This episode explores China's thinly veiled projects of expanding global influence. Does Chinese control of critical infrastructure and economic supply chains threaten Europe's autonomy? And how can democracies counter the global spread of Chinese Communist Party ideology? Listen to hear about China's vulnerabilities to political protest and why many Chinese citizens consent to surveillance that controls their everyday lives.
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Glossary
Belt and Road Initiative (BRI)
(04:10 or p.1 in the transcript)
China’s Belt and Road Initiative is a strategy initiated by the People’s Republic of China that seeks to connect Asia with Africa and Europe via land and maritime networks with the aim of improving regional integration, increasing trade and stimulating economic growth. The name was coined in 2013 by China’s President Xi Jinping, who drew inspiration from the concept of the Silk Road established during the Han Dynasty 2,000 years ago – an ancient network of trade routes that connected China to the Mediterranean via Eurasia for centuries. The BRI has also been referred to in the past as 'One Belt One Road'. The BRI comprises a Silk Road Economic Belt – a trans-continental passage that links China with southeast Asia, south Asia, Central Asia, Russia and Europe by land – and a 21st century Maritime Silk Road, a sea route connecting China’s coastal regions with south east and south Asia, the South Pacific, the Middle East and Eastern Africa, all the way to Europe. The initiative defines five major priorities: policy coordination; infrastructure connectivity; unimpeded trade; financial integration; and connecting people. The BRI has been associated with a very large programme of investments in infrastructure development for ports, roads, railways and airports, as well as power plants and telecommunications networks. Since 2019, Chinese state-led BRI lending volumes have been in decline. The BRI now places increasing emphasis on “high quality investment”, including through greater use of project finance, risk mitigation tools, and green finance. The BRI is an increasingly important umbrella mechanism for China’s bilateral trade with BRI partners: as of March 2020, the number of countries that have joined the Belt and Road Initiative by signing a Memorandum of Understanding (MoU) with China is 138. source
BRICS
(04:41 or p.2 in the transcript)
"BRICS" is the acronym denoting the emerging national economies of Brazil, Russia, India, China and South Africa. The term was originally coined in 2001 as "BRIC" by the Goldman Sachs economist Jim O'Neill in his report, Building Better Global Economic BRICs (Global Economics Paper No: 66). At that time, the economies of Brazil, Russia, India and China experienced significant growth, raising concerns regarding their impact on the global economy. Foreign ministers of these countries began meeting informally in 2006, which led to more formal annual summits beginning in 2009. Generally speaking, these meetings are held to improve economic conditions within BRICS countries and give their leaders the opportunity to work in collaboration regarding these efforts. In December of 2010, South Africa joined the informal group and changed the acronym to BRICS. Together these emerging markets represent 42% of the world population and account for over 31% of the world's GDP according to the World Factbook. According to the 2023 summit chair South Africa, over 40 nations were interested in joining the economic forum for the benefits membership would provide including development finance and increase in trade and investment. At the conclusion of the summit, it was announced that Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates will become new members of BRICS starting in 2024. source
Global Gateway
(25:52 or p.7 in the transcript)
Global Gateway is a new European strategy to boost smart, clean and secure links in digital, energy and transport sectors and to strengthen health, education and research systems across the world. The European Commission and the EU High Representative launched it in 2021. Global Gateway aims to mobilise up to €300 billion in investments through a Team Europe approach, bringing together the EU, its Member States and their financial and development institutions. It seeks a transformational impact in the digital, climate and energy, transport, health, and education and research sectors. The focus is on smart investments in quality infrastructure, respecting the highest social and environmental standards, in line with the EU’s interests and values: rule of law, human rights and international norms and standards. 6 core principles are at the heart of Global Gateway, guiding the investments: democratic values and high standards; good governance and transparency; equal partnerships; green and clean; security focused; catalysing the private sector. Global Gateway is the EU’s contribution to narrowing the global investment gap worldwide. It is in line with the commitment of the G7 leaders from June 2021 to launch a values-driven, high-standard and transparent infrastructure partnership to meet global infrastructure development needs. Global Gateway is also fully aligned with the UN’s Agenda 2030 and its Sustainable Development Goals, as well as the Paris Agreement on climate change. source
Shalini Randeria (SR): Welcome to "Democracy in Question," the podcast series that explores the challenges democracies are facing around the world today. I'm Shalini Randeria, Rector and President of Central European University in Vienna and Senior Fellow at the Albert Hirschman Center on Democracy at the Graduate Institute, Geneva.
This is the sixth episode of season seven, and today I once again focus on China, a country that Western observers consider to be an authoritarian regime under one-party rule. However, leaders of the Chinese Communist Party proclaim their country to be a democracy, and curiously enough, 77 percent of Chinese citizens also believe that their country is a democracy. So, not only is the definition of democracy up for grabs, but what a democracy means seems to lie in the eyes of the beholder.
I am continuing my conversation from last month with Janka Oertel who heads the Asia Program at Europe's leading think tank, the European Council on Foreign Relations. Her powerful book in German titled, “The End of the China Illusion,”[i] was just published in September 2023. It makes a compelling argument about the urgent need to rethink Germany's and Europe's strategy towards China. Based in Berlin, Janka Oertel’s main areas are transatlantic China policy, Chinese foreign policy and security in the region. Her publications have dealt with EU-China relations and also U.S.-China relations, security in the Asia-Pacific region, and climate cooperation. She has testified on EU-China relations both before the United States Senate Foreign Relations Committee and the German Parliament.
