President Barack Obama’s first official trip to China resulted in no firm agreements and has been criticized as being tightly scripted by Beijing. We discuss Obama’s visit and the future of US-Chinese relations with British author and journalist Martin Jacques, author of When China Rules the World: The End of the Western World and the Birth of a New Global Order. [includes rush transcript]
AMY GOODMAN: President Barack Obama has just finished his first official trip to China. He met with Chinese leaders, visited the Great Wall of China, and hosted a town hall with university students in Shanghai. The trip resulted in no firm agreements and has been criticized as being tightly scripted by Beijing. Chinese President Hu Jintao said Tuesday the two leaders had agreed to increase international cooperation on climate change, environment, energy, and economic and trade issues.
PRESIDENT HU JINTAO: [translated] Just now, I had very good talks with President Obama. The two sides had in-depth exchange of views on how to further the bilateral relationship and on other major regional and international issues of shared interest. The two sides reached broad and important agreements. The talks were candid, constructive, and very fruitful.
AMY GOODMAN: Hu added he had stressed the need to, quote, "oppose and reject protectionism in all its manifestations." Chinese exports to the United States are nearly five times as large as American exports to China. China is also the United States’ largest creditor, holding nearly $800 billion of US debt. Obama hailed China as an economic partner that has, quote, "proved critical in our effort to pull ourselves out of the worst recession in generations," unquote.
Against a backdrop of rising tensions in Washington over exchange rates, Obama also urged China to strengthen its currency. The Chinese currency has been pegged to the US dollar since last year.
PRESIDENT BARACK OBAMA: And I was pleased to note the Chinese commitment, made in past statements, to move toward a more market-oriented exchange rate over time. I emphasized in our discussions, as have others in the region, that doing so, based on economic fundamentals, would make an essential contribution to the global rebalancing effort.
AMY GOODMAN: Well, for more on President Obama’s visit and the future of US-Chinese relations, I’m joined here in Burbank, California by British author and journalist Martin Jacques. His latest book, just out in the United States, is called When China Rules the World: The End of the Western World and the Birth of a New Global Order. He is a visiting senior fellow at the London School of Economics and a columnist for The Guardian and New Statesman in Britain.
Martin Jacques, welcome to Democracy Now! You’re here speaking at UCLA and USC, University of Southern California. First, assess Obama’s trip. How significant was it? How historic? What was accomplished?
MARTIN JACQUES: Well, I think that the relationship between the United States and China is going to be absolutely pivotal to global affairs, because they’re the two most important countries in the world, and they’ve got to get on. And I think that the fact that they’re talking, the fact that they discussed many issues, from currency questions to global warming and so on, that in itself is a significant achievement. And there are going to be many such exchanges, of course.
AMY GOODMAN: Talk about the main points of the meeting, what you think President Obama wanted to accomplish, President Hu, what he wanted to accomplish. Many are saying President Obama got very little from China.
MARTIN JACQUES: Well, I think that the two key issues are about the state of the global economy. The Chinese angle on this is that they want to, as far as possible, protect their money, the huge amounts of money in US debt. So they’re worried about the value of the dollar. And they’re also worried about the buoyancy of the American and Western markets in terms of their own exports, because those are their biggest export markets.
But on the American side, they’re particularly concerned about the valuation of the RMB, the Chinese currency, which they feel to be undervalued. There was no significant shift on either side in relationship to this, as far as one can tell. But these things are rarely — any shifts will not be taken at a meeting like this. That is not how the Chinese operate.
AMY GOODMAN: How do the Chinese operate?
MARTIN JACQUES: Well, the Chinese — the Chinese do not want to be seen to be pressured. So if you pressure them, you’ll get a negative response. But they do listen. And over a long period, there’s been a lot of cooperation between the United States and China. It’s not that the Chinese are immune to what the Americans say, but if the Americans say it in the wrong way, they’ll get the wrong Chinese reaction.
AMY GOODMAN: Your book is called When China Rules the World. Explain.
