Development Conference in Tripoli approved ‘The Industrial Development Strategy for the Arab states’, and in 1977 the Arab Organization for Agricultural Development (AOAD) published the ‘Arab Agricultural Security Strategy’. In the same year, the Arab Industrial Development Centre published the ‘Arab Industry Independent Development Strategy’. In addition, other related organisations have also published development strategies which encompass other related issues such as human resources and social undertakings.

In 1975, ECOSOC instructed its secretariat to formulate the ‘Joint Arab Economic Action Strategy’. In November 1980 in Oman, the Arab Summit ratified this strategy but it was then postponed by the Arab League in 1983, and never became workable.

From the 1990’s, the tide of economic globalisation resulted in the degree of openness to foreigners extended daily, and the Arab unified economies process of integration entered into a new phase.

In 1996, the League of Arab States convened for its first summit since the Gulf War in 1990. In order to implement decisions made at the summit, the General Agreement on Tariffs and Trade (GATT) (which transitioned into the WTO in 1997) and ECOSOC ratified the ‘The Great Arab Free Trade Area Implementation Plan’, which was then put into effect in 1998. Initially, this plan for the establishment of a free trade development area had a ten year time limit, which was then compressed to 7 years with its preliminary construction to be fulfilled in 2005.

Free trade areas were established in a phased and sequenced manner affording all countries a 10% reduction in tariffs. This measure had a positive effect on the development of production and trade between Arab states. In the early 1990s, the scale of trade between countries hovered between $22 and $26.2 billion reaching $31.3 billion in 2000, $39.6 billion in 2002, $88.6 billion in 2004, and broken through to over $1.079 trillion in 2006. However, along with increases in international trade between the Arab states and other countries, the total trade between Arab states themselves increased little in comparison. This to a degree explains the limited achievements of the economic and trade cooperation between the Arab states.

In addition, the Great Arab Free Trade Areas had an effect on some of the negative impacts brought on by globalisation, and in fact played a significant role. When economic integration is realised to some degree among the Arab countries, the Arab people should attain a better position in negotiations with other countries concerning trade liberalization, and then adopt more effective measures which respond to protecting the economy rather than accepting the various terms proposed by international organisations, which are themselves controlled by major countries. Arab countries should also have strengthened their industrial capacity so as to be more competitive on the international market, made better use of the conveniences brought about by trade liberalisation, expanded the scale of trade between Arab states, and reduced dependence on foreign commodities.

In effect, through participating in a process of economic globalisation, Arab countries have extended their reliance on western countries. Economic globalisation requires ‘structural reform’ which limits a country’s economic development and contradicts the fundamentals of non-dependence development. A large disparity in productivity exists between Arab and Western countries due to the latter’s monopoly on advanced technology. Relationships with the west are principally focused around the export of oil, and the import of various manufactured products. This situation is very difficult for Arab countries. Such a relationship serves only to benefit Western countries, and has resulted in Arab countries becoming reliant on them.

Natural resources alone have not brought the beneficial conditions in which Arab people can realise non-dependent development, and previously mentioned conditions are the same.

Even so, this does not mean that realising a unified economy is impossible for the Arab people, or that the steps taken in pursuit of this unification have been futile. These free trade-areas and the League of Arab States aim to create an integrated economy which references European experiences, and plans to establish an Arab Central Bank and United Market by 2020. Considering these past lessons, the main influences on the aforementioned objectives are the political divergences between nations.

From ‘Non-Conformist’ Development to a ‘Non-Conformist’ Rise

In conclusion, the Arab states have yet to find a path to non-dependent development at present. They are still unable to unify their economies sufficiently. Such unification would enable them to make use of their resources, independently formulate economic policies, and have the freedom to make adjustments to the different phases of development.

What is special about China’s ‘non-conformist’ rise is that its ultimate objective is to serve the interests of the state, without ideological constraint. Arab people might reference China’s experiences by firstly strengthening economic integration between states, and improving the degree of unity so as to realise economic development. Without economic development, there cannot be government, a military, and various other fields.

Returning to the sluggish Arab revival, development should be looked upon as a number one priority by its people and learn from China’s non-conformist rise.


Part Two Civilisational Repositioning and the

Future of the Arab People

1

What does ‘Civilisational Repositioning’ actually mean?

In the mid-18th century, the industrial revolution in England brought about one of the biggest turning points in human history. Along with material development came an unceasing accumulation of intellectual and spiritual wealth which bisected the world by the start of the 21st century; the developed and the undeveloped world. The former’s levels of state, society and individuality are all a direct result of the industrial revolution, and these advances had a tremendous impact on the history of human productivity. The latter has had no way of drawing on this experience, gaining autonomy, or of influencing other nations or their people’s productivity. Regrettably, the Arab World falls into the latter category.

The decades following the Second World War were bright, and it was believed to be the ‘optimum opportunity’ to realise a material civilisation and create social and political progress. However, a crucial element which contributed to such industrial success in the later stages of development was the arms industry, in particular the production of non-traditional weapons. Finally, it opens up and develops space for communication and information technology, and lays a solid foundation.

Some Asian countries have stepped onto the train of optimum opportunities, and have had far reaching and significant influences on the course of human development. China is an outstanding example of this, and already enjoys the strength of a major world power.

However, many countries have become uncertain about and missed optimum opportunities. This has occurred for a number of reasons. One reason is that they might not have formulated an effective development strategy or developed strategic thought, leading to a loss of control over sovereignty and natural resources. The Arab World is an example. Arab countries are not currently in a position to advance, or able to start over. The experience of the Arab people in the late 19th and mid-20th centuries underlines this point.

There is an enormous disparity between the civilisations of the Arab World and the US. The US has various reasons for controlling and using the Arab people, such as fighting dissidents which has resulted in Arab people merely relying on their national power and resources. The US’s powerful developmental momentum tends


towards diminishing cultural disparities. It seems unreasonable to claim that the disparity between Arab countries and the US can be redressed at the current time.

For lagging nations, a unique and viable approach would be to establish a ‘community of interests’ with developed countries which might facilitate mutually beneficial cooperation rather than purely expecting to benefit. Lagging nations have referenced the successes of advanced countries, and drawn upon their various fields of civilisation. Such a relationship would also be beneficial for the long-term growth of advanced countries.

China has a similar history cooperating with advanced European countries such as Germany and France, and there are examples which this chapter will expand upon. China’s developmental process has been contained and obstructed by the US, so China has steered toward attracting investment and advanced technology from European countries, creating enormous bilateral investment opportunities. China’s ‘technology import’ has benefited its development, and actively encouraged new high-tech enterprises to invest into science and technology. This has enabled enormous progress allowing China to leap from the ‘exploring and understanding’ to conducting ‘autonomous research’. We have found that when there is a massive disparity between countries in terms of politics, society and culture, establishing a ‘community of interests’ can create a means to communication. The information revolution has further brought about the possibility for civilisations to converge.

However, we must also be aware that the term ‘community of interests’ is realistically suited to comparable countries. To serve lagging nations, we must firstly follow the road to advancing them, and implement the principle of ‘civilisational repositioning’. Such a concept involves a follower wishing to develop into an equal partner. Describing civilisational repositioning as the aims or pursuit of common interests creates contradiction for the lagging country. Advanced nations will not help those less developed, and less developed nations are frequently unable to comply with the requests of developed nations thus leaving them powerless to resist control and exploitation.

Before civilisational repositioning can even take place, establishing national willpower is extremely important. Without it, any plan or scheme will fail to materialise, and blindly following a developed or developing country is also not wise. The reason China has spread its wings and attracted the world’s attention is due to its free and steadfast national will. China is an independent and sovereign modernising country, and more than thirty years has passed since reform and opening up. It has concerned itself with a practical exploration to achieve fitting national conditions and effective development projects, resulting in notable humanitarian and material achievement.

A strong national will can transform into a workable plan with a long-term vision, but must not lack decisive leadership. In addition to drawing up and participating in a plan, or developing projects for a national revival, no effort can be spared during the implementation, supervision and evaluation of such schemes. Doing so would thoroughly resolve problems as they arise, and actively responded to unrelenting changes in global conditions. It could be said that it is on account of New China’s powerful leadership that such enormous advances be realised, especially since opening up.

If the Arab World has the will to liberate itself, this solidarity would be enough to function independently from other countries. This will enable participation in formulating a scheme for improvement and rejuvenation. The form and degree of cooperation does not matter, even if it emerges in some countries initially instead of being in pursuit of a unified Arab utopia. Another possibility is to form a civilised leadership which is conscious and consistent. The nature and form of the leadership is unimportant as long as it is not in pursuit of a utopia. If this is the case, will any country help Arab nations adopt civilisational repositioning?

In truth, many possible factors have led these countries being few and far between. It should be emphasised that western countries only require resources from the Arab World, and are unwilling to support development and advancement in which they would not benefit themselves. However, China is an emerging nation which the Arab world might follow. By pursuing China’s path to revival, the Arab World might advance its own civilisation, and also support China through their own development.

The reason that China is a first choice for the Arab World’s implementation of civilisational repositioning is that its revival has seen some outstanding results, and also because they will become extremely influential in international politics. The global structure controlled by western countries is the main reason the Arab civilisation has fallen behind. However these countries should be powerful enough to supersede the west on the world stage, or at least contend with them.

China can help liberate Arab people currently being exploited by external pressures so that they might create a flourishing modern Arab civilisation built on mutually beneficial cooperation. It is worth pointing out that China’s development has apparently limitless prospects. This should draw interest from countries across the world, including Arab nations. In this context, the Arab World should engage in competition as early as possible.

In conclusion, the concept of ‘civilisational repositioning’ can be summed up as lagging nations’ pursuit of revival, prepared with an engaged national will, and a conscientious, loyal, and visionary leadership wishing to establish tight relations with other advanced nations under two aspects:

1. The advanced nation should defend the interest of the lagging nation, meet their active demands, protect them from the pressures and interferences of the outside world, and create an adaptive environment in which they can implement plans for a national revival.

2. Advanced nations can help lagging countries by providing the fruits of their material advancement unavailable to developing countries. This will expedite the implementation of plans for a national revival. Advanced nations will also benefit from this cooperation, through the closing up of the gap between developed and undeveloped nations.

Yet, there are questions that require response. Should China adopt the Arab World as they undergo civilisational repositioning? The following sections answer a number of questions: will China accept Arab civilisational repositioning? What can Arab countries do to aid this process?

What does ‘Civilisational Repositioning’ actually mean? 69

2

China acting as a possible example for Arab undertaking of Civilisational

Repositioning

China’s view of the outside world has changed since Mao Zedong’s period of reform, although the deep impact of his reforms are remembered for serving the national revival and realising state interests. With this as a starting point, China already becomes a possible reference point for an Arab implementation of civilisational repositioning.

The Mao Zedong Era for China and the World

The Chinese Communist Party was founded in 1921, and stated that ‘national interests are the highest’. When they finally came to power in 1949, they continued to adhere to this single principle.

Following the Korean War (1950–1953), the Kuomintang was beaten by the Communist Party forcing them to retreat to Taiwan. This led to the establishment of the People’s Republic of China which strived to be recognised by the international community. New China adopted similar positions to their allies in the Soviet Union with regards to international affairs, especially the liberation of Arab countries from their colonial rulers. The principle of peaceful coexistence and socialist development was initially centred on the Soviet Union. So as to gain an understanding of and support Arab countries, China called on and used peaceful means to resolve problems in Palestine. They proposed maintaining the legal interests of Palestinian refugees, and opposed US interference. China believed that Israel was merely a western imperialist outpost, but went through the Israeli Communist Party as a means of improving alliances and relations.

In June 1954, China, India and Burma jointly proposed the ‘Five Principles for Peaceful Coexistence’. Namely, mutual respect for sovereignty and territorial integrity, mutual non-aggression, mutual non-interference, equality and mutual benefit, and peaceful coexistence. Since then, China has always adhered to these principles which have served as a basis for contemporary international relations.


In April 1955, the Asian-African Conference in Bandung, Indonesia hosted 29 participating countries, 18 of which had not yet recognised New China. In this meeting, China included the Palestinian problem in its international agenda, and deemed it to be a turning point for the world. The majority of attendees at the conference were from Arab and Islamic states, and China attached great importance to improving and developing relations with them. The Chinese State Council’s Zhou Enlai was often China’s representative. He would often meet with leaders such as the Egyptian President, Gamal Abdel Nasser, and later with Ahmad al-Shukeiri who was the first chairman to be allowed to represent the Palestine Liberation Organisation (PLO) and part of the Syrian delegation to the United Nations. Zhou Enlai understood in detail Palestine’s history and situation, and expressed that the Chinese government and people were sympathetic and supportive of the Palestinian people. His stance was opposed by the conservative position taken by India’s Prime Minister Jawaharlal Nehru, resulting in China winning favour with the Arab people. The Bandung Conference promoted the rise of ‘non-aligned movement’, so that Asian and African countries might avoid entering into the Cold War. At the same time, the Bandung Conference opened China up to new relations, and vast prospects. Although the conference was short, Egypt and China signed a bilateral trade agreement, the first established diplomatic relation in the PRC’s leadership. This was followed by Syria and Yemen in the same year. Along with the establishment and development of relations between New China and Arab countries, China supported the Arabs in the second 1956 Arab-Israel war.

Prior to the Cultural Revolution, China’s leadership adopted relatively closed foreign policies so as not to give other countries an opportunity to interfere in China’s domestic politics. China’s dissatisfaction with the Soviet Union’s ‘Big Power Chauvinism’ from the late 1950s led to a divergence in terms of ideology and political decision making. Following the outburst of the Cultural Revolution, Sino-Soviet contradictions became intensified further, leading the Soviet Union to change its position on the Taiwan issue as well as a territorial border conflict in 1969.

In 1974, Mao Zedong proposed the ‘Three Worlds’ theory in which the US and Soviet Union were the ‘first’ world; Europe, Japan, and Canada the ‘second’; and China along with a number of other countries made the ‘third’. It appears that Mao Zedong considered China to be a developing country, and that the Soviet Union had forsaken its socialist principles so as to fight the US for world supremacy. China wanted to draw a clear distinction between themselves and these hegemonic and imperialist countries. He passed comment on the Soviet Union’s false pride and the fact it sold weaponry for huge profits, thus disregarding the people’s liberation which was no different from US imperialism.

The Mao Zedong era of foreign policy carried a lot of ideological colour, and the ‘Three Worlds’ inclusion of imperialism and class struggle of the proletarian revolution became its foundation. Mao Zedong established proletarian politics, and the party throughout its history had policies and strategies directed at the bourgeois. They believed in the proletariat’s struggle across the world, and that they could at any point unite to become a progressive force, fight for centralised power and isolate stubborn influences.

To be China’s ally, it is necessary to share the principle that ‘national interest is higher than everything’ in accordance with the Chinese Communist Party. The third world was anti-hegemonic, imperialist, and colonialist, thus naturally becoming China’s allied forces. China believed at this time that Asia, Africa, and Latin America had not yet completely realised political and economic independence in spite of having been liberated, as they had all at some point had to deal with hegemonic and imperialist forces. Therefore, China along with Asian, African and Latin American countries of the third world needed to fight the waves of hegemony and imperialism in order to live and liberate their nations.

Although China itself was seen as a poor and underdeveloped third world country, it has yet been a dominant force. It is financially generous to its allies and provides a great deal of aid, interest free or low interest loans, and was a strong competitor to the Soviet Union. In 1967, Egypt was defeated by Israel in the third Arab-Israel conflict, and suffered great losses. China provided Egypt with a great deal of aid, second only to Pakistan. Although the scale of aid given to the Arab states by the Soviet Union exceeded that of China, the number of countries involved exceeded the Soviet Union and included Sudan, Tunisia, and Yemen. Between 1970 and 1972, the scale of aid given to African Arab states exceeded that of the Soviet Union. This naturally attracted criticism from the Soviet Union and their followers in the Arab World who believed China’s aid to be politically motivated. Sino-Soviet divergences resulted in divisions among the communist parties of some third world countries, and the formation of a number of new communist parties.

From 1956 to 1973, China donated $3.38 billion in aid to third world countries, among which the largest proportion was given as interest-free credit. The Arab states who received these interest free loans were Egypt with $94 million, Syria with $99.4 million South Yemen with $72.8 million, North Yemen with $71.2 million, Iraq with $36 million, Algeria with $99.9 million, Mauritania with $27.5 million, Sudan with $75 million and Tunisia with $36 million.

Adjustments to China’s Foreign Policy

Deng Xiaoping hoped that China’s foreign policies were enough to serve the nations huge undertaking to develop and revive. He terminated Mao Zedong’s left leaning policy, ‘class struggle as the central task’, and replaced it with mutually beneficial foreign policies. As a developing country, China announced that it would always abide by the Five Principles of Peaceful Coexistence.