With 15 years of scholarship on China, she clearly deserves to be recognized as one of the best-known experts on it in Germany and in Europe. But Janka thinks it's impossible to be an expert on China, given the size and complexity of the country, where just too much is happening too fast, and often quite unexpectedly. So, she prefers to say she's a China observer, rather than an expert. Her timely and provocative book cautions us against taking at face value the official Chinese rhetoric of it being a pragmatic, peaceful partner that aims to neither expand its military nor economic power. Seeing it simply as a business and technology partner is in her view a mistake, for China is not a market but a command economy. Its leadership aggressively advocates an alternative model of state capitalism under Communist Party control along with an alternative political ideology which has become quite attractive for many in the Global South.
Moreover, in her view it's imperative to see China as a serious systemic competitor that threatens liberal democracy by offering an alternative not only at the national level, but also by advocating for a different international order that challenges Western hegemony. Based on a realistic assessment of China's ambitions of global economic dominance, military might, and technological superiority, she suggests it's time to recalibrate European political, economic, and security options. Janka recommends shedding our illusions of China to take stock of its ambitions as a superpower and its perceptions of the West's weaknesses. This may be particularly the case now, as the party leadership may be trying to compensate for its own economic woes with a more assertive foreign policy, including by strengthening a military build-up in the region.
China’s Belt and Road Initiative launched a decade ago, and the more recent Global Development Initiative have often been criticized as thinly veiled projects of expanding global influence. Can these really be reduced to hegemonic aspirations? And has China’s growing presence in developing countries exploited the latter’s’ financial vulnerabilities through increasing debt? Can China be successful in challenging the transatlantic alliance through the expansion of BRICS, for example, or attempts to dethrone the U.S. dollar as a global reserve currency? Does Chinese ownership of critical infrastructure in the European Union and its control of economic supply chains threaten Europe's own strategic autonomy? And how can European and other democracies counter the global spread of Chinese Communist Party ideology disguised as mere economic interest? Should the EU therefore adopt a more confrontational and also more critical position vis-a-vis China's subversion of fundamental democratic values and human rights? I ask Janka also how vulnerable the Chinese system is to political protest of the kind that we have seen recently against harsh Covid measures in many Chinese cities and why do most Chinese citizens consider their country a democracy and even consent to an extensive system of surveillance that controls their everyday lives.
Finally, despite all efforts to promote higher fertility, China has a declining and rapidly aging population. How serious a limitation does demography pose to Chinese leadership's economic, political, and military ambitions. These are some of the questions I will explore with Janka Oertel on today's episode. Welcome back to the podcast, Janka, and many thanks for joining me from Berlin today.
Janka Oertel (JO): Thank you, Shalini. Thank you for having me again for take two of the China conversation.
SR: We began our conversation last month, Janks, if you recall, with China's recent economic turmoil, the seismic shocks of a collapsing real estate market and the construction bubble bursting, a general slowdown in growth to deflation, and also rapidly rising youth unemployment. You made a very important point then by arguing that the Chinese party leadership under Xi Jinping has so far managed to avert disaster by deftly changing course, something which we wouldn’t normally expect of an authoritarian, almost totalitarian system, after four decades of economic growth and after lifting millions out of poverty. Your argument was that the Chinese Communist Party has successfully put an ideological spin on the whole idea of economic development, rejecting what they consider to be Western consumerism and unlimited growth for the sake of mere growth. So, the political system has remained quite stable, despite many in the West who were expecting that it will not retain this stability in the face of all the economic problems that the country faces. But in your view, it would be naive to expect it to implode or even to collapse as a result of the current problems.
Paul Krugman recently pointed out that in the absence of a robust domestic consumption and with falling growth rates, China will simply be unable to continue investing excess capital, which is therefore likely to deepen the economic crisis. So, let me ask you once again, how confident are you about the capacity of the Chinese Communist Party to somehow mitigate these effects of the economic crises with ideological maneuvers of the kind that you described in our last conversation? And could this ideological control, rather than effective economic governance, backfire? So, Krugman has an interesting term for this, he calls it China's foreign adventurism, and do you think that might make China an even more dangerous strategic player regionally or in terms of global security?
JO: I think what we see, first of all, for our markets, and what is important, is that while domestic consumption is not kicking up, that Chinese exports are supposed to go up. That there is a focus on that strategy, and that exerts even greater pressure on our markets. We see it in the Chinese electric vehicles business at the moment. This is whyin the State of the Union address, the President of the Commission, von der Leyen, has just announced investigations into subsidies for Chinese electric vehicles because we're seeing this kind of flooding of the international markets with these products. So, I think that's the one effect that I'm looking at the moment.
Now, if you have asked me how confident am I that none of this is going to implode, I think you've read the book and you've read my skepticism about knowing everything that's going on in China full well all the time and making very, very sound predictions about the future. What we can say is probabilities, we can look at what does it seem like at the moment. If you look at the disappearing of the foreign minister, the disappearing of the rocket force commanders, if you look at the fact that the Chinese defense minister hasn't been seen in two weeks, then this would normally be seen as, oh, this spells trouble, something's going on. But whether that really is the case, we all don't know. We don't know what's going on inside the system at the moment, and we have to be very aware of the limitations that we're seeing.