MARTIN JACQUES: Well, quite simply, we’re living in extraordinary new times, characterized by the rise of the developing world as opposed — and the relative decline of the developed world, the rich world. And the most important example of this trend is the rise of China, which is projected to overtake the size of the American economy around 2027. And by 2050, the Chinese economy will be twice the size of that of the American economy. This represents — of course, it’s quite a long and protracted process, but will fundamentally shift the economic center of gravity in the world and will have also profound political and cultural implications.
AMY GOODMAN: Talk about those implications.
MARTIN JACQUES: Well, there’s been a funny old assumption in the West somehow that China’s rise is just an economic story. If you go to the bookstores and look at what’s been written about the rise of China, it’s almost solely economic, in a contemporary sense. But this is obviously ridiculous, because the rise of a new global power always ushers in the expression of a much more comprehensive political, cultural, intellectual, military, moral influence, and this will in time happen in China.
And that’s why I argue the end of the Western world, not that the West is going to meet its maker and, you know, there’s going to be the demise of the West. On the contrary, I mean, America will get richer, as other Western countries will get richer. But it will no longer shape the world, as it has in the last sixty years, or the West, in general. For 200 years, we’ve lived in a Western-shaped world. That era is progressively going to come to an end, as China becomes more and more influential. And you can see this already happening in certain parts of the world, much more than in the West. I mean, East Asia is already being increasingly shaped by Chinese influence of many different kinds.
AMY GOODMAN: Like?
MARTIN JACQUES: Well, for example, the rise of Mandarin in the region. I mean, it’s already a compulsory language in several countries — Thailand, for example, and South Korea. And I would expect Mandarin to become, over the next fifty years, a second language in the region, alongside English, maybe usurping English in the longer run. What we’ve got to remember about East Asia is it’s home to one-third of the world’s population, and it’s already the largest economic region in the world. It’s bigger than North America, and it’s bigger than Europe.
AMY GOODMAN: So, you’ve got the issue of language. What are the other issues where you’ll see this dominance? And also, what about China in Africa?
MARTIN JACQUES: Well, I think that we’ll — in all sorts of ways, we’ll see Chinese ways of thinking, which are drawn from, you know, a very powerful sense of its own history, influencing the world. I mean, let me throw something out, you know, that China is not really even a nation state in any conventional sense. Now, we’re so used to thinking of countries as nation states. They arrived at something which isn’t really a conventional nation state. It’s really a civilization state, which thinks and acts in a completely different way to the way in which Western states have operated. So this kind of — the Chinese way of thinking will become — will begin to permeate those areas of the world in which it — with which it comes into contact.
And, of course, over the last ten years, there’s been an extraordinary change, which is that China has become extremely active, proactive with many regions. Latin America is one example, but the most dramatic, in a way, is Africa, which is a very short period of time. But China is really becoming very rapidly the most important economic partner of the African continent.
Now, how to understand this, I think, is going to be a very — you know, it’s going to be a complex process. Generally, Westerners react by saying, “Ah, maybe this is a new form of colonialism.” And it may be that there will be elements of similarity. But personally, I would suggest that if we want to understand the relationship between China and Africa, maybe we should go back to something that, as Westerners, we’re entirely unfamiliar with, which is the tributary state period, which was the way in which China organized its relations with East Asia for well over 2,000 years and only came to an end a hundred years ago.
AMY GOODMAN: We’re talking to Martin Jacques, British journalist, author of When China Rules the World: The End of the Western World and the Birth of a New Global Order. We’ll come back to this discussion after break. Then we’ll find out what’s happening in Iraq with the Vice President in Iraq ruling on the elections. Will they take place? And we’ll be following what’s happening here in California within the school system, as well as talking about various issues in international and national law.
This is Democracy Now!, democracynow.org, The War and Peace Report. Back in a minute.
AMY GOODMAN: When China Rules the World. That’s the name of a new book by Martin Jacques, a British journalist and author, has come to this country, speaking at — here at UCLA and at USC.
Martin Jacques, what does it mean to say China is the US’s largest creditor? What does that mean? How does that determine US-Chinese relations?