Following reform and opening up, China put aside its ideological divergences with neighbouring and western countries in favour of developing a foundation for long-term economic and trade relations, among which were the old enemies of Japan and India. China also put aside the US’s support of Taiwan and its ideological conflicts. However, this wasn’t enough to satisfy and convince the US to improve their overall relations, and strengthen economic cooperation with China. However,

China acting as a possible example for Arab’s 73


tensions between China and the US’s formidable rival, the Soviet Union, afforded opportunity for China and the US to improve relations. China and the US boycotted the Soviet Union, and expanded dialogue with each other. China strived to forge feasible cooperation, and the US allowed companies to invest in China’s market. Along with this injection of US investment, American enterprises reaped great benefits from China’s cheap labour force, and continually expanded its market.

China also worked hard to develop peaceful diplomatic relations with the west and various other countries around the world, and always adhered to the principles of peaceful coexistence. They avoided interfering with domestic affairs of other countries, or involvement in international conflicts, accelerating economic and trade cooperation. During this period, relations between China and Israel gradually improved, and China brought in western advanced military technology through them. The Jewish lobby in the US and Europe jointly involved itself in China’ national interests, thus expediting Jewish capital into the Chinese market.

Following reform and opening up, China-US relations continued to advance. Formal diplomatic relations were established on 1st January 1979 after many years of both secretive and public bilateral relations. In July 1971, the US Secretary of State Henry Kissinger secretly visited China to negotiate the then US President Richard Nixon’s (1969–1974) military withdrawal from East Asia. Relations were improved by the US agreeing to recognise the People’s Republic of China as China’s sole legitimate government, and Taiwan as an indivisible part of China. As China-US relations became milder, President Nixon made an official visit to China in 1972.

Prior to October 1971, the 26th United Nations General Assembly passed resolution 2758 which recovered China’s legitimate rights and immediately expelled the Kuomintang representative. In 1980, the United States Congress approved a China-US trade agreement, and recognised the country as a Most Favoured Nation (MFN).

China had two objectives opening up to the west. Firstly, that investment would develop the Chinese economy, and western advanced technology could drive China’s industrial development. Secondly, by opening up China’s market and exporting commodities, balanced trade could contribute the capital necessary for economic development. For this reason, China’s continuous development of diplomatic relations accelerated economic growth. In the early 21st century, China’s gross exports had reached 20% of its GDP which highlights China’s reliance on global markets, but also how it maintained necessary peaceful and stable relations with various countries. Of course, the western world’s willingness to cooperate with China stemmed not only from confrontation with the Soviet Union, but also from the firm belief that China’s economic reforms would be of great benefit to developing their own economies.

So as to attract even more foreign investment, China made efforts to improve its legal environment. In 1978 following reform and opening up, new laws were introduced related to foreign capital management which allowed the establishment of foreign funded enterprises and Sino-foreign joint ventures. In the early 1980s a

series of laws regarding intellectual property and trademarks, as well as reduced taxes and customs duties were introduced.

China’s economic relations with Western countries including the US, further confirmed the effectiveness of China’s leadership with regards to foreign policy. In June 1989, the Tiananmen Square Protest, or ‘June Fourth Incident’ led to tense relations between China and the west, as the incident was used to exert pressure on China by terminating investment, imposing restrictions on the import of advanced military weapons and high-tech products, as well as attempts to destroy the communist system led by the Soviet Union. From 1990, the US Congress started to use the ‘issue of human rights’ as an excuse for obstructing and prolonging China’s MFN status.

Pragmatic Diplomatic Policy

In the early 1990’s, China adjusted its diplomatic strategy towards the west, and pragmatically opened up a little more. It expanded relations with a number of East Asian countries and regions including Japan, South Korea, Malaysia, and China’s Taiwan. They also expanded to European counties such as France and Germany with whom they enjoyed dynamic relations, and who also happened to use advanced technology.

The collapse of the Soviet Union in 1991 forced China to face political and security pressures. The collapse of the Soviet Union was mainly due to its closed economy, and the expensive arms race with the west. From another perspective, it also revealed that China’s implementation of an open door policy was correct. Of course, the US’s unipolar world structure meant that China needed to promote peaceful foreign policies so as to weaken US impact on their neighbours, and prevent the formation of a strategic alliance with China’s Taiwan, or Japan.

China’s approach to opening up to the economies of Asian countries proved to be successful, which was underpinned by the timely resolution of disputes especially those relating to borders. In the early 1990’s, China established the ‘Shanghai Five’ mechanism which was applied to resolving border disputes with former Soviet republics. The organisation developed into the Shanghai Cooperation Organisation (SCO) in 2001, and its function was to further its wealth and expansion. From 1991, China strengthened its relations with ASEAN (Association of Southeast Asian Nations), and by stages deepened political and economic relations with members Malaysia, Indonesia, Singapore, the Philippines, Brunei, Thailand, Burma, Vietnam, Laos, and Cambodia. It is worth noting that when ASEAN was initially established in 1967, its main intention was to stand up to China’s influence in East Asia. In 2012, the value of trade between China and ASEAN’s ten nations exceeded $400 billion. China abandoned its grudges to take the initiative with other Asian countries to establish relationships, especially with Japan and South Korea in which there were historical resentments, to form of ASEAN’s 10+3 cooperative mechanism. In



the 1990s, trade between China and South Korea enjoyed annual increases of 20%, which topped $250 billion in 2012. Although there are still territorial disputes between China and Japan, their bilateral trade still reached $329.4 billion in the same year. China has already become Japan’s, and now South Korea’s number one trading partner.

With regards to international affairs, China has worked hard to strengthen its economic and trade relations with the US and other Western European countries so as to attract investment and introduce technology. Between 1985 and 2000, Germany invested $24.1 million which leapt to $1.04 billion, and China has also been active in bringing in their advanced technology. For example, Germany’s Volkswagen Car Company set up in Shanghai with a factory in Changchun, and produced a number of Volkswagen branded car models. Siemens has also established a number of production projects including over fifty telecommunications systems in China, wireless telephones, mobile phones as well as equipment for power stations. BASF, Bayer, Henkel, Hess Special Grade Chemistry and pharmaceutical companies have also entered into China’s market. China and the European Union have cooperated directly, resulting in rapid development of bilateral trade and investment. By the end of the 20th century, the European Union had already become China’s third largest source of foreign investment.

During this phase, China expressed concerns about the US leading a unipolar world structure, and has expressed its long term-aspiration to establish a more multi-polarised order. In 2002, Jiang Zemin reported at the Sixteenth National Congress how China had established itself as a new international political and economic order for the 21st century. Countries tend to respond politically to mutual respect and consultation, rather than having views imposed from outside. Economically, mutual promotion and development as opposed to creating extreme disparities between rich and poor. Culturally, referencing each other for a common prosperity rather than a rejection of other cultures. In terms of security, mutual trust and common safeguarding are beneficial. A collaborative approach to security, dialogue and cooperation can resolve disputes, rather than resort to force and militarily threat.

With the collapse of the Soviet Union and end of the Cold War, the US constantly criticised China over human rights issues so as to exert pressure on the Chinese government. Even so, China-US cooperation has never drawn to a halt and the US, as before, recognises China’s importance. China-US economic and trade relations extended in terms of development. In 2003, bilateral trade totalled $126.3 billion, amounting to 14.8% of China’s foreign trade, and 8.3% of the US’s. From 1974 to 2003, China’s exports to the US went from $1.23 billion to $124.9 billion. During this period, imports amounted to $0.807 billion rising to $44.68 billion. This rapid development continued as bilateral trade had reached $211.6 billion in 2005, broke through to $300 billion in 2007, and exceeded $380 billion in 2010.

Although China-US political relations had their ups and downs due to US changes of administration, they never ceased. During President Bush. Sr’s time in office (1989–1992), relations were tense as economic sanctions, suspended high

level official visits and military exchanges were implemented against China following the June Fourth Incident. There were also attempts to forbid international organisations from providing credit and aid to China. As China expanded communication with European and Asian countries, the US removed military sanctions and various other bans.

During the early stage of the Clinton Administration (1993–2000), former leader of China’s Taiwan Lee Tenghui made an official visit to the US in May 1995, the first visit following the establishment of Sino-US diplomatic relations. This caused extreme tension, but the Clinton Administration soon realised that there was no sense in confronting China and compromising diplomatic relations and economic development, and so made efforts to repair the situation. With improvements to Sino-US relations, China’s State President Jiang Zemin made an official visit to the US in October 1997. Clinton publicly supported the ‘Three No’s’ policy with regards to Taiwan, in that it didn’t support Taiwanese independence; support the notion of ‘two Chinas’ or ‘One China, and One Taiwan, or Taiwan’s admission under any circumstances into international organisations as a sovereign state. The following year, President Clinton made an official visit to China.

In 2000, the US Congress consented to giving China permanent status as a normal trading partner. However, when President Bush, Jr. came to power, relations took a step backwards as China was deemed a strategic competitor. It began to support Taiwan by selling them arms, and warned China that they had developed guided missiles and innovative weaponry. Relations entered into a hopeless situation. In 2001 following 9/11, China supported the US fight against terrorism, and appealed to the United Nations to play a role as well as providing the US with intelligence. At the end of 2002, the United Nations Security Council took a vote on a new draft resolution about Iraq submitted by the US, and all members including China voted in support. The following year, the US overturned Iraq’s Saddam Hussain regime.

During Hu Jintao’s era, China formulated the Peaceful Development Strategy, which was deemed a necessary path for China’s modern construction. In December 2005, the Chinese State Council’s Information Office published a White Paper, and proposed that peace be the foundation for development, that development be the principle of peace, and that China’s development required a peaceful international environment. The White Paper presented vast, full and accurate data which demonstrated that a peaceful international environment brought achievements. It also reiterated that China would take a peaceful road to development, would not threaten any country or instigate war, would take a peaceful approach to resolving disputes with neighbouring countries, and in line with the global economy pursue interdependent relations with other countries.

The Chinese government stressed that China is not a threat to the world, will not seek hegemony, and certainly will not scramble for supremacy with the US. Of course, China in the meantime persisted with this peaceful development strategy whilst also attaching importance to all aspects of a defence strategy framework by strengthening national defence and modernising the army.



The Positive Achievements of the Reform and Opening-up Policy

Since reform and opening-up, China’s economy has achieved a great deal. In the 1980s, China’s foreign policies were significantly adjusted. They pragmatically encompassed political, economic, and cultural aspects which were reinforced by friendly and cooperative relations, especially in attracting foreign investment and technology. Combined with its independent peaceful foreign policies, opening up to the outside world, maintaining economic lifelines with relevant countries, and seizing control of state-owned large enterprises has driven China’s constant economic development. This is the foundation of China’ foreign policy, and also the key to establishing tight cooperative relations with various countries. Of course, by undergoing the process of civilizational repositioning, we also hope to guarantee such a contribution.

The following data can be used to explain the achievements which have followed the implementation of reform and opening-up.

1. Foreign Capital

Following the implementation of the Reform and Opening-up Policy, the majority of foreign capital was firstly poured into the eastern and southern coastal regions of Guangdong, Fujian, Jiangsu, Zhejiang, and Shanghai. Later, the north and central provinces were included. This foreign capital was mainly focused around labour-intensive industries such as clothing and accessories, textiles, electrical equipment, electrical products, and food as well cars, energy, tourism, transportation, and communication industries oriented towards the domestic market. In 2010, China attracted Foreign Direct Investment (FDI) in excess of $100 billion which accounted for nearly 10% of the world’s total.

Chart 4: FDI into China (Unit: $100 million)

Year FDI

1991 43.66

1992 110.08

1993 275.15

1994 337.67

1995 375.21

1996 417.26

1997 452.57

2002 527.43

2003 523.05

2004 606.30

2005 603.25

2006 630.21

2007 747.68

2008 923.95

2009 900.33

2010 1088.21

2011 1160.11

2012 1117.2

2. Economic Development

In 1978, China’s GDP stood at a mere 364.5 billion RMB, but increased twenty fold following twenty years of development to 7.8 trillion RMB by 1997. Prior to reform and opening-up, the domestic economic growth rate stood at 6.1%, but rigorous development from 1980 to 1988 resulting in annual average growth rates of 11.4% far exceeded global figures of 3%. In the following ten years, China’s GDP trebled and reached 26.7 trillion RMB by 2007. At present, China has already surpassed Japan to become the world’s second largest economy. What needs to be noted is that owing to China’s enormous population, incomes for the majority of people are unable to rise at the same rate as the economy grows, and this is especially the case for rural residents. According to statistics, in 2010 China’s urban residents had a disposable income of 19,109 RBM, and the per capita income of rural residents is less than a third of urban residents at 5,919 RMB. The following chart shows China’s economic growth rate from the late 1980s.

Chart 5: China’s Economic Growth Rate (%)

Year Annual Growth Rate (%)

1988 11.3

1989 4.1

1990 3.8

1991 9.2

1992 14.2

1993 13.5

1994 12.6

1995 10.5

1996 9.6



1997 8.8

1998 7.8

2002 8.3

2003 9.5

2006 10.7

2007 11.4

2008 9.64

2009 9.21

2010 10.45

2011 9.3

2012 7.8

3. Controlling Inflation

With economic development, living standards also continued to rise and consumer demand kept growing. This naturally brought with it the risk of inflation. During the first half of the 1990’s, China’s rate of inflation kept rising and reached a record high of 24.1% by 1994. China’s Central Government accordingly adopted a series of measures to strengthen its macro-control, and succeeded in stabilising growth within a short period of time thus controlling inflation to within a reasonable range. From the 21st century, China’s inflation rate along with a new round of growth emerged, although far below the levels of the 1990’s. However, in April 2008 and July 2011, it had reached 8.5% and 6.5% respectively. In response, the Chinese government strived to adjust inflation, paid particular attention to the prices of consumer goods and any other potential problems. The following chart shows China’s rate of inflation in the 1990s:

Chart 6: China’s Rate of infl ation in the 1990s

Year Rate of Inflation (%)

1991 3.4

1992 6.4

1993 14.7

1994 24.1

1995 17.1

1996 8.3

1997 2.8

1998 –0.8

1999 –0.4

4. Economic Structural Optimization

China started out as a poor agrarian country and developed into an important industrial centre due to reform and opening-up. Economic structures have undergone significant changes which are mainly reflected in industrial and service industries. It is worth emphasising that although agriculture decreased proportionally, its overall size actually grew substantially. Grain output increased steadily, securing the food market as the trend towards urbanisation continued in pace with sustainable economic development. Even non-staple food products such as meat, sea food, and fruit experienced rapid growth. China’s agricultural production structures had already improved compared with prior to the policy. Foreign trade structures for China’s agricultural products also underwent some fundamental changes as the export of various preliminary agricultural products reduced in share, and were replaced with various value-added products. Of course, improved agricultural structures and increased productivity also brought with it some negative effects. Large numbers of rural residents moved to cities in search of employment, and this led to city suburbs being full of migrant worker groups from poorer areas.

China’s economic structural changes are as follows.

Chart 7 : 1975 – 2000 China’s Economic Structural Changes

1975 1980 1985 1990 1995 2000

GDP (%) of Total

Agriculture 32.4 30 28 27 21 16Manufacturing 45.7 49 43 42 49 51Service Industries 21.9 21 29 31 30 33

Labour ForceDistribution (%)

Agriculture 81 69 62 60 52 50Manufacturing 10 18 21 21 23 22.5Service Industries 9 13 17 19 25 27.5

Agriculture Production Structure (%)

Types of Crop 82 76 69 65 58 56Animal Husbandry 14 18 23 26 30 30Fishing Industry 2 2 3 5 9 10Forestry 2 4 5 4 3 4

Agricultural Population Ratio (%) 83 81 76 74 71 64

What is worth emphasising is that annual foreign capital increases to China’s manufacturing enterprises contributed to China’s total industrial output value, increasing from 0.9% in 1988, to 5.4% in 1991, and again to 10.2% in 1993. The share of state-owned enterprises as a proportion of total industrial production correspondingly decreased from 64.9% in 1988 to 47% in 1993. Of course, state-owned enterprises occupied a smaller proportion due to a number of factors which emerged in the 1990s. The Chinese government strengthened economic sovereignty by encouraging and supporting the development of large-scale privately owned industrial enterprise, which went on to enjoy a favourable position in the economy.



5. Importing Technology

One of the key aims to successfully opening up to the outside world was attracting foreign investment, and advanced technology. In the early stages, it was only the service sector that managed to attract foreign advanced technology, far from enough to satisfy the great ambitions of China’s complete development. The government provided various preferential policies for large foreign and multi-national companies so as to attract them and their advanced technology to China. They also encouraged them to produce for the domestic market rather than for export. These stimuli enabled China to fully utilise advanced technology from overseas to establish a number of large-scale industrial programs related to cars, airplanes, electronics, communications, computers, and exploration.