From the economic data that we have, from the surveys that we get from China, from the confidence levels that we get, there is frustration in the Chinese middle class about the stagnation of the economic situation. But this has not necessarily translated yet into turmoil in terms of overthrowing the government. If everywhere is in trouble, then relatively are you better off or not? And I do think that matters to how people perceive their own situation. And so, I think the fact that you can point to 100,000 migrants in New York that are making the social systems in the U.S. collapse, if you can point to the economic challenges that European countries are facing at the moment, I do think that that's something that should not be underestimated in terms of how relatively secure do you feel. Because each side at the moment tells themselves, “Look at China, it's really bad right now.” And the Chinese are saying, “Look at Europe, it's really bad right now.” So, I do think just be cautious in the narratives that we're putting out there.
SR: In sociology, we use a term called “relative deprivation” to describe exactly the situation that you have analyzed, the question of whom is it that you compare yourselves to, whom do you feel relatively deprived in comparison to. So, it is a question of what the standard of comparison within the country, another class, another group, or transnationally. And that is what is making for an interesting debating game, as you point out, at the moment. Let me turn to something that I also just touched upon briefly the last time we spoke and that is the decade-old Belt and Road Initiative and more recently its replacement by the Global Development Initiative launched by China. The latter, the GDI, was announced during the pandemic and it appears to reflect a more conservative, should I say a more cautious kind of approach to speculative investments, which is probably not surprising given that China's own debt-to-GDP ratio has almost doubled in recent years, and its deficit has actually trebled from 2.1 percent of GDP in 2013 to 6.1 percent in 2021. Does this mean that the Belt and Road Initiative is dead? Has it really been fully replaced by the Global Development Initiative? And could you say something about the difference between these two initiatives, and their significance for the rest of the world?
JO: So, the most important thing to understand about these initiatives is that they're deliberately ambiguous. If you're trying to delineate them and be very clear about what each of them means, that's precisely not the point of them. It is precisely that you should be a bit unclear about what they mean because they serve as projection spaces then for the interests of the respective countries that you deal with. The Belt and Road Initiative is indeed, in terms of the rhetoric and the narrative, taking a step back. There is a very mixed result after the first decade of its existence. It's not gone. We will have the third Belt and Road Forum in October, where Putin will come for a visit, which is probably something that is important for the overall narrative as well. But it's still alive. It's just a bit in the broader communications, it has taken a backseat. And the Global Development Initiative, because it fits better into the kind of full package deal that Xi Jinping is offering with the Global Civilization Initiative, the Global Security Initiative, and the Global Development Initiative, it fits better into that logic from communications propaganda perspective.
The GDI is also very vague in what it actually wants to be. It's very vague in terms of whether there's actually any money attached to it or not, whether BRI is very much attached in our heads to massive money that's being poured all over the world. Also, very unproductive funding sometimes in projects that make very little sense economically. Not all of them. A lot of them did make sense, at least for China. But there's also the question of, there wasn't this master plan somewhere. I think in the book I was trying to figure out or trying to write down that we have this weird notion in the West that there's someone sitting in Zhongnanhai in the government central of the Chinese Communist Party and is at an Excel spreadsheet and going through and saying, we need this harbor and we need this road and then we're done. And it's not like that. It doesn't operate like that. There are kind of broader plans and then there's also interest of companies and everything else involved. So, what we are getting at the moment is a situation where these initiatives are sort of in parallel. They're used for whatever is more useful in the narrative terms in that respective moment. Belt and Road will be with us for quite some time, but it's just taken a bit of the narrative backseat.
SR: Some critics considered these massive infrastructural and development projects, that’s particularly the Belt and Road Initiative to be debt-trap diplomacy, as they call it. That is, it serves global expansion of Chinese influence, especially in the Global South, but at the cost of creating a debt trap for the receiver country. We’ve seen this in Sri Lanka, for example, last year. If you recall, last December, the president of the World Bank created a minor furor when he stated that two-thirds of the $62 billion, which developing countries must annually use to service their debt, is in fact owed to China. Of course, China disputes this figure. The question I would have for you is, is it just that China is making some good gambles and some bad ones? Sri Lanka being not a particularly good gamble, the Pakistan Belt and Road project also stalling or hitting many roadblocks. And then, as in the Sri Lankan case, also in the Pakistan case it’s the International Monetary Fund who has to pick up the bill, or is it that China really does take control of bits of the critical infrastructure like ports, which it has helped to finance, as well as of small and medium-sized firms even in Europe? So, how concerned are you that these kinds of acquisitions give the Chinese government not only strategic control of supply chains but also of global routes, and of logistics? How well-founded do you think this accusation of debt-trap diplomacy is?
JO: I think this has been a bit of a smokescreen for what has actually been going on, because a lot of the investments that the Chinese have actually produced, first and foremost, headaches in Beijing as well. Not all of this has been fantastically thought through and going really well. And a lot of it hasn't achieved the goals that it wanted to achieve, even if it comes with political capital that can be used for that. So, if you look at Pakistan, for example, I think it's a really good case.It hasn't actually kind of drawn in the Pakistani government in a way or made them do what China wants to do all the time. So, it hasn't fully served those purposes. I do think that the way China lends is important, and there's really good research being done, particularly at IFW in Kiel. Joseph Trebisch is doing fantastic work there in terms of how China lends and why the way China lends is the problem. Because of the kind of propositions that are being made in the deals, because it's very intransparent, and because there are paragraphs in the lending agreements that say Chinese debt always has to be serviced first, things like that make future debt restructuring really difficult. And China is not an experienced lender yet.
And so, this is what we're seeing in several cases now playing out where there is a willingness of the Chinese side to defer debt, delay payback time, but not to forgive debt, for example, and to not really have a good scheme in play in which you can then create conditions in which a country can get back to their feet and actually service the debt in the long run. So, the Zambia case that we've just seen was the latest restructuring question and the latest renegotiation of debt was a first step, I would say, in the right direction of Paris Club lenders and China having conversations together about how the future of the debt restructuring can look like. There's very limited willingness on the Chinese side to say, oh yeah, we forgive all of that debt.
So, I'm more cautious in using the term debt trap. I think there are situations that have been created because of the way that China lends that are very problematic for countries and that there is a huge responsibility on the side of China to fix that. It's also very important to say that oftentimes the lending has gone to countries that have themselves government that don't always have the best interest of their people in mind or their country in mind but serve very individual power and interest of a respective authoritarian government in many cases. So, I'm a bit more careful in labeling this and saying this is all China's fault. I think in this case, it really takes two to tango, despite the fact that China is in a kind of preferential position of this and is a position of power and can use that position of power. But I think it's a bit too easy if we say, in the West, China's doing this to these poor countries, and they don't know what to do, they have to take all this money. That's not how this works.
SR: Let's dwell on this whole question of China seeking to increase its influence in international organizations and trying to build up alternative development institutions. For me, it was quite telling that Xi Jinping declined to attend the latest G20 Summit in India, this was just after the expansion of the BRICS group had been announced, and at the G20 summit, the African Union was in fact admitted as a member. And this BRICS expansion was seen by many as another attempt by China to bolster its position as a geopolitical challenger to the hegemony of especially the U.S., in the international order. Now, one particular aspect of this challenge seems to be the Chinese leadership’s bid to replace the American dollar as a global reserve currency and international money of account with their own currency, the renminbi, Interestingly, for example, India is one of the countries who has been using this currency to settle its accounts in its purchase of Russian oil since the Ukraine war. So, how do you assess China's strategy and the prospects of success in regard to both the bid for international influence and the use of its own currency?
JO: I do think that the combination of the BRICS summit and the G20 summit were quite interesting to look at because the BRICS summit was a clear demonstration of Chinese power. The expansion of the membership was something that China has been wanting for a long time where other players were not as interested in that. It is something that gives leverage, but it's also intended to send a signal to the West of a club that the West is not part of and that China is an interesting partner for countries in the middle, for countries in between, and that those will not drop China for some weird Western ploy of creating blocks and confrontations. And that, I think, is particularly interesting in terms of the messaging that comes out of this.
Then there is the financing aspect of it. The New Development Bank, the BRICS Bank, that is designed to create alternative structures for financing in the future, but it's also designed to create different power structures in the international financial architecture. And I think if you listen to Dilma Rousseff, former Brazilian president who's now the head of the New Development Bank, and a former Maoist guerrilla fighter herself, when she speaks about this, there's a lot of this, there's the West that's trying to contain the rise of the rest. She's becoming a very good poster child for the narrative that China is also promoting, and I think that's very important. She gave a speech at the World Peace Forum in China that is really worth listening to. It's a few minutes of really clear pushing back against the West and its dominance. So, that I think in and of itself is important, having that narrative framework, in which you can operate.
The G20, on the other hand, is a forum because of all the Western countries in it, where China's relative power is smaller, and therefore snubbing it a bit, making it seem less important, is not a bad idea. And if you at the same time can create a bit of an affront to Modi, that is kind of killing two birds with one stone. The fact that Xi Jinping did not show up at the G20 but was talked about the entire time because he did not show up, was particularly cleverly done. You don't go, and by not going, you make everyone talk about yourself even more so. And you spoil the show for someone you would like to spoil the show for. So, I would say there's a lot of the talk about, oh, China's pulling back from international diplomacy and is not engaging in this war. It's just a different version of diplomacy. It's just snubbing the format that it doesn't like, but it has multiple visits to all the countries that it's interested in. Chinese leadership is reaching out massively in terms of international diplomacy. So, I think it's just a way of our own framing of this is, ah, they're not coming to the stuff where we would like them to come, but that's a different story, right?
On the renminbi and the financing question, this is one that I think we still have to wrap our head around and I have to still wrap my head around properly, what is really going on here? What is the second-best option? That's the one that I'm trying to write about in the book is obviously it would be nice to have the same thing akin to the dollar. To have a very powerful currency that you can wield as a powerful sword in getting your way politically, economically, and it's something that the Chinese government is really not a fan of, that the U.S. government is still capable of doing all of these things and is being able to threaten with just the sheer amount of force and power that the dollar has. So, just generally, conceptually, that is not a good thing to have in the world and China would like to replace that and it would just not like to have this situation any longer.
But also, there's an understanding that the things that it needs to do to have a powerful currency involve things like liberalizing your currency and capital accounts and all of these things that China doesn't want to do. So, if you know that you have an ideal version, and you know you can't reach that because of other things that are more important to you, what is the second-best option that you can get? And I think we're seeing thesealternative channels that are being established in relatively strengthening the renminbi as a currency of trust, and at the same time creatingalmost closed loops with countries that are less dependent on the international financial system, if we want to talk about it like that, like North Korea, like Russia, like Iran, where you can settle trade in without actually having all of those touch points with the international financial architecture that allow you for a sort of situation of crisis to have almost like a life jacket, right?