Meanwhile, China’s traditional exports such as textiles, food products, and light industry also used these new advanced technologies so as to improve technologically. However, what is worth mentioning is that although China successfully attracted a lot of advanced technology, many foreign-owned enterprises brought technology that was obsolete in their own countries to China. For a long time, high-tech and high-quality products ‘made in China’ had a resulting stigma. As the degree of opening up to the outside world extended, China gradually absorbed and developed its relations with foreign-owned enterprises so as to obtain access to technology, and improved its own technology level by creating more opportunities for economic development.

Foreign investment has not only granted access to advanced foreign technology, but also provided China with the opportunity to learn advanced management techniques. However, although there was an opportunity to grasp advanced electronic and chemical engineering, many of these foreign-owned enterprises were in no hurry to provide technical training to Chinese personnel, and imparted little in terms of management experience. Consequently, improving Chinese management standards and increasing productivity remains crucial.

Prior to the reform and opening-up, China placed emphasis on developing heavy industry, but this was changed in favour of light industry so as to attract foreign investment. From the start of these reforms until the mid-1990s, light industry as part of total industrial output rose considerably, but the development of the high-tech industry was relatively slow.

China changed its approach and strengthened its relations with western countries, especially technological leaders Germany and France, that introduced a host of advanced technologies related to car and airplane manufacturing, and communications. Cooperation with car manufacturing giants such as Volkswagen from Germany and Citroen from France enabled China to raise the quality of its manufacturing within a short period of time. By 2011, China had produced 18.4 million cars, among which 840,000 finished vehicles were exported to over one hundred countries. In 1990, China had only produced 510,000 cars.

The Chinese government provided a number of supportive policies to help develop the automobile industry. Colleges, universities and scientific research

institutions also collaborated with German and French enterprises to produce key technologies, especially in accelerating research and development which resulted in China’s car manufacturers providing powerful technical assistance.

In short, China and western European countries have enjoyed extremely effective cooperation in technical fields. The Chinese Prime Minister Zhu Rongji paid an official visit to Germany in 2000, and said ‘Germany’s investment in China won success by its quality rather than quantity.’

The Chinese government have introduced a series of laws and regulations directed at opening certain fields, as they required foreign owned enterprises to collaborate with Chinese enterprises in order to enter into specific markets and further expedite the introduction of modern technology. In addition, the government still encouraged domestic enterprises, especially those in high-tech fields to merge, reorganize and establish large enterprise groups. This was supported by favorable policies which helped boost revenues and credit, so as to protect its products and services in the domestic market. In early 2007, the government decided to implement a single tax rate of 25% for foreign owned and domestic enterprises, thus alleviating pressure on domestic enterprises. Previously, foreign-owned enterprises enjoyed a preferential tax rate of 15% with domestic enterprises paying 33%.

The government have always strived to attract the US and other Western countries to use advanced technology and invest. In the first decade of the 21st century, China had become one of the words biggest producers of computers, mobile phones, and electronic equipment. They benefited greatly from large multinational companies who invested heavily, such as Microsoft and Nokia.

6. Employment

The Chinese population is larger than the labour force. Foreign-owned enterprises have created many employment opportunities making a huge contribution to reducing unemployment. In 1991, foreign owned enterprises employed 5 million people, which increased to 10 million in 1993 and 16 million in 1996. A total of 19 million by 1997 amounting to around 3% of the total labour force, with the garment industry occupying the largest proportion. Looking at China’s overall employment situation, the contribution of foreign owned enterprises alone was not enough to resolve imbalanced unemployment issues. They were mainly concentrated in south-eastern coastal regions like Guangdong and Fujian province, and so there unemployment rates were lower. However, central and western regions, especially rural areas, with relatively little investment, had high unemployment.

The government took measures to encourage large domestic enterprises to expand from wealthy provinces into central and western regions and rural areas, and foreign-owned enterprises were offered tax incentives to move into these regions. Even so, employment continued to be the biggest problem facing the Chinese economy. According to official statistics, the labour force grew by 20



million a year with only 12 million new employment opportunities created. Productivity increased with the use of more advanced technologies, and enterprises generally needed less labour. Some enterprises, especially large state-owned companies, collapsed, further reducing the number of available jobs. In 2011, China released official figures stating that the unemployment-rate in towns and cities was 4.1%, however unofficial statistics place surplus rural labour at more than 20%.

The following chart shows China’s official registered unemployment rate for towns and cities.

Chart 8: Registered Unemployment Rate for Towns and Cities

Year Unemployment Rate (%)

1999 3.1

2000 3.1

2001 3.6

2002 4.0

2004 4.3

2005 4.2

2007 4.0

2011 4.1

2012 4.1

7. Balance of Trade

The reform and opening-up policy had an obvious impact on foreign trade. Before 1978, China’s twelve state-owned trading companies had monopolized foreign trade, but restrictions to foreign trade were relaxed following the reforms, with both private and foreign-owned enterprises playing a significant role. The rapid rise of foreign trade led to Chinese products being sold on the global market, and to exports becoming the backbone of the Chinese economy.

The Chinese export market developed quickly, and amounted to $9.75 billion in 1978 which increased to $47.52 billion in 1988, $183.71 billion in 1998, $1.42 trillion in 2008, and over $2 trillion in 2012 making China the world’s largest exporter, with Chinese products reaching every corner of the world. Within this context, foreign exports have been instrumental to China’s development. Between 1980 and 1993, exports from foreign owned enterprises increased by 51%. In 1980, they only occupied 0.05% of total exports, which increased to 27.5% by 1993.

Foreign-owned enterprises related to industries and fields specific to garments, electrical products and machinery experienced a breakthrough. In 1993 for instance,

50% of exported televisions, 60% of sports goods, and 53% of industrial machinery were produced by foreign owned enterprises. However, it is worth mentioning that although these exported products have been included in China’s total export figures, in reality some raw materials, equipment and technology required for these products have been imported by foreign owned enterprises, thus creating a trade deficit. From the mid-1990’s, China adopted a series of measures supporting the development of private enterprise, among which was an important measure to reduce the RMB exchange rate so as to improve the competitiveness of domestic enterprises on the global market, and thus create a trade surplus.

These policies were extremely effective, and the trade surplus continued to improve year on year. In 1993, China’s trade deficit of $12.2 billion was transformed into a surplus of $24.1 billion in 2000, and $231.1 billion in 2012. As China’s trade surplus increased, the country’s foreign exchange reserve was also increased. In 2006, China already had the world’s largest foreign exchange reserve which reached $3.31 trillion. Through the following chart, we can understand how China’s trade surplus dramatically increased prior to 2000.

Chart 9: 1975–2000 China’s Foreign Trade Figures (Unit: $100 million)

Year TradeTotal

ExportTotal

Import Total

Balance of Trade

1975 148 73 75 -2

1978 206 97 109 -12

1980 381 181 200 -19

1985 697 274 423 -149

1986 738 309 429 -120

1987 827 395 432 -37

1988 1028 475 553 -78

1989 1116 525 591 -66

1990 1155 621 534 87

1991 1356 718 638 80

1992 1655 849 806 43

1993 1957 917 1040 -123

1994 2366 1210 1156 54

1995 2809 1488 1321 167

1996 2899 1511 1388 123

1997 3252 1828 1424 404

1998 3240 1838 1402 436

1999 3606 1949 1657 292

2000 4743 2492 2251 241



‘Civilisational Repositioning’ on China’s Terms

Based on the aforementioned content, we can see that economic and trade cooperation with various countries across the world is the key to establishing tight relations. Developing foreign relations rather than applying dogmatic principles should be the main starting point for developing foreign relations.

In 2005, China’s State Council released the White Paper, ‘China’s Road to Peaceful Development’. From this White Paper, we can see that China already knew that by strengthening cooperation as a global economic entity rather than being confrontational was enough to realise and maintain state interests. Sino-US relations were among the core issues. The US is still the world’s sole superpower, but China will possibly overtake it to become the world’s largest economic entity by 2020. Managing Sino-US relations is extremely important if China is to realise a revival on its own terms, and establish a harmonious world.

Relations between the US and China in terms of the economy involve extensive common interests, and can be used bilaterally. The US is China’s main source of foreign trade and investment, so the economy will inevitably suffer a massive impact should trade to the US be held back, or investment die off. According to the US, China is a significant strategic location in which there is an excellent rate of return. The US imports products from China’s labour intensive industries which they do not produce themselves; therefore importing Chinese products cannot impact on the US economy. Of course, it cannot be disregarded that along with China’s rapid growth as a national power, Sino-US competition in the Asia-Pacific region has become a fierce political issue, with the possibly of this extending to military fields.

China and the US have a dialectical relationship, being both partners and opponents. Such a relationship could bring about conflict, although the possibilities are extremely limited. They could not possibly enter into a Cold War situation, or a large-scale violent conflict like the World Wars. It is undeniable that in the future, regardless of whether partnerships or conflicts emerge, China will continue to grow which will enable it to enjoy an international position equal to that of the US.

In view of China’s foreign relations, (including those in development with the US), there are two different paths to be aware of when undergoing civilizational repositioning:

Firstly, the importance of supporting China’s economic development, especially with oil supply. As China’s economy develops, their need for oil is going to increase. In 2004, China surpassed Japan to become the world’s second largest consumer of oil following the US. In 2011, global consumption amounted to around 4.06 billion metric tonnes of which the US consumed 833 million, followed by China with 461 million, and Japan with 201 million. Thus, China’s oil reserves and productivity cannot satisfy its growing demand for natural resources. Their consumption is growing annually at a rate of 7% compared with its annual production increase of 2%.Therefore, China must import large quantities of oil to ensure their economic development. In 2011, China imported 56.5% of its petroleum. So as to safeguard energy security, China must play close attention to strengthening their relations with developing oil producing countries.

Their oil enterprises should use advanced technology for potential domestic drilling, but also formulate policies for the future which will increase overseas investment in the oil industry, especially in the Middle East and Africa.

In addition to oil, China also needs to further attract investment and advanced technology so as to ensure its stable economic development. In the thirty years following the open door reforms, foreign investment has enabled China to make the transition from quantity to quality. In 2007, China’s State Council issued the ‘Catalogue of Industries for Guiding Foreign Investment’ which listed the investment they wished to encourage as well as the investment they wished to restrict or prohibit. The catalogue stipulated that a portion of the state’s economic security should be composed of strategic and sensitive industries which should be managed in both a cautious and open manner. Clauses can be adjusted as appropriate when planning domestic development and opening up to the outside world. Encouraging foreign investment will enable an expansion of the manufacturing industry into new technologies, equipment manufacturing and various other non-traditional industries. Meanwhile, some domestic companies with strong production capacities in traditional manufacturing industries were able to access advanced technology without foreign investment.

Adjustments were made to the orientation of the policy to simply encourage exports. Foreign exchange reserves increased rapidly aimed at dealing with the oversized trade surplus, so there was no longer any need to continue to encourage exports. China’s scarce or important non-renewable mineral resources did not further encourage foreign investment. Some important non-renewable raw materials were disallowed for foreign investment for exploration and mining. China also either limited or prohibited the admittance of foreign investment projects which produced high material and energy consumption, or high levels of pollution. In spite of various limitations, a large amount of foreign investment continued to flow into China. During the first seven months of 2008, the introduction of ‘The Foreign Investment Industry Guidance Catalogue’ did not impact on China’s ability to attract foreign investment, which had in fact substantially increased from 2007.

Secondly, so as to meet China’s requirements in various regions in the world, especially in expanding political influence towards developing countries. China’s process of expanding political influence began with countries in which there had already been friendly exchanges through history, among which are Arab countries. It was then hoped that close relations could be established with China of peaceful coexistence, and mutual understanding and support. Since the 1990s, China’s legacy of protective foreign policy underwent a process of change in accordance with practical needs to actively expand political influence across the world.

China’s neighbours in Southeast Asia had established patterns of foreign exchange, and thus enjoyed a prominent position in China’s diplomatic effort. China’s development and prosperity requires peaceful and stable surroundings, and a commodity export market. Development with Southeast Asian countries including Thailand, the Philippines, Bengal, Cambodia, and Laos was also conducive to limiting Japans influence, winning over support with regards to Taiwan issue, and



containing the expansion of the US in the Asia-Pacific. What is worth noting is that China also strengthened its contact with countries in which the US had tense relations, such as the Sudan and Venezuela. These countries generally had great potential for exporting oil and natural resources which would directly benefit China. These measures weren’t aimed at opposing the US and were in fact aimed at avoiding a clash, especially for countries and regions which are geographically far away from China. China has developed relations with US, as well as relations with anti-US countries, embodying the idea of comprehensive foreign relations.

China’s regional relations with foreign countries are not focused on military and security, and military diplomacy is generally more about reciprocal visits and personnel training. However, China’s militarily cooperation with these neighbouring countries is extremely tight, especially Russia from whom China has always been their largest buyer of arms since its independence. China and the SCO’s members have also maintained close cooperation. Although this is a regional rather than global international organisation, it demonstrates China’s ambitions to expand influence. Of course, just as the White Paper ‘China’s Road to Peaceful Development’ points out, China will not create a group alliance with any other country. One of the main principles of the Five Principles of Peaceful Coexistence is state sovereignty, and an adherence to peaceful development.

China has used these three fundamental measures to strengthen foreign relations:

Economy: China provides economic aid in the form of non-reimbursable assistance, loans, and by establishing investment projects. Statistically, the scale of China’s FDI has already grown from $2.7 billion in 2002 to $87.8 billion in 2012, and is mainly focused on finance, minerals, and oil. In addition, China has signed free trade, bilateral trade and regional trade agreements with a number of countries.

Politics: Signing bilateral cooperative agreements and entering into regional or global international organisations has strengthened relations and interactions with various countries, as well as built up mutual trust.

Culture: Culture is the most dynamic path. China has offered the youth from other countries government scholarships, and established Confucius Institutes across the world which hold cultural festivals and art exhibitions. China also has various international media such as China Radio International, the Xinhua News Agency, China Central Television (CCTV), and China Today. They also provide for foreign audiences with transmissions in multiple languages, including Arabic, so as to narrate China’s story. China’s increased cultural influence can be attested for by the numbers of foreign students in China’s many universities, which has risen from 8000 students in the late 1980s to 320,000 in 2012.

It is clear that China’s aim to develop foreign relations has more than satisfied economic requirements. It therefore needs people from across the world, especially those wishing to establish tight relations with China, to create a favourable national image. For this reason, China’s national interest, to protect itself, has created a favourable atmosphere and environment, finally realising unity between countries and becoming an important influence on the world.

3

Civilisational Repositioning – Factors for Arab People to take into

Consideration

What does the Arab World have?

China’s main requests of the Arab World are embodied in three aspects; oil, investment and political support.

Foreign trade: China exports a large amount of commodities to the Arab World, but the Arab World does not offer any real advantage over other regions in the world in this regard. In fact, there are many other countries of more strategic importance to China, for example the US and Europe, with their larger populations and higher standards of living, making for a stronger consumer base and market.

Oil: The Arab World accounts for 57.5% of the world’s total oil reserves. In this regard, Saudi Arabia ranks first, Iraq third, Kuwait fourth, United Arab Emirate fifth, and the non-Arab country or Iran second. What needs to be emphasised, is that when compiling statistics relating to Arab oil reserves, oil sands have not been accounted for, although their reserves are enormous. Oil sands are a compound of bitumen, sand, high grade clay and water. On account of high production costs and complicated extraction, it has not been included in total oil reserves. Since the beginning of the 21st century, the development of oil extraction refining technology has enabled oil sands to be extracted on a large scale, beneficial to the economy. At present, Arab oil producing countries amount to 30% of the world’s total, among which Saudi Arabia occupies 42% and the United Arab Emirates and Kuwait around 11%. In addition to oil resources, Arab countries hold 29% of the world’s natural gas reserves.

The following chart shows the oil and natural gas reserves of Arab and other major countries.


Chart 10: 2002–2006 Oil reserves in Arab and other major countries.

(Unit of measure is ‘1 billion barrels’, ‘world totals’ includes the total reserves of the aforementioned as well as other unmentioned oil producing countries.