So, if you're in a situation where you actually have to fight, when you're in a military escalation with the United States, then where do you get fuels? Where do you get food? How can you make these payments still possible? It does seem to me like more of that is going on at the moment simultaneously to internationalizing the role of the renminbi. And I find that quite interesting to observe. I think there's a lot of trial and error here at play, but you can see how the power of the U.S. in the international financial architecture is one of the Achilles heels of the Chinese leadership's ability to exert power itself. And therefore, this is one of the main areas in which it addresses the problem by trying to circumvent and trying to find alternative solutions. But this is a difficult one to tackle.
SR: You've made a very powerful argument in the book, Janka, that Europe can only ignore China's global ambitions at its own peril. And it would be a fatal mistake to ignore Xi’s declared aim to turn China into a global superpower by 2049, namely within 100 years of the Chinese Revolution that brought the Communist Party to power in 1949. Could you say something about the perception that the Chinese leadership has of Europe? Do they have a particular strategy designed towards the EU or do they have a strategy in which they just combine Europe with the U.S., or the U.S. is their main focus and Europe is a little footnote? And do you think that the EU's Global Gateway initiative can in any way match China’s global ambitions that we have just discussed?
JO: So, if we put out our hopes on Global Gateway, we're lost. I think I would like to put that as clearly as that. It's been renamed three times, in the pipeline for years, not actually taking off. It can be an important tool if it actually can be equipped with financing if it can be equipped with a necessary political will to actually do something in the world. I think we can have multiple conversations about the fact that we're actually spending so much more around the world in terms of aid, in terms of financing, also in terms of infrastructure financing. But we really can't get that message across really well. And I think this is a bit futile as a conversation. Right? So, we have missed that boat in terms of making a really strong case for European engagement in the world. And we have to rebuild that. We have to rebuild trust in Europe. We have to rebuild trust in our ability to actually be a competitive player in the future. And that's something that where the homework lies with us entirely.
But I think the bigger question around this here is kind of what kind of taking Chinese global ambition seriously also means. We can't assume that we can reach an equilibrium where we can then nicely coexist. And I think that's the realm in which we still find ourselves. If you ask Europeans what their preference would be, it's of course, China should rise, and we should all have part in the global economy, and we should level the playing field, and engage in reciprocity, and have trades and be all working together to solve global challenges. Well, but that's not what the Chinese government is trying to do right now. It is trying to actually exert influence to make its own system stable and to gain more power to make itself more safe. And that's the main aim here. And I think acknowledging that is really important for us.
SR: Let me turn to another puzzle which I have about China and democracy. Your book alerts us to something really fascinating, the adoption by Chinese leaders of appealing universal ideas like multi-polarity, democracy, even advocating human rights, but with Chinese characteristics, whatever that may mean. To me, this looks like an absolute instrumentalization and an appropriation, but also relativization of universal and progressive ideas like human rights, also like democracy. If we look at February 2022, the meeting on the eve of Russia's invasion of Ukrainebetween Putin and Xi Jinping where he denounced Western support for and attempts to bring about democracy and rule of law in other countries, Xi Jinping also said this was imperialist interference. And on this occasion, he and Putin both declared something quite interesting. They said Russia and China each have its own democracy and should be allowed to define it on its own terms.
Now, that's something we can say, okay, leaders tell us anything that they think they can get away with as part of national or international propaganda. But the question is, the overwhelming majority of Chinese citizens seem to believe their leader. Seventy-seven percent of them consider their own country to be a democracy. And that's a puzzle, because at the same time as they do so, they are protesting against endemic corruption, lack of political accountability, and yet the suspension of fundamental rights or even growing economic inequality does not seem to produce the disillusionment with their own leadership among ordinary Chinese citizens, So, if the figures are correct, half of Chinese citizens earn less than only $10 a day. This does not seem to shake their faith in the leadership’s promise to deliver, and its description of itself as a democracy. So could we say that this is a system which has fulfilled so many dreams, that their attention is now turned elsewhere.
JO: So first of all, just to be clear about the figures that are being quoted, the 77 percent are part of the Societal Poll that the European Council on Foreign Relations, where I work, together with the University of Oxford, has been conducting over the last year. There's a continued project here, where it's about kind of polling how different parts of the world see things like democracy, see themselves relative to Europe or the United States. It's a very important project, I think, that can tell us more about global perceptions, etc. But polling is really difficult in China, and therefore this is not a representative poll of China, but this is a representative polling in major cities in China. Therefore, there is a significant selection bias in the group of people that is being surveyed. And I always want to point that out because it is different whether you poll in first-tier, second-tier cities in China, or in the countryside.
So, that said, the numbers are still pretty striking. And I think they are pretty relevant because that's also an elite, like a city dweller, an urban elite that the government is having to deal with. And if there is content among them, if they are happy, then that's more important for the government probably at the moment. I just wanted to make sure that the numbers are not seen out of their perspective because I'm a proper German social scientist as well, so I want just to always be sure that one has the framing for the numbers.
What I think is important is this, you said that you would see that as an appropriation, the terminology, well, it's not just you seeing that, that is what it is. It is a very clever way of relativizing and appropriating terminology to twist the words in the mouth of others. It's very difficult for us to deal with because if you have another that is different from you, then you can define yourself against the other. And then your contours become sharper because you define yourself against a potential really antagonist other. But if the other is trying to emulate you and to look like you and say, I am totally the same thing, I'm just looking a little bit different, your own contours become not as sharp anymore. And it becomes harder to define yourself against that. And then you say, but we have the right version of democracy. And the others say, but we have the right version of democracy. It's a different kind of shouting match than you had during the Cold War with, like, really clearly defined communism, capitalism categories where it made it a lot easier to define yourself against it.
So, I think it's a pretty clever tactic, actually, to take a lot of the steam out of the potential systemic differences that are there, or the actual systemic differences that are there, but to just make them seem a lot more ambiguous. This is particularly true for the human rights dimension, of course, where you say whether the relativizing of it has been a constant communication of the Chinese government saying, hi, yeah. So, you think individual rights for freedom are more important than collective rights to development. And this is not China-specific, this is something that you hear from many countries around the world, where this is about development first, this comes true in the whole environmental space as well, what is more important here, individual rights to freedom, or kind of collective protection of the environment, all of these things.
The democracy that is particularly interesting, though, because this has not been there from the start, but Xi Jinping has been focusing on that quite a bit saying these are the rights of democratization of international relations, which means less power to the West. Democratization, like the democracy, collective democracy in China, is more important than individualist democracy. Then you get all these adjectives, they describe what it is. It's also described as real democracy in China because it's more consultative and less confrontational. So, all of these terms help create a more benign image because it's framed around terminology that we use. But it's also designed to create all of these illusions about what this can be. And I think it's very successful, actually, because it works in the domestic space, but it also works for international propaganda. It's really hard for people to define what China really is at the moment because it's a communist, Marxist-Leninist system with Chinese characteristics and capitalist sprinkles, and lots of authoritarian surveillance. You have all of the elements in it and that becomes then a difficult animal for us to define and to work with.
SR:How attractive do you think is this particular mix: Marxist-Leninist, Maoist ideology combined with capitalist features controlled, however, by a single, powerful communist party. How successful can such a model be for export to many countries in the Global South who may very much prefer that combination of capitalism, controlled capitalism together with authoritarian features to Western liberal democratic institutions?
JO: Again, I'd be careful in terms of saying whether the countries would be so enthusiastic about it, whether the leaderships are enthusiastic about it, or the people I think is a big difference. In the book, I try to write that China doesn't want to see loads of other little Chinas out in the world. I think it's pretty China-specific in the way it is structured from the kind of organizational logic, the bureaucratic logic. There are all sorts of elements that are pretty Chinese about the way the Chinese system works. But there are, of course, elements in this that export well, includingauthoritarianism enhanced by a surveillance capitalism, a surveillance state that is technologically enhanced and superpowered and supercharged because of the way that the technology can be used. And this is, obviously, Chinese technology that can be used for mass surveillance. And that can have a massive impact on elections, it can have a massive impact on the ability of an authoritarian leader to stay in power, to stay in control. So, this is the bit that is being exported.
And what I'm trying to call it in the book is systemic...it's like a collateral damage that the system creates. Because of the way China is and operates, it will have an influence on how the world works. And it will export its standards, it will export the way it's operating to the places that it's interacting with. We’re doing the same. I mean, we have a systemic collateral damage as well when interacting with us because we want certain standards to be in place when we lend or we want certain standards to be in place when we trade. And so, to assume that China's influence on the world would be neutral and would not have a systemic shaping effect, that would be a folly because that's obviously what is happening right now.
Therefore, this idea that the narrative that the Chinese government is promoting saying we don't export our model has this idea that we are insulated. This is not having an effect on the world. It's just us. Don't worry about it. Trading with us is neutral. Technology from China is neutral. And that's just not true. You don't have to actively say, I'm promoting my model and trying to “authoritarianize” the world, but you're going to have an impact on the world.
SR: I think this is a very, very important point that you are making about the implicit transportation of many of the values along with technology that just travel together as a package. It's baggage which some of these technological exports to the world carry so that this technology is anything but neutral. Now, let me turn to domestic politics for a moment. What I found quite surprisingly was the sudden reversal recently of China's really harsh COVID lockdown policies due to strong public protests in several cities, and interestingly a lot of senior citizens who were coming out in protests on the streets, not just young people. And the senior citizens were protesting also against poor health infrastructure that they were being offered by their government. How vulnerable is the Chinese system to this kind of political protests or are they relatively restricted both in terms of issues like corruption, or ecological damage, or labor conditions at the local level, so that the party can still manage to contain disaffection by allowing limited discontent in this particular area to be expressed at the very local level on a particular issue and that it will not become a larger systemic challenge?
JO: I mean, the party has just demonstrated that it is capable of doing that. Because that has been the lesson learned from the COVID protests is that this was a very significant movement. It was in large cities, it was universities, it was sort of coordinated. It wasn't just pensioners in Wuhan that were angry about their pension and their health support. But it was something that had the feel of a coordinated uprising among a young generation that seemed frustrated and that was using methods that it had learned online, that it had seen in protests in Hong Kong. There was a lot of this that was kind of scary in terms of how big it was. And it took a few days, and it was done. It was done because there was a response of the government. It's like, okay, no more zero COVID then. There you go. I think it was a combination of that. I think just attributing the end of the zero COVID measures to the protests, is a bit wrong because there was also a lot of pushing from the system because the economic data was looking so terrible. There was a lot of pushing from other areas as well. And it was sort of a moment in which the government could do that and actually reap some benefits. Literally just kind of quenching that and stopping that protest movement in its feet and saying, okay, we're very responsive, you don't like it, therefore, there you go, and it's over.