Country 2002 2003 2004 2005 2006

Saudi Arabia 262.79 262.73 264.31 264.25 264.21

Iraq 115 115 115 115 115

Kuwait 96.5 99 101.5 101.5 101.5

UAE 97.8 97.8 97.8 97.8 97.8

Libya 36 39.13 39.13 41.46 41.46

Qatar 15.21 15.21 15.21 15.21 15.21

Algeria 11.31 11.8 11.35 12.27 12.2

Oman 5.7 5.56 4.8 5 5.4

Sudan 0.81 0.81 0.81 0.9 5

Egypt 3.7 3.7 3.7 3.7 3.72

Yemen 4 4 4 4 3

Syria 3.15 3.15 3.15 3 3

Tunisia 0.31 0.31 0.31 0.31 0.4

Bahrain 0.13 0.13 0.13 0.13 0.13

Total Reserves for Arab Countries

652.41 658.33 661.2 664.53 668.03

Iran 130.69 133.25 132.46 136.27 136.27

Venezuela 77.31 77.23 79.73 80.01 80.01

Russia 60 60 60 60 60

Nigeria 34.35 35.26 35.88 36.22 36.22

US 22.68 22.7 21.89 21.37 21.76

China 18.25 18.25 18.25 18.25 16

Mexico 17.2 16.04 14.8 13.7 12.35

Brazil 8.33 8.5 10.6 11.24 11.77

Norway 10.4 10.1 9.67 9.69 7.85

Angola 5.41 5.41 5.41 5.41 8

Canada 4.49 4.5 4.7 4.7 5.12

Global Total Reserves

1124.34 1138.6 1145.14 1153.91 1160.68

Percentage of Arab countries

58 57.8 57.8 57.6 57.6

Chart 11: 2002 – 2006 Natural gas reserves in Arab and other major countries.(Unit of measure: 1 billion cubic metres, ‘world totals’ include the total reserves of the aforementioned and unmentioned oil producing countries.)

Country 2002 2003 2004 2005 2006

Saudi Arabia 6646 6754 6834 7153 7154

Iraq 3190 3170 3170 3170 3170

Kuwait 1557 1572 1572 1586 1570

UAE 6060 6060 6060 6060 6060

Libya 1503 1491 1491 1491 1420

Qatar 25783 25783 25783 25783 25783

Algeria 4523 4545 4545 4580 4504

Oman 886 880 856 856 856

Sudan 85 85 85 85 86

Egypt 1657 1725 1870 1890 1940

Yemen 453 479 479 479 479

Syria 371 371 371 310 290

Tunisia 78 78 78 78 78

Bahrain 92 92 92 93 93

Total Reserves for Arab Countries

52884 53085 53286 53614 53316

Iran 26690 27570 27500 27580 27592

Venezuela 4181 4219 4287 4315 4317

Russia 47572 47572 47572 47574 47592

Nigeria 4997 5055 5229 5152 5153

US 5294 5294 5353 5452 5790

Indonesia 2557 2557 2769 2769 2770

Turkmenistan 2010 2010 2010 2011 2833

Uzbekistan 1875 1875 1875 1875 1875

Norway 3667 3188 3286 3286 2332

Kazakhstan 1841 1841 1841 1841 2833

Canada 1664 1672 1603 1603 1642

China 1510 2229 2200 2350 2266

Global Total Reserves 176883 179262 179704 180519 181926

Percentage of Arab reserves

29.9 29.6 29.7 29.7 29.3

Civilisational Repositioning – Factors for Arab 91


What should be mentioned is that for oil producing countries, the importance of being able to extract the smallest amount should be worth no less than oil reserves. For quite some time, Arab states have relied on capital from foreign enterprises for advanced exploration and extraction technology. Since the 1970s, Arab states have established enterprises to explore, develop, and exploit, but the main technology has always been in the hands of large enterprises from US, Europe and Japan. Arab oil companies cannot access such advanced technology and so have no choice but to go through oil companies from other countries to purchase assets and technology as a means to developing their industry. Along with the 2008 soar in oil prices (when a barrel cost between $100–$150), investment in Arab oil exporting countries was plentiful, but many private oil companies also began to spring up; 18 in the United Arab Emirates, 10 in Kuwait, 8 in Bahrain, 6 in Saudi Arabia, and 1 in Qatar. These newly established privately-owned companies were engaged in the exploration and development of oil fields and without exception used overseas technology.

Investment: Some Arab states rely on the substantial earnings generated from oil exports, and their governments control their increasingly enormous sovereign wealth and scale of funds. The government systems of these various Arab countries as well as other regions all require enormous investment. In addition, the Arab World has a host of rich and powerful people who hold large amounts of capital which they invest overseas. There are around 200,000 Arab investors occupied in overseas investment of which 37% are from Saudi Arabia, 28% are from United Arab Emirates, and 17% are from Kuwait. Although there is no detailed data relating to overseas Arab investment, a related organisation estimates that in 2002, total Arab foreign investment amounted to between $1 trillion and $3 trillion which had already reached between $1.5 trillion and $4 trillion by 2007. Around 70% of this investment has gone to the US, with residual amounts concentrated in European countries, and a small portion to Southeast Asian countries. What needs to be explained is given the weak technological and innovative capabilities of Arab countries, it is clear that foreign investment in Arab countries doesn’t resemble China’s investment into the high technology and equipment manufacturing industries. It instead flows into securities, stocks, and real estate. Even so, official and civil capital reserves can be used by Arab states to strengthen the enormous potential and capability for investment in China. Even the orientation and quality of investment can be controlled in cooperation with Chinese companies. In short, Chinese-Arab bilateral relations can create mutually profitable conditions through investment.

In 2011 for example, statistics from the Arab Monetary Fund (AMF) revealed that oil accounted for 70% of their total revenue and more than 90% in some countries.

Chart 12: 2011 Proportion of Fiscal Revenue generated from Arab oil exports (Unit of measurement: $100 million)

Country Oil Export Total Fiscal Surplus

Saudi Arabia 3000 816

Kuwait 1018 446

UAE 1116 377

Political Support: At present the Arab World is lagging behind in all fields of civilisation, resulting in a correspondingly weak position in world politics. However, the Arab World has taken advantage of its number of individual states and enjoys a decisive position in international organisations, especially the United Nations. With regards to Chinese-Arab relations, the political value of Arab people rests in the ability for Arab countries to act as a political group, enabling them to establish tight relations with China, and support China politically (for instance with votes in elections) during diplomatic activities at international organisations. It should not be forgotten that if the Arab World expects to implement civilizational repositioning, each country will need to apply different foreign policies if they are unable to cooperate as a single entity, as part of the League of Arab States. In addition, the impact of a country or region in world politics often goes hand in hand with military power, thus the weak military power of Arab countries is a significant check on its influence. In short, the Arab World has a limited ability to support China and other countries.

In conclusion, in order to establish tight relations between China and the Arab World, the starting point for undertaking civilisational reposition should be to construct a unified action plan centred on economic cooperation in the field of energy. Politically as individual states, the Arab states exert relatively little influence.

The Arab World, China and the Future

China’s momentum of development and prospects for relations with the Arab World are favourable. There have already made remarkable developments from official to civil capacities in the 21st century. With growing economic strength, China’s impact on international society grows day by day. In spite of having different starting points, the Arab people have responded positively. Some people hope that China’s strength is enough to create a world balance with the US, currently the only superpower, which would lessen damage caused by the US, especially with regards to Palestine. Some recognise that China’s pragmatic diplomacy protects national interests and avoids tensions with other major nations so as to enable development and mutually beneficial cooperation, especially in terms of the economy. Others believe that China and Arab countries have always enjoyed friendly relations, and on an emotional level respect their rise to power. Many see how the western media viciously attacks China on issues such as human



rights and product quality. These are detested, as Arab people believe they face similar conditions, and thus should stand by China against Western countries.

Observing their development, the future of bilateral relations will enable further developments in the following fields.

1. Economy, Trade, Investment and OilPart 1. Trade If considered a single entity, the Arab states are China’s seventh largest trading

partner, and China their second. In recent years, Chinese-Arab trade has developed rapidly, amounting to $65.5 billion in 2006. The Arab States’ exports to China were worth $34 billion, and China’s exports to Arab states were worth $32 billion. By 2011, this total figure had reached $195.9 billion and rose again to $222.4 billion by 2012. What needs to be mentioned is that the majority of imports from China are textiles, mechanical and electrical products, whereas China mainly imports oil. Oil has been the key factor for holding together balanced Chinese-Arab trade relations. Although these developed rapidly in the 21st century, they pale into insignificance when compared with China’s total foreign trade of $3.6 trillion. Since 2002, the value of Chinese-Arab trade as a portion of China’s total trade has remained stable, largely a product of China’s progressive policies in expanding global trade, with very little contribution from the Arab side. China’s main Arab trading partners consist of the United Arab Emirates, Saudi Arabia, Oman, Sudan, and Yemen, which engages in either exporting oil to China, or attracting Chinese industry for oil exploration. Even so, Chinese-Arab economic complementarity means that there is still a great deal of potential for cooperation in terms of trade.

Part 2. InvestmentIn the 21st century, China’s investment in Arab states grew rapidly. Until 2010,

the country had invested a total of $15 billion into Arab countries, focused mainly on light industry, construction, and oil exploration. However, by 2010 this contrasted to a total of $68 billion foreign investment. Meanwhile, the scale of Arab investment into China has also been minimal, amounting to a total of $2.58 billion by 2010. Chinese-Arab mutual investment has strengthened but still retains enormous capacity for development, as both have large amounts of capital to invest abroad. In 2010, China’s non-financial industry OFDI (outward foreign direct investment) reached $60.1 billion, and over $300 billion was invested in stock. Arab countries have invested over $1 trillion in the US and Europe. Investment could be used as an important path for enhancing relations between Arab countries and China.

Part 3. Oil China’s depleted oil reserves have resulted in increasing amounts of oil imports

from Arab countries. According to statistics, in 2010 China’s dependence on imported oil exceeded 55% with 240 million tonnes being imported, half of which was from the Middle East. In recent years, China’s energy use has maintained

double-digit growth rates, and it is predicted that more than 70% of its total oil will be imported from the Middle East by 2015. In this context, China hopes that Arab countries, Saudi Arabia and the United Arab Emirates in particular, and also other oil producing countries such as Sudan and Yemen, will proceed with large scale oil exploration so that political, trade and investment relations can be established. Therefore, China could increase its FDI into oil projects in Arab states and shares in foreign oil companies, and form joint ventures with petrochemical companies in oil producing countries such as Kuwait. They could also use concessional loans provided to Arab countries to engage in various infrastructure projects such as building ports and roads. Such measures would establish close relations with Arab countries. At present, China imports from Saudi Arabia, Angola, Iran, Oman, Russia, Sudan Venezuela, Kazakhstan, Libya and the Congo. Only four are Arab states. In view of the fact that Arab states have enormous oil reserves, and China’s requirements are increasing day by day, the prospects for cooperation in this field are vast.

2. Politics and CultureArab countries have enjoyed smooth diplomatic relations with New China since

the 1955 Bandung Conference. In 1956, China initially established diplomatic relations with Egypt, Syria and Yemen, and later with other states. In 1990 relations were finally established with Saudi Arabia which marked the completion of established relations with all 22 Arab states. What is worth noting is that although in recent years, relations between China and Arab states have quickened in pace and tightened, cooperation is driven by energy resources and trade. Compared with Europe and the US, China-Arab relations are mainly confined to high-level and elite interaction. For example, Chinese leaders have conducted official meetings with Arab leaders so as to sign cooperative agreements and establish partnerships. In addition, China and the League of Arab States came together in 2004 to establish the China-Arab States Cooperation Forum. Although this strengthened prospects for open interaction of various fields within political and civil levels, focus was still placed on cooperation in terms of trade and investment. What also shouldn’t be disregarded is that within this framework, four China-Arab Friendship Conferences and five China-Arab Relations Inter-Civilization Dialogue Seminars have been held, in which authoritative academics from various disciplines come together to discuss the interactions of international politics and civilisations, causing ideological storms. However, from follow-up work, substantial achievements are still lacking.

For a long time, the ‘elitist’ characteristics of Chinese-Arab relations are reflected in the degree of cultural exchange. In recent years, education has enabled breakthroughs in strengthening non-governmental Chinese-Arab relations, as an increasing number of Arab students study in China. According to statistics, in 2003 only around 300 Arab students studied in China, increasing to over 1000 students from Saudi Arabia alone in 2011. In addition, China has established a number of Arab language departments in higher education institutions and strengthened its reserve of talents researching the Arab World. Confucius Institutes have also opened



in Egypt and Tunisia to teach the masses about Chinese culture and language. However, from the perspective of translation between Chinese and Arab languages, and book production, Chinese-Arab cooperation has been extremely limited. Although authorities on both sides have signed a number of publishing agreements, very little is actually available, limiting cultural exchange to the level of the elite.

The information revolution has turned the world into a global village, but regardless of this, China and the Arab World still regard each other as being from a remote and unknown world. There is very little Chinese-Arab cultural exchange, which in part is due to language, and also the fact that Western countries control culture in the Arab World, and Arab culture has been unable to leave its mark on other countries. This distance between the Arab World and China has led to their people turning to western media, an extremely influential third party, as a means to understanding each other. Chinese-Arab cooperation has strengthened in various fields, but there is still significant room to improve cultural exchange in the future; this will help further strengthen mutual understanding.

Why is the Arab World looking to China for Civilisational Repositioning?The fundamental objective of civilisational repositioning is to advance one’s own

society. Based on this, the Arab World’s perspective is to aim for the overall advancement of their civilisation rather than simply building ‘non-economic’ cooperation. China has enough to justify establishing tight relations, although at present the Chinese-Arab centre of gravity is still economic.

Should the decision to undertake a process of civilisational repositioning be decided by China rather than the Arab World? Chinese-Arab relations must firstly be in China’s interests, especially in terms of safeguarding oil supply and guaranteeing that its products can be exported. Arab people must develop economic relations with China, but in the context of an Arab revival set out a plan which enables all round cooperation.

By seeking to establish a process which can bring about civilisational repositioning, the Arab World must first be capable of seizing control of their natural resources and independently formulating economic policies. Doing so is also essential for managing Chinese-Arab relations in the future. As described in the first part of this book, should a country wish to seek out a path of development without dependence, these two points are among the most enlightened that should be taken into account. Efficient development and the creation of an advanced civilisation is a two-sided coin. One serves as the underlay, and allows the other to become possible.

On this basis, the Arab World’s civilisational repositioning must also benefit China. Should China require oil in the future, Arab people can plan out what advanced technology they are lacking, and invite China to bring theirs which would promote internal development, advancement, innovation, and quickly lessen the disparity with developed countries. Arab people require technology for oil exploration and extraction, and access to such would allow them to strengthen sovereignty over their own natural resources. Of course, unlocking the processes of development without dependence requires that Arab people are fundamentally independent, and able to withstand the impact of overseas pressures. Arab people

need China’s support in the international arena with regards to its political affairs, so as to allow Arab political affairs and development processes to undergo transformation. From succumbing to powerful imperialists harming the interests of Arab people, to seeking support from China, the world’s energy power. This can resolve a lot of Arab problems, and create a more just atmosphere. Doing so would enable the Arab World to rid themselves of external pressures and kick-start their development in a more favourable environment. Finally, an improved overall international position would be a great leap for their civilisation.

China and Israel have a positive and cooperative relationship, so China’s support of Arab affairs may seem like a contradiction given that Israel plays a very complicated part in Arab problems and that Arab states are completely opposed to its interests. The writer believes that China’s relations with Israel are strategic and have been established for direct benefit. Israel officially recognised the People’s Republic of China on 9th January 1950 before other Arab states. However, China was slow to establish diplomatic relations. Following the 1955 Bandung Conference in Indonesia, China made large adjustments to its Middle Eastern policy, especially with regards to the Arab–Israeli conflict. China sided with Arab states, reflected in a cooling of China–Israeli relations. From the late 1970s, and after China reform and opening-up, China-Israel relations improved but were largely focused on military fields as China wanted to obtain advanced western military technology. Although China’s military cooperation with Israel was smooth until the Madrid Peace Conference, aimed at resolving the Arab-Israeli conflict, opened in October 1991, China quickly established formal diplomatic relations in January 1992. Following their establishment, China and Israel’s military cooperation continued to develop, and expanded into economic, trade, culture, and science. At this time, the US put constant pressure on Israel to stop providing military technology to China, which they eventually did in 2005 following an agreement to ‘jointly respond to challenges in global security.’

In short, China-Israel relations face a number of limitations: Firstly, the US will always interfere and influence their relations, due to the US-

Israeli alliance. Secondly, China’s main reason for developing relations with Israel was to access advanced technology, and to develop its bilateral trade and the economy. There has however been limited strategy. Thirdly, China actively promotes the establishment of a multi-polarised world, but Israel continues to support the US as a hegemonic leader, thus benefiting from this contradiction in ideology. Fourthly, and most importantly, the Arab World offers great advantages over Israel in terms of energy resources, investment, and market size which operate without US interference, making it of far greater strategic importance. There are deep contradictions between the Arab World and Israel, however for Arab people, China take precedence even if they have diplomatic relations and smooth militarily cooperation in progress with Israel. China still has the potential to offer balance to the Middle East’s problems by expressing support for their people’s just cause. China’s position should come naturally as Israel is more for a trade partner, rather than a strategic alliance.