But what has happened, and I think that's the dark side of this, is that in the past, when there were mass protests, the Chinese government, or other authoritarian governments around the world, would have to line up people, arrest people, bring them away, and that creates pictures that are very not nice. It looks like a surveillance state, it looks like a police state when you shove 20 people in a police car and you transport them off. But because of the way the surveillance system now works, you don't actually need to do that. Because you have surveillance on the street, have facial recognition in almost every place, you can identify the people later on, and then when everyone has dispersed, you just quietly knock at the door and you scare them there or you arrest them there and that creates no images at all. It is after the fact, it's when international media doesn't look anymore. A lot of the people that were part of the A4 protests were later arrested and I think that's a version of the ability of authoritarian states to handle protests that we haven't quite incorporated yet into our thinking what does protest under the conditions of almost maximal surveillance look like. It gives the state different options at hand. In the research that we do on these things are not fully incorporating yet.
And so, I think it was a very interesting lesson that we learned from these protests that it demonstrated a very powerful response was possible with actually very limited damage. Still, I have to say, these protests were, of course, something that was quite emotional for many that were watching this from the outside. There is a Chinese-born journalist in Germany, and she was writing very emotionally about this in terms of a window that was opening, and you could see something that was possible, and you could see something that was there, where you would say you had all of these empty sheets of paper, but you knew exactly what was supposed to be on them. You didn't need to spell it out. I think that had a very powerful message to it. And I do think that the wit and the intelligence with which some of these protest forms were done at the universities in China give us an insight into the heads of Chinese youth that are creative, that are innovative, that are interesting in the way they think.
In all of the darkness that sometimes...when researching these things and you do the research on authoritarianism as well and what it means for democracies, and I think sometimes just seeing that and seeing why you have to be so scared of democracy as an authoritarian state because it is just really powerful as a message. And it has potential to get to people. It was a double-edged sword in a way, those protests, that were sending a very strong message, but it was very short-lived. It did remind me a bit of the Hong Kong protests, which were incredibly powerful, were incredibly smart. They were very interesting in the way they were done. It was a whole new kind of form of protest movement that was created. But in the end, the party won.
SR: So, let me pick up this point about young people because this is the cohort which is facing 21 percent unemployment currently. And that brings me to the last topic, which I wanted to discuss with you, which is surprisingly absent in your book, and that is China's demographic dilemma. Despite all efforts to now promote higher fertility, China has an aging and declining population. China’s declining population is exactly what it wanted to achieve 40 years ago and did this with extraordinarily brutal and repressive measures including forced abortions, forced sterilizations, insisting that couples have only one child. This brutal one-child policy has been enormously successful and the legacy it has left is not only the problem of a declining population but also a large gender imbalance, with men outnumbering women, and of course a growing aging population without the benefits of welfare state support. How serious a limitation, in your view, does demography then pose to Chinese leadership in terms of its economic, political, and military ambitions?
JO: So, if nothing is done about this, then it is significant. What we're seeing is not only the demographic problems, that means that you have a shrinking working population, but also decline in productivity at the moment because there has been a lot of investment in unproductive sectors. And so, this is a pretty deadly combination. If you put that together, declining the population and declining productivity, then you wind up at negative growth relatively quickly. There are some calculations that say by 2030 already, you would have negative growth or a shrinking Chinese economy. Negative growth is a bit of a weird term. If you control for other factors, so if you are able to bump up productivity through automation, through other measures, then you could actually do something about this.
So, the U.S. figures look a lot better in terms of the demographic situation and more stability for the next 30 years in that regard because we factor in migration, because the U.S. is just a very attractive place for migration. Now, the Chinese government obviously could do that too, if it wanted. It's not something that they have great experience in. I don't think it's anything that they want to do. But it's not like a law of physics that China's demographic situation has to look the way it looks now in the years to come. So, what are the levers that can be pulled? What are the levers that should be pulled? This is, of course, a huge discussion right now. And just having more babies is one of the elements that you can play with. Then, investing significantly in automation is one of the elements that you can play with. So, you just need a smaller workforce and that's actually better, then, for everyone. And what we're seeing right now is the slightly schizophrenic messaging, right, 21 percent youth unemployment and a major demographic crisis in the future. Those two actually don't go together really well.
So, there's lots of potential right now to invest in the economy if you wanted to. There are a lot of structural opportunities, structural levers that can be pulled and played with if you wanted to. I think the Chinese leadership is not out of options, but it has not been very creative in the last few years in using the options that are available. I wouldn't write that off, though, entirely in saying that they're not capable. The doomsayers that are saying, this is all bound to fail anyway, I think it's a bit too easy because the party has demonstrated that it is able to self-correct in a certain way in a more dynamic way than we have expected, particularly after grand catastrophes. So, we'll see what happens. But I think just boiling down China's success to its demographic problem is not good enough. One can have a really long conversation about feminism in China, one should have a really long conversation about the role of women in general in China, but it's probably for another podcast.