China and Arab countries exchange and cooperate in various fields, and realising a national revival is a great dream they both share. However, looking back on the first ten years of the 21st century, such pursuit has resulted in little, and remains a hope for the future. Arab people are not sufficiently prepared, and the same is true for China.

China has made tremendous achievements in development. However, China has devoted itself to bringing in European and US industrial projects, yet those sensitive and advanced technologies are still monopolised by Western countries. China’s technological achievements have not been the focus of the world’s attention, and although it has a number of large-scale enterprises, they have yet to create a global brand. Although China’s economic development has been rapid and living standards have improved markedly in recent years, the most important task China faces is the 100 million people who remain below the poverty line. China cannot yet exert its full potential and influence in international political affairs. This could account for why China has taken a neutral stance and abstained from voting as a permanent member state of the United Nations Security Council on a number of sensitive issues, even those involving national interests. Of course, this is in accordance with China’s pragmatic diplomatic policy to ‘keep a low profile and bide its time, while getting something accomplished.’

China has already started working to resolve the various problems it has encountered on its road to revival. In the fields of science and technology following the reform period, invention and innovation was encouraged which led to the National Patent Office being established in 1980, and the Patent Law in 1985. The number of Chinese patents rapidly increased and exceeded 1.25 million by 2004, of which 87% of patent holders were by Chinese, and 13% foreign. In 2007, Chinese patents had already increased to 2.08 million, of which 17.4% were inventions, 47.3% were patents for utility models, and 35.3% were design patents. In accordance with data from the UN’s World Intellectual Property Organisation (WIPO), China followed the US and Japan as the third largest country for patent applications in 2007, and had surpassed Japan with 400,000 patent applications by 2012. China’s technological deficiencies lie in the lack of invention and innovation of general purpose technologies (GPTs). Engines and network technology for example has already been developed extensively across the world, and are considered to be inventions of great significance.

Civilisational repositioning with reference to China is a vision for the future, because the conditions are not yet sufficiently mature for such a process to begin.

What is our response to ‘Why choose China?’ With this question, it is important to consider three factors.

Firstly, Arab people are not prepared. Arab people wish to implement civilisational repositioning, but firstly wish to unite so as to realise development without dependence, and to formulate a unified action plan for revival. Just as the first chapter of this book explained, this vital work is yet to be done. In addition, launching a process for civilisational repositioning requires a firm and tenacious level of leadership with foresight. These countries must strive to take reference from

China’s non-conformist development, and apply themselves to implementing an action plan that can be changed when necessary in response to mistakes made, and solutions found.

Secondly, Chinese-Arab friendly cooperation provides a realistic basis for Arab countries to complete civilisational repositioning. Firstly, China and the Arab World have enjoyed friendly exchanges throughout history, and now share common interests in a number of political issues which can strengthen cooperation. For example, both opposed US hegemony following the Cold War. Secondly, there is a strong complementarity in terms of the economy and energy resources between China and Arab countries. Both have real requirements and the development of relations provides opportunities.

Thirdly, China is not prepared for the Arab people to engage them in civilisational repositioning. As previously stated, on the one hand, China has not yet grasped enough advanced technology to meet the demands of an Arab revival, on the other, it does have enough influence in international politics. However, based on China’s economic data and future development plans, we can be sure that this will inevitably change in the 21st century. In the interim period, Arab people should do their level best, and spare no effort in doing so. To Arab people, realising civilisational repositioning with China and an Arab revival is not going to be easy, but such a chance should not be missed as it may only come once. If Arab people do not work for this themselves, why would China be interested in helping them?


Epilogue

Non-conformity is the most remarkable feature of China’s 1978 reforms, as this policy allowed enormous changes to take place in a very short space of time. The successful experiences of non-conformist development are something that Arab people can learn and take reference from. If the Arab World had devised an ideology for economic integration in the 1940s and implemented development without dependence, then they would have been in a better position to respond to globalisation in the 1990s and, like China, used it to bring about revival. China has used its economic development achievements to become an important presence on the world stage.

It is regrettable that over the past decades, Arab people have not done so. However, following these non-conformist development experiences could help realise development without dependence.

Arab people need to meet two conditions. Firstly, to make economic integration happen, and secondly to strengthen control of natural resources. Otherwise, Arab people will have no way of making use of their resources, essential for bringing about development and a revival of the Arab World.

China has given the world experience of non-conformist development. However, China’s experience will not necessarily fit all developing countries, especially if their national conditions are a long way from China’s in terms of land area, population, geographical location, natural resources, and degree of societal integration. It is certain, however, that China’s developmental experiences can be used by Arab people as a reference point. Although the Arab World has many similarities with China in terms of resources, it nevertheless lacks a feasible plan.

We often hear the Arab World and Europe being compared. With the establishment of the League of Arab States, the Arab World preceded Europe in terms of proposing economic integration. Europe’s process began in 1945, initially in Belgium, France, Federal Germany, Italy, Luxembourg, and the Netherlands, countries which signed a treaty to establish the European Coal and Steel Community (ESCS). In 1957, the European Common Market (ECM) was established, followed by the European Union (EU) in 1991. In spite of various disputes and divergences between EU countries, these countries have enjoyed continuous economic growth. Although Arab states exhibit a number of similarities, economic integration would be conducive to realising advancements in civilisation and a common development with consensus. However this has never been realised, a fact that is not without


significance. Political divergences and disparities between rich and poor are the main issues impeding the Arab World from formulating a concrete action plan.

This book concludes that by looking at China’s experiences of non-conformist development, leading to civilisational civilisational repositioning, the Arab World might develop enough to drive a revival. In the first half of the 19th century, Arab people began seeking a path to revival. Since invasion and the abandonment of colonialism, this path has been similar to China’s practical approach to non-conformist development. Of course, Arab people have never abandoned the notion of an Arab Renaissance. Truth lies in actions, however. Replacing fantasy with practical action like China will inevitably lead to revival for Arab countries.

Rifa’a al-Tahtawi was the enlightened thinker of the Arab renaissance, and his philosophy is similar to that of Deng Xiaoping. Tahtawi witnessed France’s societal and political development, and believed that this mode would benefit the Islamic world and enable it to advance. It is important to note that they sought to follow the example of European success without compromising Islamic teachings. Such thoughts have stemmed from a national revival, and these experiences brought about transformation which conformed to Arab national conditions and culture. This is identical to Deng Xiaoping’s realistic and practical ideology. Deng Xiaoping recognised the West’s capitalist economic achievements, kept them for reference, and then cherry picked the parts he believed might be used for China’s advancement. Finally, his philosophy was moulded to fit China’s national conditions. Regardless of any experiences, or how ideologies transformed or reformed, the ultimate objective always remained the same: to realise a national revival.

China has proved to the world that prioritising national interests combined with pragmatic development planning brings about and ensures success. Arab people’s pursuit of a road to revival has abandoned pragmatic ideologies, and has resulting in repeated failure to develop. Arab people might well realise from China’s experiences that a great national revival requires recovery of their initial pragmatic ideology. The core of such an ideology is a universal project. All must comply with serving the high objective of a national revival without overlooking a moral code.

The Arab World longs for a revival, and China can provide the region with experience from which to learn, and with future opportunities. If you say that since Napoleon’s military force opened the door to the Arab World, western powers (Britain, France, and the US etc.) from which stemmed exploitation which oppressed the Arab world, then it is hoped that China will become important in the world and will instead not behave like the west towards the Arab World, but instead stand together, and hand in hand create a just global environment, resolving the various problems obstructing Arab advancement.

We want to develop a positive relationship with China. Of course, this doesn’t involve flattery, as this would not be in the national interest. Close Chinese-Arab economic cooperation could bring wealth to both sides, but high level strategic interests alone are not enough to bring about Arab revival. We need to look instead at civilisation as a starting point when forging positive relations, and build a foundation which is mutually beneficial to our material and immaterial revival.

Arab people long for a brighter future, and the various opportunities China can provide should not be overlooked. By paying attention to China’s course from non-conformist development to civilisational repositioning, it is clear that establishing positive relations with China is vital. It will enable the Arab World to contribute to the realisation of the Chinese dream whilst also seizing the opportunity as early as possible to make the Arab dream come true.

Epilogue 103

Appendix 1: China’s Reform and Opening

Up Policy – A 30 year Chronicle (1978–2008)

18th – 22nd December 1978 – 11th Central Committee 3rd plenary session of the Chinese Communist Party convened in Beijing.The plenary session decided that the party’s key tasks had been transformed from class struggle to establishing strategic policies for socialist modernisation. The plenary sessions considered that ‘versatility should transform the development of productive forces and unadaptable productive relations and superstructures. Everything that does not adapt should be adapted in terms of the mode of management, activity and ideology. It should be a broad and profound revolution’. China’s reform and opening-up policy marked the beginning of a new era.15th July 1979 – CPC Central Committee and The State Council decided to test special administrative regions in Shenzhen, Zhuhai, Shantou and Xiamen.13th August 1979 – The State Council published ‘Regulation regarding the great development issues related to foreign trade and increased foreign currency earnings.’16th May 1980 – CPC – Central Committee and The State Council referred to these special areas formally as ‘special economic zones’.1st January 1982 – CPC Central Committee endorsed the ‘China National Agricultural Work Conference’ which indicated that at present the responsibility mechanisms for agricultural practices were all products of socialist collective economic systems, and so put an individual productive contracting system into force.20th October 1984–12th Central Committee of the Chinese Communist Party 3rd Plenary Session held in Beijing. The meeting was held in accordance with the ‘CPC Central Committee decisions regarding the reform of economic systems’, which stipulated the direction, nature, tasks, and guiding principles of reforms, and provided a framework guide to economic mechanism reforms.

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13th March 1985 – CPC Central Committee issued ‘Decisions regarding science and technology system reforms’. The decision was taken that science and technology on a macro scale should re-energise the economy, and that achievements in the field should be commodified so as to exploit technology markets. Promoting scientific and technological achievements would transform productivity and the development of high-technology industrialisation. 5th December 1986 – The State Council published the ‘Regulations regarding expanding enterprise reforms and strengthening dynamic enterprise.’ The regulation put forward that small publicly owned enterprises could lease and contract operations. Publicly owned large enterprises were required to implement a number of operational responsibility mechanisms. Each region could also choose a small number of large publicly owned enterprises to proceed with piloting a shareholding system.25th October – 1st November 1987 – Chinese Communist Party 13th National Assembly held in Beijing. The meeting elaborated on early socialist theory, and formulated three steps for following the century’s development strategy to modernisation. 5th September 1988 – Deng Xiaoping met with the Czechoslovakian President Gustáv Husák, and presented the celebrated thesis ‘Science and Technology are the primary Productive Forces’.12th – 18th October 1992 – The Chinese Communist Party’s 14th National Congress held in Beijing. The meeting summarised their practical experience since the 1978 3rd Plenary Session of the 11th Party Congress, and confirmed that the aim of economic reforms was to establish a socialist market economic system, and introduced Deng Xiaoping’s construction of socialism with Chinese characteristics to arm the party. 11th – 14th November 1993 – 14th Central Committee of the Chinese Communist Party 3rd Plenary Session. The plenary session passed the ‘CPC Central Committee – decisions regarding the establishment of a socialist market economic system’. The plenary session established the socialist market economic system which retained the states macro control with regards to the allocation of resources. Important steps to transform the operational mechanisms of state-owned enterprises and establish a modern enterprise system to fit market economic requirements, which had clearly-established ownership, well defined power and responsibilities, separated from government and scientific management.15th December 1993 – The State Council made the ‘Decision relating to tax distribution and fiscal administration systems.’25th December 1993 – The State Council produced the ‘Decision of the State Council on Reform of the Financial System’. The decision proposed that that aim of China’s monetary system reforms should be: ‘Under the State Council’s leadership, the Central Bank independently executes monetary policy with macroeconomic regulations and control systems. Policies are established to separate finance and commerce, and making the State-Owned Commercial

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Bank (SOCB) the main body working alongside a number of existing financial organisational systems. The financial market system was established to open up as part of a unified process with orderly competition and strict management. 11th January 1994 – The State Council made the ‘Decision to further expand the structure of foreign trade reforms’. On 1st April 1996, China substantially reduced 4,000 types of commercial import duties, and the aggregate levels of custom duties to 23%.18th July 1994 – The State Council put forward the, ‘Decision to expand reforms to the urban housing system’, which clearly stipulated the basis of urban housing reforms, among which included changing housing from a means of welfare distribution to a monetary wage distributed according to work done as well as the establishment of a housing accumulation fund. The most significant process of privatization was the selling of publicly owned housing, which urban employees were then allowed to sell on privately. On 7th August 2007, the State Council unveiled the ‘The State Council’s opinions regarding resolutions for urban low income families in difficulty’, which guaranteed that the market could be controlled and adjusted, and for the first time clearly stating that low-rent housing would supersede economically affordable housing as the centre of a housing guarantee system. 25th – 28th September 1995 – 14th Central Committee of the Chinese Communist Party 5th Plenary Session. The plenary session passed the ‘CPC Central Committee’s proposal for the economic and social development of the national economy in the form of the ‘9th Five Year Plan’ and a vision for 2010.’ It proposed that in order to realise the 9th Five Year Plan and the vision for 2010, two fundamental changes were required. Firstly, economic structures needed to transform from a traditional planned economy to a socialist market economic system. Secondly, economic growth patterns had to change from an extensive form to an intensive pattern. These two fundamental changes are related to the overall national economy making them of great strategic importance. They mark how China’s economic construction is looking to deepen their structural reforms, and improve the quality of development.1st December 1996 – China was accepted into the International Monetary Fund (IMF), and agreed to the eight clauses that enabled the exchange of RMB current accounts. Ahead of time, the IMF required 8th clause marked great progress in China’s foreign exchange management system reforms. 12th – 18th September 1997 – The Chinese Communist Party’s Fifteenth National Congress held in Beijing (which used a conference system) put forward the entire Chinese Communist Party’s guiding principles during the early stages of socialism for discussion. Firstly, the construction of a socialist economy with Chinese characteristics is in accordance with socialist conditions, and the development of a market economy is based on the continual liberation and development of productivity. Secondly, the construction of politics with Chinese socialist characteristics used by the Chinese Communist Party

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leadership will act as a foundation upon which decisions can be made for the people, in accordance with the law and the development of socialist democracy. Thirdly, the construction of a socialist culture with Chinese characteristics is exactly as Marxism guided in terms of aiming to cultivate idealistic, moral, educated, and self-disciplined citizens, and developing a modernised, global facing, future facing, democratic, and scientific national socialist culture. This guiding principle is an important aspect of Deng Xiaoping’s theory, and the basic line for the Chinese Communist Party’s economic, political and cultural expansion. By mobilising the whole party and people of all nationalities to unite, constructing socialism with Chinese characteristics will be extremely significant in the 21st century.5th – 15th March 1999 – The ninth National People’s Congress (NPC) second meeting held in Beijing. The meeting passed the People’s Republic of China’s constitutional amendment, and defined the non-public sector of the economy as an extremely important part of socialist market economics, which enormously accelerates the development of social productivity. Thirty years since the reform and opening-up policy, the state’s understanding of the non-public sector of the economy and formulation of relevant policies have experienced a process of exploration and improvement. In 1982, the 5th session of the National People’s Congress (NPC) 5th conference passed through the constitution and made comprehensive modifications, confirming that the lawful position of an individual economy should be complemented by a socialist public ownership economy. In 1997, the Chinese Communist Party 15th National Congress stated that the non-public sector economy would be incorporated into the framework of the primary stage of socialism, and that the non-public sector economy’s position within the national economy should receive unprecedented importance and affirmation. 22nd March 1999 – The State Council published, ‘The State Council’s ideas regarding the further advancement of development in Western regions’. China’s western development strategy was raised and implemented in favour of cultivating a unified single market, improving socialist market economics structures, driving the strategic adjustment of economic structures, promoting regional coordinated economic development, expanding domestic demand so as to increase the development space within economic growth and an enduring driving force; improving overall national ecological conditions, as survival and development of the Chinese nation will create an even better environment; in favour of further expanding opening up to the outside world, using the two markets at home and abroad, two types of resources, which is of great economic, societal, and political significance. 10th November 2001 – The Fourth World Trade Organisation (WTO) Ministerial Conference held in Doha. Qatar approved China’s ascension into the organisation, which marked the end of a 15 year endeavour, and China finally became a full member. Membership into the WTO in the Uruguay Round made the commitment to China’s rights, enabling them to enjoy the

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benefits of a multilateral trade system which over the years brought achievements in trade liberalisation and multilateral, stable, and unconditional benefits of a most favoured nation. Although China enjoyed the right to contribute their products to the international market, entry into the WTO brought challenges to the Chinese government and state enterprises. The government expedited these transitional functions, administrated according to the law, improved the standards of enterprise technology, quickened structural adjustment, and improved business administration which put forward new requests.8th – 14th November 2002 – Chinese Communist Party 16th National Assembly held in Beijing. The meeting established that China had reached a comfortable overall level in terms of food and clothing. It further proposed that building a moderately prosperous society by the end of the 2020s should be achieved by concentrating strength, overall construction can benefit billions of people by improving their standards of life to that of a well-off society with an economy that drives development, democracy can pass to soundness, science and education can take bigger steps forward, and culture can become more prosperous, society more harmonious, and quality of life more substantial. This period of construction must continue on for the coming decades until the mid-century when basic modernization can be realised, and China’s construction of a modernised socialist country creates prosperity, democracy, and civilisation.29th September 2003 – The General secretary of the CPC Central Committee, Hu Jintao convened the CPC Political Bureau Meeting. The meeting suggested that supporting the prosperity of northeaster regions and old industrial bases was the 16th National Congress’s most important task for building an all-round prosperous society. Various regions and departments were all require that form this new century of reforms and socialist modernisation and the height of long-term development. A profound understanding of the measures implemented to revitalise north-eastern regions and their various old industrial bases is of great significance. In order to further free our minds, deepen reforms, expand openness, and exert ourselves to promote institutional innovation and mechanism innovation, promoting the strategic adjustments of economic structures, expediting technological transformation of enterprise, and walking away from old industrial bases will make adjustments to reconstruction and promotion of a new way.31st January 2004 – The State Council published ‘Some Opinions of the State Council on Promoting the Reform, Opening and Steady Growth of Capital Markets’ which clearly pointed out that the rapid development of a capitalist market is extremely significant to the strategic aims of doubling the national economy by the end of 2020’s.26th August 2004 and 21st September 2004 – The Bank of China Limited and the China Construction Bank were separately established, and two solely state-owned commercial banks were entirely restructured into joint equity commercial banks with state shareholding.