SR: That is true, but I did want to ask you to say something on this topic because, obviously, they've been very successful at convincing Chinese women to just have very small families, one child. Since they were so successful at doing this through extremely illiberal repressive means, which also means it's almost impossible to get couples to reverse their preferences and have larger families today. Is this only because it's so expensive to have a child in China? Or do women have different aspirations or different ideas meanwhile of a good life?
JO: It's expensive, but it also limits your opportunities then for your own career and your workplace. It's something where this will be interesting to see how it plays out over the next few years and decades in terms of the societal pressure on women to have more children. Because in general, kind of the family pressures do play a pretty important role. And the role of women is not the established Mao, kind of you own half of the sky, women play an equal role in government. That's not the case. And so, the social pressures could change in a different direction as well. But so far, a lot of women have been actively passive in supporting the government in its ways and have contributed to their own wealth and their own, kind of, careers and in their own workplaces. And smaller families are more conducive to that.
The real power of feminist conversations in China, though, is one that the government is deeply, deeply worried about, and therefore has clamped down quite significantly on. So, we see a lot of feminists in exile. But indeed, this is probably a really long conversation because what the future holds for Chinese women and what the contribution of Chinese women in the world that is sort of missing at the moment in various aspects and how that relates to the past of Chinese feminism. I think there is fantastic research being done. Maybe we can throw in a book recommendation here, "Betraying Big Brother,"[ii] by Leta Hong Fincher. That's a really good book to read if one is interested in the feminist discourses at the moment that are taking place in China.
SR: Thank you, Janka, for this fantastic conversation: wide-ranging, insightful, hard-hitting as far as the need to course-correct on the European side of the Europe-China relationship is concerned and for this remarkable range of insights that you have provided into so many aspects of Chinese politics, economy, society and everyday life. Thanks so much for being with me today.
JO: Thank you, Shalini, for having me on again.
SR: An important takeaway from my conversation with Janka today is the realization of the limits of our knowledge when it comes to China. Janka reminded us that valid insights are hard to disentangle from wishful thinking that often fuels our illusions about China.
Predictions about the future course of the Chinese economy and politics are thus based on shaky ground. Or to invoke Donald Rumsfeld's famous clip, we are in the realm of known unknowns. Mutual distrust also drives narratives of relative economic decline on both sides. What is, however, clear is that despite domestic slump and potential turmoil, China continues to pursue an aggressive strategy of export, exerting formidable pressure on European markets.
Interestingly, as Janka also explained, the vagueness of policy, its fuzziness and the unpredictability of outcomes is something which the Chinese Communist Party leadership is deliberately cultivating. Chinese initiatives from the Belt and Road to the Global Development one also serve a clear propaganda purpose. Debt servicing has not been as smooth a process in many developing countries as probably China expected. Yet, through these global initiatives where China has financed large scale projects, it is increasingly challenging the hegemony of the U.S. and the West in the international order as well. The recent expansion of BRICS has consolidated the role of China as a geopolitical actor. The group's new development bank is meant to play an important role in offering an alternative to the existing global financial architecture anchored by the dollar. However, turning the Chinese currency into a global reserve currency is far from a foregone conclusion. Though currently Russia, Iran, North Korea, or even India are benefiting from using the renminbi to settle accounts.
The relative geopolitical success of China in the last two decades throws into sharp relief the alarming inability of Europe to achieve the same. As Janka has argued, trust in Europe needs to be rebuilt, including Europe's own trust in its own ability to be a competitive player in the world. This means abandoning the optimistic illusion that China is a disinterested equal partner that can simply be engaged in mutually beneficial trade. As she pointed out, China has been successful in appropriating and redefining universal values and ideals like democracy or human rights. Its global expansionary agenda does not openly promote a full ideological package. Nevertheless, its export of quasi totalitarian surveillance technologies carries the risk of what Janka calls the collateral damage of shaping democratic societies by enabling authoritarian tendencies.
The myth of Chinese neutrality, including the neutrality of its technology, thus needs to be urgently debunked. Recent mass protests within China may open the prospect of some societal change, but so far they've been short lived, which testifies to the stability of the authoritarian state capitalist model the Communist Party has embraced and implemented. This resilience, if combined with sufficient creativity, may also allow the party to overcome some of the structural imbalances resulting from China's demographic predicament and aging and declining population, along with decreasing productivity. So, in short, we've learned a lot about China today, including about what we do not know and cannot currently know. This insight makes the unfolding of world history before our very own eyes an exciting, if somewhat daunting, prospect.
This was the sixth episode of season seven. Thank you very much for listening and join us again for the next episode in a fortnight's time. My guest will be Kalypso Nicolaidis who is a professor at the European University Institute in Florence. She will share with us her ideas about the possibilities of reimagining democracy from below in Europe and beyond.
Please go back and listen to any episodes you might have missed. And of course, let your friends know about the podcast if you're enjoying it. You can stay in touch with the work of the Central European University at www.ceu.edu and the Albert Hirschman Center on Democracy at www.graduateinstitute.ch/democracy.
[i] Oertel, J. (2023). Ende der China-Illusion: Wie wir mit Pekings Machtanspruch umgehen müssen. Piper.
[ii] Fincher, L. H. (2021). Betraying big brother: The feminist awakening in China. Verso.