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14th March 2004 – The 10th National People’s Congress (NPC) second meeting deliberated and passed the fourth amendments to the constitution, ‘The lawful private property of citizens may not be encroached upon’ and that ‘The State respect and safeguard human rights’. New revisions to the constitution accommodated the objective requirement to protect private property, expand the scope of protection for private property, and further perfect the private property protection system. Strengthening the protection of private property legality for citizens favours adherence and perfection of the basic economic system, and promoting the development of the non-state-owned economy; in favour of safeguarding civil liberties advanced in accordance with the rule of law; in favour of transferring extensive enthusiasm and creativity to the masses to create an all-round prosperous society.29th December 2005 – The 10th Standing Committee of the National People’s Congress (NPC) 19th meeting passed ‘Decision to abolish the People’s Republic of China regulations for the Agricultural Tax’ which was implemented in the 1950s and was a continuation of a two thousand year old category of taxes. From 2004, the State Council implemented the beneficial farming policy which either reduced or completely exempted agricultural tax.11th October 2005 – The 16th National Congress of the Chinese Communist Party 5th Plenary session passed, ‘CPC Central Committee’s proposal regarding the formulation of the national economy and social development for the 11th Five Year Plan’, which clearly stated the plan of action and objectives for the following 5 years of economic and social development. It proposed constructing a new socialist countryside as a major historical task, and introduced the ‘Three Rural Issues’ to show clearly the direction for present and future periods. 29th April 2005 – The State Council ratified, and the China Securities Regulatory Commission (CSRC) published ‘Notice of the China Securities Regulatory Commission on Piloting the Share-Trading Reform of Listed Companies’, and announced the start of reforms of non-tradable shares pilot schemes. Following the reforms of non-tradable shares, distribution management systems can assertively constrain the market value of stock issues as well as investors.8th – 11th October 2006 – The 16th National Congress of the Chinese Communist Party’s 6th Plenary Session passed, ‘Decision of the Central Committee of the Communist Party of China on Several Big Issues on Promoting the Reform and Development of Rural Areas’. The decision to ‘improve capacity for building a harmonious society’ was one of the most important issues raised. This important thesis raised the importance of enriching and developing Marxist theory, as it is the Chinese Communist Party’s reason for being socialist, and how another socialist theory of sublimation could be constructed. 16th March 2007 – ‘Property Law of the People’s Republic of China’ The 10th session of the National People’s Congress (NPC) 5th meeting was passed, and

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put into effect on 1st October 2007. This is one part of a system of socialist laws which relates to the adherence and improvement of the state’s basic economic system, improving the socialist market economic system, and ensuring as well as protecting the vast fundamental interests of the people. 15th – 21st October 2007 – The Chinese Communist Party’s 17th National Congress held in Beijing decided that a scientific outlook on development which was written into the party constitution. A scientific outlook on development was an important ideology which was inherited as well as developed by the central collective leadership of the Chinese Communist Party’s third generation. Marxism epitomised developing a global outlook and methodology, and is therefore in keeping with Marxist-Leninist and Maoist ideology. Deng Xiaoping’s Theory and the important ‘Three Modernisations’ are also of the same strain as they advanced with the times in terms of scientific theory. This is China’s guiding principle for economic and societal development, and is the significant strategic thinking behind the development of socialism with Chinese characteristics that must always be adhered to and implemented.9th – 12th October 2008 – Chinese Communist Party’s 17th Central Committee 3rd plenary session convened in Beijing. The meeting was focused on researching agriculture and rural problems, and passed the ‘Decision of the Central Committee of the Communist Party of China on Several Big Issues on Promoting the Reform and Development of Rural Areas’. The meeting emphasised that a firm and unswerving implementation extended thirty year land contracts. This law was quickly formulated so as to guarantee that the long-term stability of agricultural land contracts, and the rights of agricultural workers to use the land in the long term.

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Appendix 2: Deng Xiaoping’s South China Tour

From 18th January to 21st February 1992, Deng Xiaoping travelled through Wuchang, Shenzhen, Zhuhai and Shanghai for an inspection, and significant speeches that took place were published. ‘The South China Tour’ responded to the profound question in the middle of China’s reform and opening-up policy , ‘What is socialism, and how should it be constructed?’ This vastly liberated people’s ideology, stabilised their belief in socialism, and empowered the reform and opening-up process. It became the second Deed of Declaration following the Third Plenary Session of the 11th Central Committee of the Chinese Communist Party, and pointed the way for the Chinese nation to follow the correct course of socialism with Chinese characteristics.

The following are excerpts from Deng Xiaoping’s southern tour:

Revolution means the emancipation of the productive forces, and so does reform. The ‘Three Kinds of Foreign-funded Enterprises’ will replenish our socialist economy, and help the cause in the long run. In short, socialism wants to win over the advantages of capitalism, and must be bold in assimilating and taking reference from human society to create an optimal civilisation. Assimilating and taking reference from various countries in the world including capitalism in developed countries can be reflected in the advanced business and management practices of modern socialised production. The reform and opening-up policy has been making strides, but after all is said and done there are many fears surrounding capitalism, and of following this road. The crux of the matter is whether the road is capitalist or socialist. Deciding on standards ought to be the principle as whether to be in favour of developing the productivity of a socialist society; in favour of increasing the overall national power of socialist countries, or in favour of improving people’s living standards.The proportion of planning to market forces is not the essential difference between socialism and capitalism. A planned economy is not equivalent to socialism, because there is planning under capitalism too; a market economy is not capitalism, because there are markets under socialism too. Planning and

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market forces are both means of controlling economic activity. The essence of socialism is liberation and development of the productive forces, elimination of exploitation and polarization, and the ultimate achievement of prosperity for all. To take the road to socialism is to realize common prosperity step by step. Our plan is as follows: where conditions permit, some areas may develop faster than others; those that develop faster can help promote the progress of those that lag behind, until all become prosperous. If the rich keep getting richer and the poor poorer, polarization will emerge. The socialist system must and can avoid polarization. One way is for the areas that become prosperous first to support the poor ones by paying more taxes or turning in more profits to the state. Of course, this should not be done too soon. At present, we don’t want to dampen the vitality of the developed areas or encourage the practice of having everyone ‘eat from the same big pot’. We should study when to raise this question and how to settle it. I can imagine that the right time might be the end of this century, when our people are living a fairly comfortable life. At present, we are being affected by both Right and ‘Left’ tendencies. But it is the ‘Left’ tendencies that have the deepest roots. Some theorists and politicians try to intimidate people by pinning political labels on them. That is not a Right tactic but a ‘Left’ one. ‘Left’ tendencies have a revolutionary connotation, giving the impression that the more ‘Left’ one is, the more revolutionary one is. In the history of the Party, those tendencies have led to dire consequences. Some fine things were destroyed overnight. Right tendencies can destroy socialism, but so can ‘Left’ ones. China should maintain vigilance against the Right but primarily against the ‘Left’. The Right still exists, as can be seen from disturbances. But the ‘Left’ is there too. Regarding reform and the open policy as means of introducing capitalism, and seeing the danger of peaceful evolution towards capitalism as coming chiefly from the economic sphere are ‘Left’ tendencies. If we keep clear heads, we shall not commit gross errors, and when problems emerge, they can be easily put right. The reform and opening-up policy has introduced the development of capitalism, and is considered to be a the primary hazard to the peaceful evolution of the economy, these are ‘left’.If we are to seize opportunities to promote China’s all-round development, it is crucial to expand the economy. The economies of some of our neighbouring countries and regions are growing faster than ours. If our economy stagnates or develops only slowly, the people will make comparisons and ask why. Therefore, those areas that are in a position to develop should not be obstructed. Where local conditions permit, development should proceed as fast as possible. There is nothing to worry about so long as we stress efficiency and quality and develop an export-oriented economy. Slow growth equals stagnation and even retrogression. It seems to me that, as a rule, at certain stages we should seize the opportunity to accelerate development for a few years, deal with problems as soon as they are recognized, and then move on.

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There are two tasks we have to keep working at: on the one hand, the reform and opening process, and on the other, the crackdown on crime. We must be steadfast with regard to both. In combating crime and eliminating social evils, we must not be soft. Guangdong is trying to catch up with Asia’s ‘four little dragons’ in 20 years, not only in terms of economic growth, but also in terms of improved public order and general social conduct – that is, we should surpass them in both material and ethical progress. Only that can be considered building socialism with Chinese characteristics. Thanks to a strict administration, Singapore has good public order. We should learn from its experience and surpass it in this respect.At the Sixth Plenary Session of the Twelfth Central Committee I said that the struggle against bourgeois liberalization must be conducted for twenty years. Now it seems it will take longer. The rampant spread of bourgeois liberalization may have grave consequences. It has taken the special economic zones more than ten years to reach the present stage. They can collapse overnight. Collapse is easy, but construction is difficult. If we don’t nip bourgeois liberalization in the bud, we may find ourselves in trouble.The imperialists are pushing for peaceful evolution towards capitalism in China, placing their hopes on the generations that will come after us. Comrade Jiang Zemin and his peers can be regarded as the third generation, and there will be a fourth and a fifth. Hostile forces realize that so long as we of the older generation are still alive and carry weight, no change is possible. But after we are dead and gone, who will ensure that there is no peaceful evolution? So we must educate the army, persons working in the organs of dictatorship, the Communist Party members and the people, including the youth. If any problem arises in China, it will arise from inside the Communist Party. We must keep clear heads. We must pay attention to training people, selecting and promoting to positions of leadership persons who have both ability and political integrity, in accordance with the principle that they should be revolutionary, young, well-educated and professionally competent. This is of vital importance to ensure that the Party’s basic line is followed for a hundred years and to maintain long-term peace and stability. It is crucial for the future of China.

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Appendix 3: ‘China’s Road to Peaceful Development’

White Paper

On 22nd December 2005, The State Council’s Information Office published, ‘China’s Road to Peaceful Development’ White Paper, which thoroughly explained the historical necessity and global significance of China’s adherence to a road of peaceful development, and promote the international society’s understanding and awareness of China’s future development trend.

China’s Road to Peaceful Development

I. Peaceful Development Is the Inevitable Way for China’s ModernizationTo achieve peaceful development is a sincere hope and unremitting pursuit of the

Chinese people. Since the policies of reform and opening-up were introduced at the end of the 1970s, China has successfully embarked on a road of peaceful development compatible with its national conditions and characteristics of the times. Along this road, the Chinese people are working hard to build China into a prosperous, powerful, democratic, civilized and harmonious modern country, and continually making new contributions to human progress with China’s own development.

Looking back upon history, basing itself on the present reality and looking forward to the future, China will unswervingly follow the road of peaceful development, making great efforts to achieve a peaceful, open, cooperative and harmonious development.

– Striving for a peaceful international environment to develop itself, and promoting world peace through its own development;

– Achieving development by relying on itself, together with reform and innovation, while persisting in the policy of opening-up;

– Conforming to the trend of economic globalization, and striving to achieve mutually beneficial common development with other countries;


– Sticking to peace, development and cooperation, and, together with all other countries, devoting itself to building a harmonious world marked by sustained peace and common prosperity.

Peace, opening-up, cooperation, harmony and win-win are our policy, our idea, our principle and our pursuit. To take the road of peaceful development is to unify domestic development with opening to the outside world, linking the development of China with that of the rest of the world, and combining the fundamental interests of the Chinese people with the common interests of all peoples throughout the world. China persists in its pursuit of harmony and development internally while pursuing peace and development externally; the two aspects, closely linked and organically united, are an integrated whole, and will help to build a harmonious world of sustained peace and common prosperity.

China’s road of peaceful development is a brand-new one for humankind in pursuit of civilization and progress, the inevitable way for China to achieve modernization, and a serious choice and solemn promise made by the Chinese government and the Chinese people.

– It is an inevitable choice based on its national conditions that China persists unswervingly in taking the road of peaceful development. During the 100-odd years following the Opium War in 1840, China suffered humiliation and insult from big powers. And thus, ever since the advent of modern times, it has become the assiduously sought goal of the Chinese people to eliminate war, maintain peace, and build a country of independence and prosperity, and a comfortable and happy life for the people. Although it has made enormous achievements in development, China, with a large population, a weak economic foundation and unbalanced development, is still the largest developing country in the world. It is the central task of China to promote economic and social development while continuously improving its people’s life. To stick to the road of peaceful development is the inevitable way for China to attain national prosperity and strength, and its people’s happiness. What the Chinese people need and cherish most is a peaceful international environment. They are willing to do their best to make energetic contributions for the common development of all countries.

– It is an inevitable choice based on China’s historical and cultural tradition that China persists unswervingly in taking the road of peaceful development. The Chinese nation has always been a peace-loving one. Chinese culture is a pacific culture. The spirit of the Chinese people has always featured their longing for peace and pursuit of harmony. Six hundred years ago, Zheng He (1371–1435), the famous navigator of the Ming Dynasty, led the then largest fleet in the world and made seven voyages to the ‘Western Seas,’ reaching more than 30 countries and regions in Asia and Africa. What he took to the places he visited were tea, chinaware, silk and technology, but did not occupy an inch of any other’s land. What he brought to the outside world was peace and civilization, which fully reflects the good faith of the ancient Chinese people in strengthening exchanges with relevant countries and their peoples. Based on the present reality, China’s development has not only benefited the 1.3 billion Chinese people, but also brought large markets and

development opportunities for countries throughout the world. China’s development also helps to enhance the force for peace in the world.

– It is an inevitable choice based on the present world development trend that China persists unswervingly in taking the road of peaceful development. It is the common wish of the people throughout the world and an irresistible historical trend to pursue peace, promote development and seek cooperation. In particular, further development of multi-polarization and economic globalization has brought new opportunities for world peace and development, and thus it is possible to strive for a long-term peaceful international environment. Meanwhile, China is clearly aware that the world is still troubled by many factors of instability and uncertainty, and humankind still faces many severe challenges. However, there are more opportunities than challenges, and as long as all countries work together we can gradually attain the goal of building a harmonious world of sustained peace and common prosperity. For many years, China has consistently followed an independent foreign policy of peace, the purpose of which is to safeguard world peace and promote common development. As early as in 1974, when China resumed its membership in the United Nations, Deng Xiaoping proclaimed to the world that China would never seek hegemony. Since the policies of reform and opening-up were introduced, China, keeping in view the changes in the international situation, has upheld the important strategic judgment that peace and development are the theme of the present times, and declared on many occasions that China did not seek hegemony in the past, nor does it now, and will not do so in the future when it becomes stronger. China’s development will never pose a threat to anyone; instead, it can bring more development opportunities and bigger markets for the rest of the world. Facts prove that China’s economic development is becoming an important impetus for economic growth in the Asia-Pacific region and even the world as a whole. It has become the national determination of China to safeguard world peace and promote common development.

At present, the Chinese people are working hard to build a moderately well-off society in an all-round way. Not long ago, the Fifth Plenary Session of the 16th Central Committee of the Communist Party of China set the main targets for China’s economic and social development from 2006 to 2010, of which the principal economic target was to double the 2000 per-capita GDP by 2010 on the basis of optimizing its structures, increasing economic returns and reducing consumption; and enhance substantially the resource utilization ratio, and by 2010 reduce the 2005 per-unit GDP resource consumption by around 20 percent. To attain this target, China, guided by the scientific concept of development with people first, overall coordination and sustainable development at the core, will promote the overall development of its economy, politics, culture and society. While seeking development by relying primarily on its own strength, China sticks to the policy of opening-up, engages in extensive international economic and technological cooperation, and shares with all other countries the fruits of mankind’s civilization; respects and gives consideration to others’ interests, works with other countries to solve the disputes and problems cropping up in cooperation, and strives to achieve

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mutual benefit and common development; abides by its international obligations and commitments, actively participates in international systems and world affairs, and endeavors to play a constructive and locomotive role; and gets along with all other countries equally and develops friendly relations with them on the basis of the Five Principles of Peaceful Coexistence.

II. Promoting World Peace and Development with China’s Own GrowthPeace is the foundation for development while development is fundamental for

peace. For years, the Chinese government and people have made unremitting efforts to create a peaceful international environment. They cherish dearly the peaceful international environment jointly created by the peace-loving and progress-seeking countries and peoples, concentrate on their own construction and whole-heartedly seek development, and strive constantly to make positive contributions to world peace and development with their own growth, and promote human civilization and progress.

China’s development needs a peaceful international environment. Since 1978, when the policies of reform and opening-up were adopted, China has endeavored to develop itself within a peaceful international environment. Its GDP has increased from 362.4 billion yuan (about US$215.3 billion if converted directly from Renminbi into US dollar at the average exchange rate of that year) to 15,987.8 billion yuan (about US$1931.7 billion if converted directly from Renminbi into US dollar at the average exchange rate of that year) in 2004, an average growth rate of over 9% per annum, calculated according to constant price. Its per-capita GDP has risen from less than US$300 to more than US$1,400. China has also made new progress in its building of political civilization, with its democratic system being improved continuously, the freedom and rights of citizens being protected and guaranteed by law, and its people exercising their rights of democratic election, decision-making, administration and supervision in accordance with the law. A legal system centred on the Constitution has taken initial shape, and the basic strategy of ruling the country by law has been implemented. Rapid progress has been scored in its education, science and technology, culture, health, sports and other undertakings, and the increasing spiritual and cultural needs of the people have been constantly satisfied. The construction of a harmonious society has been reinforced, and the state is working hard to realize and safeguard social fairness and justice, increase creativity of the whole society, beef up social construction and administration, and maintain social stability and harmonious relations between human beings and Nature.

China’s development is an important component of global development. China has promoted world peace with its own development and made contributions to the progress of mankind.

China has made contributions to the sustained development of human society. Based on previous experience and the fruits of modern civilization, it has adopted the scientific outlook on development to transform its concepts, create new modes for growth and enhance the quality of development. Over the years, China has

persisted in exploring a new road to industrialization, featuring high scientific and technological content, good economic returns, low resources consumption, little environmental pollution and a full display of advantages in human resources, and striven to steer the entire society along a road of sustained development of civilization, with advanced production, affluent life and favourable ecological conditions. China’s success in population control has retarded the expansion of the population of the world as a whole. China emphasizes energy saving, and has adopted various measures in this regard. During the period 1980–2000, its GDP quadrupled, but the annual consumption of energy only doubled. Due to China’s intensified efforts at environmental protection, its dust discharge has remained the same as in 1980 despite a big increase in installed thermal-power capacity. Its energy consumption of per 10,000-yuan GDP in 2004 dropped by 45 % compared to 1990. China has made medium- and long-term plans for energy conservation, aiming to keep an annual energy-saving rate of 3 % by 2020, to save 1.4 billion tons of standard coal.

China has made contributions to reducing human poverty and improving the quality of life. It has created a miracle by feeding nearly 22 % of the world’s population on less than 10 % of the world’s arable land. The living standards of its 1.3 billion people are constantly improving. The Chinese government has lifted 220 million people out of poverty, and provided minimum living allowances to 22.05 million urban residents and aid to 60 million disabled people. The life expectancy of the Chinese has been extended from 35 years before New China was founded in 1949 to 71.95 years today, close to that of moderately developed countries.

China has made contributions to safeguarding world peace and promoting international cooperation. On the basis of the Five Principles of Peaceful Coexistence, China has developed friendly, cooperative relations with other countries and promoted peaceful coexistence and equal treatment among countries. China has always adhered to the principle of being a friendly neighbour; and has constantly developed good and cooperative relationships with surrounding countries and other Asian countries and expanded common interests with them. China has established various cooperative relationships with major powers, and unremittingly augmented mutual dialogues, exchanges and cooperation. China has also expedited cooperation with a vast number of developing countries, to seek common development by drawing on one another’s advantages within the South-South cooperation framework. Active in the settlement of serious international and regional problems, China shoulders broad international obligations, and plays a responsible and constructive role.

China has made contributions to world economic development. In recent years, despite increasingly severe global economic fluctuations, China’s economy has maintained stable and relatively fast growth, bringing hope and a new driving force to world economic development. Statistics released by the World Bank show that China’s economic growth contributed on average 13 % to world economic growth from 2000 to 2004. In 2004, the world economy reported the swiftest growth in 30 years, while China’s economy grew by 9.5 % and became a key driving force for

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the former. Also in 2004, China’s import and export figure doubled that of three years previously, reaching US$1,154.8 billion, and its import figure nearly doubled that of three years previously, reaching US$561.4 billion. By the end of 2004, China had made use of US$745.3 billion paid-in foreign capital, and approved more than 500,000 foreign-funded enterprises.

China has made contributions to the stable development of surrounding areas. China has more than 20 neighbours that either border on its territory or lie across the nearby seas. China’s sustained economic growth, social stability and its people’s peaceful life also benefit its neighbouring countries. The Asia-Pacific economy maintained 6-% growth between 1999 and 2004. To ensure a stable environment for the continuous development of its surrounding areas, China overcame arduous difficulties at the time of the 1997 Asian financial crisis, and stuck to the principle of keeping the value of the Renminbi stable while expanding domestic demand, and helped to the best of its ability suffering countries in order to weather the crisis. China played its role in overcoming the crisis from a financial standpoint. In the case of the 2003 sudden outbreak of SARS, the Chinese government took decisive steps, and cooperated with its neighbours in effectively curbing it. Upon the occurrence of the Indian Ocean tsunami in late 2004, the Chinese government and its people offered timely and sincere aid – the largest external aid in the history of New China – to the suffering countries in their rescue and re-construction effort. The Chinese also expressed great sympathy and extended assistance when South Asia was struck by massive earthquakes in October 2005.

Despite gigantic achievements, China still remains the largest developing country in the world, with a formidable task of development lying ahead. According to the latest statistics released by the World Bank and statistics recently released by China, in 2004, China’s aggregate economic volume accounted only for 16.6% of that of the US, and its per-capita GDP was merely 3.6% that of the US and 4.0% of Japan, ranking 129th among 208 countries and regions around the world. By the end of 2004, 26.1 million rural Chinese still lived under the poverty line, more than 100 million farmers have to be provided with jobs elsewhere, and the government is obliged to create jobs for nearly 24 million urban and rural residents every year. There is still a long way to go for China to reach the level of the moderately developed countries and achieve common prosperity for the whole country. China still needs to make persistent efforts to strive for a peaceful international environment for its own development, and promote world peace and development with its own growth. This is particularly significant for both China and the world as a whole.

III. Developing by Relying on Its Own Strength, Reform and InnovationChina will adhere to the scientific approach for development and have an overall

plan for domestic development and opening to the outside world, and base its development on its own realities. At the same time, China will maintain the approach of all-round, wide-area, multi-level openness to the outside world, striving to attain a more balanced development.

The main problem facing China in its development is the contradiction between its underdeveloped economy and its people’s ever-increasing material and cultural demands, and the contradiction between economic and social development and the relatively strong pressure of the population, natural resources and the environment. Past experience indicates that fundamentally China must rely on itself to solve the problems in its development. By doing so, the country will be responsible to the Chinese people as well as to the people of the rest of the world. It is an important principle that guarantees that China will follow the road of peaceful development. China will not shift its own problems and contradictions onto other countries, much less will it plunder other countries to further its own development.

To achieve development, China will mainly rely on its own strength, reform and innovation. It has many advantages and favourable conditions: It has the material and technological foundation supporting further economic development; it has a huge and ever-growing market and a high rate of private savings deposits; it has a large labour force whose quality, as a whole, is improving all the time; it has an ever-improving socialist economic market system and related policy guarantee; and it has a stable social and political environment.

China intends to do the following work well in order to achieve development by mainly relying on its own strength, and through reform and innovation:

– Adhering to innovation in ideas and systems. Practice over the two decades or so since China introduced the reform and opening-up policies has proved that, by emancipating the mind, seeking truth from facts and striving for progress, China is able to bring into full play the enthusiasm, initiative and creativity of its hundreds of millions of people and open up new prospects for its modernization drive. China will unswervingly push forward reform in all aspects, remain steadfast in the direction of socialist market economy in its reform, intensify reform with an emphasis on institutional innovation, and strive to make breakthroughs in some key areas and important links. Through reform, China will enhance marketization of its national economy, improve the state’s macroeconomic regulatory system, and constantly establish institutions and mechanisms conducive to an overall, coordinated and sustainable economic and social development.

– Opening up the domestic market and increasing domestic demand. It is China’s fundamental stand and long-term strategic guiding principle to expand domestic demand in its economic and social development. China has entered a period when the pace of industrialization and urbanization is being quickened, the people’s income level is increasing and their consumption structure is being upgraded. While changing its mode of foreign trade growth, increasing imports and strengthening intellectual property protection, and continuing to make contributions to global trade and the world economy, China keeps up its driving force to maintain sustained economic development through its huge domestic demand and domestic market. This has determined that China should and most likely will mainly rely on domestic demand for its development. China will ensure that investment in fixed assets will increase at a reasonable scale and pace so as to bring into better play the role of investment in economic growth. By implementing correct income distribution and

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consumption policies, China is relying more on domestic demand and consumption to promote its economic development. In recent years, domestic investment and consumption needs are increasing at a rather rapid rate.

– Promoting the strategic adjustment of the economic structure and the change of growth mode. China considers changing the growth mode a strategic focal point, strives to base economic growth on the enhancement of the quality of its human resources, efficient use of natural resources, reduction of environmental pollution, and emphasis on the quality and efficiency of its economy. China will take a new road of industrialization – using the IT industry to promote industrialization and letting industrialization support the development of the IT industry. It will quicken the pace of optimizing and upgrading its industrial structure, develop advanced manufacturing industry, high- and new-tech industry, especially the IT and biological industries, increase the proportion of the service sector and improve the level of services, strengthen the construction of infrastructure facilities of basic industries, and bring into full play the function of structural readjustment in the change of the growth mode. China will work hard to develop a cost-saving, recycling and environment-friendly economy, establishing a national economic system characterized by intensification and cleanness.

– Promoting scientific and technological progress and strengthening the ability of independent innovation. China is striving to become a country of innovation, and it is a state strategy to strengthen the ability of independent innovation. It has made medium- and long-term scientific and technological development plans, setting forth the objectives and tasks for scientific and technological development for the next 15 years. China is making every effort to enhance its ability of original innovation, integrated innovation and re-innovation after absorbing advanced technology from abroad. By reforming the scientific and technological system and increasing financial input through various channels, China will promote the construction of its national innovation system and speed up the pace of commercialization of research findings. China hopes to increase the proportion of funds for scientific and technological research and development from 1.44% of the GDP in 2004 to 2.5% in 2020.

– Making every effort to exploit human resources. China will make effort in implementing the strategy of relying on talented people to make the country powerful. It will quicken the readjustment of the educational structure and institute education aimed at all-round development of students, with emphasis being put on compulsory education, especially compulsory education in the countryside. It will make greater efforts to develop vocational education and raise the quality of its higher education, so as to greatly promote the development of education and foster qualified workers and specialized personnel in all fields. It is expected that from 2006 to 2010 the secondary vocational schools will train 25 million graduates, and the higher vocational schools 11 million graduates for the society. The enrolment rate of China’s institutions of higher learning will reach 40% by 2020. Meanwhile, China will bring in talented personnel, especially high-level personnel, from abroad, forming a favourable mechanism and social atmosphere in which talented people

keep emerging in large numbers and every individual gives full play to his or her talents, thus providing abundant human resources and intellectual support for the country’s modernization program.

– Working hard to build a resource-saving and environment-friendly society. Historical experiences show that to have a balanced and orderly development of the world economy, the international community must handle the energy problem properly. Through dialogues and cooperation regarding energy, China is working with other countries to safeguard energy safety and stability. China considers energy saving one of its basic state policies. Centring on conservation of energy resources and raising the efficiency of energy consumption, China is working hard to develop a recycling economy so that it will garner the highest possible economic and social benefits with the lowest possible energy consumption. China has persisted in relying on its domestic resources and constantly increasing the supply of domestic energy. China is not only a big energy consuming country, but also a big energy producing one. Since the 1990s, China has obtained 90% or more of its energy from domestic sources. The potential of its domestic energy supply is still great. Verified coal reserves account for only a small proportion of the potential reserves. Moreover, it is likely that new oilfields and natural gas fields will be discovered, and the future of new types of energy and renewable energy is promising. Meanwhile, China upholds the basic state policy of environmental protection, and is making more and more efforts to protect and improve its ecological environment, so as to create conditions for sustainable economic and social development. In its environmental protection efforts, China persists in putting precautionary measures first, treating environmental pollution comprehensively and preventing pollution at the source. China gives priority to environmental protection, makes sure that the exploitation of natural resources is in good order, emphasizes prevention of excessive exploitation of natural resources, and intensifies protection of natural resources and ecology.

China will unswervingly carry out the basic state policy of opening up to the outside world, and actively engage in economic and technological exchanges and cooperation with other countries to raise the overall level of openness. China has earnestly fulfilled the promises it made when admitted into the World Trade Organization (WTO) by constantly improving the management system and policies concerning foreign businesses in China and creating a fair and predictable legal environment; opening the market further and improving the environment for investment and trade; improving the trade structure, enhancing the degree of freedom and convenience for trade and investment, and creating a better environment for investment; and, in addition, encouraging its own enterprises to invest overseas and developing alongside foreign businesses. Opening up to the outside world has played a very important role in promoting China’s economic and social development. The foreign capital China brings in makes up for the inadequacy of capital for development. Domestic industries have been growing rapidly thanks to the full utilization of overseas markets. The introduction of advanced technology, equipment and management expertise has improved the production technology and management level of Chinese enterprises. Frequent exchanges with other countries

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make it possible for China to share the fruits of mankind’s civilization and improve the quality of its own human resources.

IV. Seeking Mutual Benefit and Common Development with Other CountriesChina cannot develop independently without the rest of the world. Likewise, the

world needs China if it is to attain prosperity. Following the trend of economic globalization, China is participating in international economic and technological cooperation on an ever larger scale, in wider areas and at higher levels in an effort to push economic globalization towards the direction of common prosperity for all countries. Today, the mainstream of international trade is to share successes, with all as winners. China adheres to its opening-up strategy for mutual benefit. For this, it has made conforming to China’s own interests while promoting common development a basic principle guiding its foreign economic and trade work, develops its economic and trade relations with other countries on the basis of equality, mutual benefit and reciprocity, and makes constant contributions to the sustained growth of global trade.

China has exerted itself to push forward multilateral economic and trade relations and regional economic cooperation, actively participated in the formulation and execution of international economic and trade rules, and joined various other countries in settling disputes and problems emerging in their cooperation, so as to promote the balanced and orderly development of the world economy.

China has been an active supporter of and participant in multilateral trade system. Since its accession to the WTO in December 2001, China has strictly kept its commitments to create more favourable conditions for international economic and technological cooperation. China has sorted out and revised some 3,000 laws, regulations and department rules, continually improved its foreign-related economic legal system, and enhanced the transparency of its trade policies. China has cut its customs tariffs step by step, as promised, and by 2005 its average tariffs had been reduced to 9.9 percent, and most non-tariff measures had been cancelled. Banking, insurance, securities, distribution and other service trade sectors have opened wider to the outside world. Of the 160-odd service trade sectors listed by the WTO, China has opened more than 100, or 62.5 percent, a level close to that of the developed countries. China has actively pushed ahead with a new round of multilateral trade negotiations, participated in talks on various topics, especially on agriculture, market access of non-farm products and the service trades, and played a constructive role in helping developing and developed members reduce disputes through talks. China, together with other WTO members, has done a lot of work to spur substantial progress to reach early agreement among the negotiators.

China has continuously stepped up participation in regional economic cooperation. The building of the China-ASEAN Free Trade Area is going full steam ahead. Following the practice of zero tariffs on farm products under the ‘Early Harvest Program,’ the Agreements on Trade in Goods and the Dispute Settlement Mechanism Agreement were formally signed in November 2004, and in July 2005 the free trade area launched its tariff concession program, clearing the way for

realizing its goals. At present, the building of the Shanghai Cooperation Organization is proceeding with comprehensive and pragmatic cooperation, and its process to facilitate trade investment has been launched in an all-round way. China has also initiated negotiations on such free trade areas as the China-Southern African Development Community, China-Gulf Cooperation Council, and China-New Zealand, China-Chile, China-Australia and China-Pakistan, and signed relevant agreements with its partners. China is also an active and pragmatic participant in the activities of the Asia-Pacific Economic Cooperation, Forum on China-Africa Cooperation, Sino-Arab Cooperation Forum, Asia-Europe Meeting and Greater Mekong Subregion Economic Cooperation Program. China advocates the liberalization and facilitation of investment in bilateral trade, and has signed bilateral trade agreements or protocols with more than 150 countries and regions, bilateral investment protection agreements with more than 110 countries, and agreements with over 80 countries on the avoidance of double tariffs.

China sticks to the principle of mutual benefit and win-win cooperation, tries to find proper settlement of trade conflicts and promotes common development with other countries. Trade conflicts are quite natural in international economic exchanges. Following international practice and WTO rules, China has tried to resolve such conflicts through dialogue on an equal footing and through the WTO dispute settlement mechanism. When promulgating and implementing domestic economic policies, it tries to take international factors and influences into account as well as the impacts its own economic growth impose on the outside world. Based on its reform and development, China is serious in judging the effects its exchange rate reform may bring to surrounding countries and regions, and the global economy and finance. It has thus advanced the reform in a steady way, adopted a managed floating exchange rate regime based on market supply and demand, and linked and adjusted it according to a basket of currencies, so that the Renminbi exchange rate will remain stable at a reasonable and balanced level. China has intensified its protection of intellectual property rights, improved the relevant legal system, and tightened up law enforcement to crack down on all kinds of violations.

Growing China is active in international economic and technological cooperation, and provides good opportunities and a huge market for the rest of the world. All countries, the developed countries in particular, have reaped lucrative benefits from investment in and service trade with China.

China’s active involvement in the international division of labour and cooperation is conducive to the reasonable and effective distribution of global resources. As the largest developing country in the world, China boasts an abundant labour force, the quality of which has been constantly improving. It is a natural advantage of China in developing labour-intensive industries and some technology-intensive ones. Along with economic and social progress, as well as the improvement of the living standards of its people, China’s demand for capital-, technology- and knowledge-intensive products keeps increasing, offering great opportunities for foreign products, technologies and services, as the country has now evolved into an

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internationally acknowledged big market. China’s foreign trade is mutually supplementary with many countries. About 70% of China’s exports to the US, Japan and the Europe Union (EU) are labour-intensive, while 80% of its imports from the three are capital-, technology- and knowledge-intensive. In the new structure of international labour division, the country has become a key link in the global industrial chain.

By importing cheap but good-quality products made in China, the importing countries can reduce their expenditure and pressure caused by inflation while satisfying the demands and enhancing the welfare of their consumers. China’s labour-intensive products enjoy unique comparative advantages in the global market. Since 1997, US consumers have saved billions of dollars every year by buying Chinese commodities – US$600 billion in the past decade and nearly US$100 billion in 2004 alone.

The expansion of China’s reciprocal economic and trade relations with other countries has benefited both in a tremendous way. China’s imports have kept growing by a yearly 16% since 1978, and the country imported commodities worth US$1,270 billion in the three transitional years following its WTO accession. In 2004, China became the world’s third largest importer, next only to the US and Germany, with US$148.47 billion of increased imports or 9% of the world’s total growth of imports. Also in 2004, China’s trade volume with the EU, the US and Japan totalled US$177.3 billion, US$169.6 billion and US$167.8 billion, respectively, making them China’s top three trade partners and main sources of foreign investment. In the same year, China’s trade volume with Asian countries and regions amounted to US$664.9 billion, 34.2% up over that of the previous year. This figure accounted for 57.6% of China’s total foreign trade value. In addition, China has become the fourth largest trading partner with and a fast-growing market for ASEAN.

The huge market China offers is of such great opportunities for international capital that investors around the world have benefited from China’s rapid economic growth. From 1990 to 2004, foreign investors repatriated US$250.6 billion in profits from China. In 2004, US-funded enterprises in China generated US$75 billion in sales revenue in China, and their products earned another US$75 billion elsewhere. A 2005 survey by the American Chamber of Commerce-People’s Republic of China shows that 70% of American firms are making profits in China, and about 42% report a higher profit rate than their global average.

China’s growing investment abroad has also fuelled the economies of the destination countries. At the end of 2004, China’s net non-banking direct investment abroad amounted to US$44.8 billion, spreading to 149 countries and regions. Among which, US$33.4 billion, or 75 percent, went to Asia.

China’s foreign economic and trade cooperation has tremendous potential and boosts bright prospects. In the post-WTO era, China imported US$500 billion worth of commodities annually during the period from December 2001 to September 2005, which meant 10 million jobs for the countries and regions concerned. In the next few years, it will import US$600 billion worth of goods

annually, and the amount will exceed US$1,000 billion by 2010. By 2020, the scale and total demand of the Chinese market will quadruple that in 2000. During the process, the rest of the world will find development and business opportunities in their reciprocal cooperation with China, which will greatly accelerate the growth of the global economy.

V. Building a Harmonious World of Sustained Peace and Common ProsperityMankind has only one home – the Earth. Building a harmonious world of

sustained peace and common prosperity is a common wish of people throughout the world as well as the lofty goal of China in taking the road of peaceful development.

China holds that the harmonious world should be democratic, harmonious, just, and tolerant.

– Upholding democracy and equality to achieve coordination and cooperation. All countries should, on the basis of the UN Charter and the Five Principles of Peaceful Coexistence, promote democracy in international relations through dialogue, communication and cooperation. The internal affairs of a country should be decided by its people, international affairs should be discussed and solved by all countries on an equal footing, and developing countries ought to enjoy the equal right to participate in and make decisions on international affairs. All countries should respect each other and treat each other equally. No country is entitled to impose its own will upon others, or maintain its security and development at the price of the interests of others. The international community should oppose unilateralism, advocate and promote multilateralism, and make the UN and its Security Council play a more active role in international affairs. When dealing with international relations, it is necessary to persist in proceeding from the common interests of all the people throughout the world, make efforts to expand common interests, enhance understanding through communication, strengthen cooperation through understanding and create a win-win situation through cooperation.

– Upholding harmony and mutual trust to realize common security. All countries should join hands to respond to threats against world security. We should abandon the Cold War mentality, cultivate a new security concept featuring mutual trust, mutual benefit, equality and coordination, build a fair and effective collective security mechanism aimed at jointly preventing conflict and war, and cooperate to eliminate or reduce as much as possible threats from such non-traditional security problems as terrorist activities, financial crises and natural disasters, so as to safeguard world peace, security and stability. We should persist in settling international disputes and conflicts peacefully through consultations and negotiations on the basis of equality, work together to oppose acts of encroachment on the sovereignty of other countries, interference in the internal affairs of other countries, and willful use or threat of use of military force. We should step up cooperation in a resolute fight against terrorism, stamp out both the symptoms and root causes of the problem of terrorism, with special emphasis on eliminating the root cause of the menace. We should achieve effective disarmament and arms control in a fair,

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rational, comprehensive and balanced fashion, prevent the proliferation of weapons of mass destruction, vigorously promote the international nuclear disarmament process, and maintain global strategic stability.

– Upholding fairness and mutual benefit to achieve common development. In the process of economic globalization, we should stick to the principle of fairness, achieve balanced and orderly development, and benefit all countries, developing countries in particular, instead of further widening of the gap between South and North. We should propel economic globalization towards the direction of common prosperity. The developed countries should shoulder greater responsibility for a universal, coordinated and balanced development of the world, while the developing countries should make full use of their own advantages to achieve development. We should actively further trade and investment liberalization and facilitation, remove all kinds of trade barriers, increase market access, ease restrictions on technology export, so as to establish an international multilateral trading system that is public, fair, rational, transparent, open and non-discriminatory, and construct a good trading environment conducive to orderly global economic development. We should further improve the international financial system to create a stable and highly efficient financial environment conducive to global economic growth. We should step up worldwide dialogue and cooperation on energy, and jointly maintain energy security and energy market stability. We should actively promote and guarantee human rights to ensure that everyone enjoys equal opportunities and right to pursue overall development. We should make innovations in the mode of development, promote the harmonious development of human beings and Nature, and take the road of sustainable development.

– Upholding tolerance and opening to achieve dialogue among civilizations. Diversity of civilizations is a basic feature of human society, and an important driving force for the progress of mankind. All countries should respect other country’s right to independently choose their own social systems and paths of development, learn from one another and draw on the strong points of others to make up for their own weak points, thus achieving rejuvenation and development in line with their own national conditions. Dialogues and exchanges among civilizations should be encouraged with the aim of doing away with misgivings and estrangement existing between civilizations, and develop together by seeking common ground while putting aside differences, so as to make humankind more harmonious and the world more colourful. We should endeavour to preserve the diversity of civilizations and development patterns, and jointly build a harmonious world where all civilizations coexist and accommodate one another.

Over the years, China has persisted in the policies of peace, development and cooperation, and pursued an independent foreign policy of peace. In the spirit of democracy, harmony, justice and tolerance, China has been playing a constructive role, and making efforts to attain the lofty goal of building a harmonious world together with all other countries.

China is working hard to bring about a just and rational new international political and economic order, and stands for greater democracy in international

relations. China adheres to the purpose and principles of the UN Charter, attaches great importance to the UN’s role in international affairs as the core of the international multilateral mechanism, vigorously promotes multilateral cooperation to settle regional conflicts and development problems, and actively supports the UN to play a greater role in international affairs. China backs up UN reform, and firmly helps safeguard its long-term interests and the common interests of its members. China has joined more than 130 inter-governmental international organizations, including the International Atomic Energy Agency (IAEA), is committed to 267 international multilateral treaties such as the Treaty on the Non-Proliferation of Nuclear Weapons, and actively participates in international cooperation in such fields as anti-terrorism, arms control, non-proliferation, peacekeeping, economy and trade, development, human rights, law-enforcement, and the environment.

China takes practical steps to establish fraternal relations with surrounding regions and promote cooperation in maintaining regional security. In line with the generally acknowledged principles of international law and in the spirit of consultation on the basis of equality, mutual understanding and mutual accommodation, China has made efforts to properly resolve boundary issues with neighbouring countries, settle disputes and promote stability. So far, thanks to joint efforts with various countries, China has signed boundary treaties with 12 continental neighbours, settling boundary issues left over from history. The boundary issues with India and Bhutan are in the process of being settled. China actively promotes dialogue and cooperation on regional security, and plays a positive and constructive role in such regional mechanisms as ASEAN + China, ASEAN + China, Japan and the ROK, Shanghai Cooperation Organization, Asia Pacific Economic Cooperation, ASEAN Regional Forum, and Asian Cooperation Dialogue. China has joined the Treaty of Amity and Cooperation in Southeast Asia, lending new vitality to the peaceful and friendly relationship between China and ASEAN members.

China plays a constructive role in resolving weighty international and regional issues for common security. With respect to the nuclear issue on the Korean Peninsula, China has worked tirelessly with the other relevant parties, and succeeded in convening and hosting first the Three-Party Talks (China, North Korea and the United States) and then the Six-Party Talks (China, North Korea, the United States, the Republic of Korea, Russia and Japan). China was instrumental in getting the participants to issue a joint statement, thus mitigating tension on the peninsula, and contributing constructively to peace and stability in Northeast Asia. Regarding the Middle East issue, China encourages the parties involved to resume talks and start a new peace process based on relevant UN resolutions and the principle of ‘Land for Peace.’ As for the Iraq issue, China advocates seeking a political solution within the UN framework, and is making great efforts in this regard. On the Iran nuclear issue, China has tried several approaches to persuade the parties involved to engage in dialogue and find a proper and peaceful settlement within the IAEA framework. Moreover, China is expanding its participation in UN peacekeeping efforts, having sent military personnel, police and civil officers on 14 UN peacekeeping missions, to the number of 3,000.

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For many years, China has provided assistance within its capacity to other developing countries to help them build the capacity for self-development as well as engage in common development. So far, China has provided assistance to more than 110 countries and regional organizations for over 2,000 projects. China has reduced or cancelled 198 debts totaling 16.6 billion yuan owed to it by 44 developing countries. In May 2005, the International Poverty-Reduction Centre in China was formally set up in Beijing. In September 2005, at the High-Level Meeting on Financing for Development, on the occasion of the 60th Anniversary of the United Nations, President Hu Jintao announced the new measures China would adopt to increase assistance to other developing countries: China will give zero tariff treatment for certain products to all the 39 Least-Developed Countries (LDCs) having diplomatic relations with China, covering most commodities exported by these countries to China; further expand aid to Heavily Indebted Poor Countries (HIPCs) and LDCs; through bilateral channels, exempt or cancel in other ways within the next two years of all the outstanding interest-free and low-interest government loans due as of the end of 2004 owed by all the HIPCs having diplomatic relations with China; within the next three years, provide US$10 billion in preferential loans and preferential export buyer’s credit to developing countries to help them strengthen the construction of infrastructure, promote enterprises of both sides to carry out joint venture cooperation; within the next three years, increase aid to developing countries, particularly aid to African countries in related areas, provide to them medicines including effective drugs to prevent malaria, help them build and improve medical facilities and train medical personnel; and train 30,000 persons of various professions from the developing countries within the next three years, and help relevant countries expedite the training of talented people.

China continuously enhances exchanges and dialogues with other civilizations to promote mutual tolerance. Opening, tolerance and all-embracing are important features of Chinese civilization. As the trend of economic globalization develops in depth, China, all the more aware of the significance of exchanges and dialogues among different civilizations, is working harder to get the rest of the world to understand China, while absorbing and drawing on the useful fruits of other civilizations. In recent years, China has cooperated with numerous countries in holding Culture Weeks, Culture Tours, Culture Festivals and Culture Years, thus helping promote exchanges and understanding between the Chinese people and other peoples, and creating new forms for equal dialogue between civilizations.

Conclusion

China is the largest developing country in the world. The 1.3 billion Chinese people, taking the road of peaceful development, undoubtedly play a critical and positive role in the lofty pursuit of the peace and development of mankind.

The Chinese government and people are well aware that China is still a developing country facing a lot of difficulties and problems on its road of development, and therefore it still has a long way to go before modernization is achieved. The road of peaceful development accords with the fundamental interests of the Chinese people; it also conforms to the objective requirements of social development and human progress. China is now taking the road of peaceful development, and will continue to do so when it becomes stronger in the future. The resolve of the Chinese government and the Chinese people to stick to the road of peaceful development is unshakable.

The Chinese government and people also see clearly that peace and development, the two overriding issues facing the world, have not yet been fundamentally achieved. Local wars and conflicts arising from various causes keep erupting. Problems and conflicts in some regions remain complicated and thorny. Traditional and non-traditional factors threatening security are intertwined. The wealth gap between North and South continues to widen. People in some countries are still being denied the basic right to subsistence, and even survival. All this has made the road leading to a harmonious world characterized by sustained peace and common prosperity a bumpy and challenging one, and reaching the goal demands long and unremitting efforts by the people throughout the world.

The 21st century has opened up bright prospects, and human society is developing at an unprecedented rate. China has identified its goal for the first 20 years of this century. That is, to build a moderately well-off society in an all-round way that benefits over one billion people, further develop China’s economy, improve democracy, advance science and education, enrich culture, foster greater social harmony and upgrade the quality of life of the Chinese people. China is certain to make more contributions to the lofty cause of peace and development of humankind.

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Documents

Civilisational Repositioning: China’s Rise and the Future of the Arab People (written by Samer Khair Ahmad)