MARTIN JACQUES: Well, what it means is that America has been spending beyond its means, not saving sufficiently, and in order to cover its deficits, it’s been borrowing money by selling US bonds, government bonds, and by far the biggest purchaser of these bonds has been China, been a dramatic change over the last ten years. So now something like $800 billion is held by the Chinese in US debt. In other words, the US owes China, in effect, $800 billion of credit.
And what that means is that, for example, if the Chinese stop buying it — they’re continuously buying them now, but if it started to stop buying them in the way they have been buying them, or decided to sell them, there would be a collapse in the value of the dollar, with untold consequences for the position of the dollar as the global reserve currency and the position of New York as the global financial center. I mean, in effect, what’s happened is that China has become the United States’s banker, and the United States owes its banker a lot of money. That is obviously a powerful, very important shift in the relationship.
AMY GOODMAN: Let’s talk about this relationship and how it’s gone. I think, for most Americans, they know about the Tiananmen massacre. They know about the Olympics that took place in China. And now there’s President Obama’s trip. Can you talk about how China has changed through this period and also the US-Chinese relationship — you’re from Britain — the West’s relationship with China?
MARTIN JACQUES: Well, for thirty years, ever since 1978, the Chinese economy has been growing at around about ten percent a year, which is phenomenal. Remember, this is a country with a population of 1.3 billion, a fifth of the world’s population. So that means that the Chinese economy, in size, has been doubling every seven years. And it also means that Chinese living standards have been proportionately transformed. So, if you go to any of the big Chinese cities, and notably Shanghai, Beijing and so on, you’ll see a very — in many ways, very developed cities. But, of course, China is very diverse, so half the population still lives in the countryside, and many people are poor. But this transformation has meant that China has been responsible for more than half the reduction in global poverty over the last thirty years. So this is the most remarkable economic transformation in human history.
Now, one of the problems is the West finds it, I think, very difficult to understand the process that’s taken place. It’s had an agenda for China, as it has an agenda for other countries, and it’s felt that China should be more like us. Or this process — I mean, both the Clinton and the Bush presidencies were informed by the idea that China’s modernization would be a process of Westernization, in which China would end up, in terms of political system, media and so on, like us. And it hasn’t. It hasn’t. And I think this is raising a big question for Western leaders, which is, so maybe China will not inevitably become like us — in my opinion, it will not, because a country is shaped not just by markets and technology and so on, but also by its history and its culture. And this is something that Western hubris is not good at addressing, because historically, for 200 years, we’ve always thought that ultimately other cultures will bend to our will and become like us, because we are the state of the art. And this will not be true in relationship to China. It’s an illusion. And while this illusion persists, our understanding of China will be limited.
We’ve made so many predictions about what would happen to China over this period that have been wrong. You know, after Tiananmen Square, China would divide. The Chinese Communist Party would wither away or collapse like the Soviet Communist Party did after the fall of the Berlin Wall. Didn’t happen. They offered — when Hong Kong was handed over by Britain to Hong Kong — to China, China said, “One country, two systems.” We said — we didn’t believe it. They meant it. They meant it. It is one country, two systems. So, another prediction: the economic growth would not last. It has lasted. So we’ve got China wrong in so many ways. We need to rethink how we understand China, because it’s never going to be a Western-style country.
AMY GOODMAN: You begin your book by citing Goldman Sachs, which projects China’s economy will be bigger than the US by 2027, nearly twice as large by 2050, though Chinese will still be poorer than Americans. Explain that.
MARTIN JACQUES: Well, this is a new phenomenon, really, because we’ve never had before a developing country becoming one of the world’s biggest economies. Hitherto in the Western world of the last 200 years, since the British Industrial Revolution started in 1780, every country which has been top dog has been — had a big economy and a very high standard of living, every — Britain, Germany, France and, of course, the US. Now we’re in a different situation, where the biggest economies in the world are increasingly going to be very populist countries, and therefore they’ll have big economies, but they will also have a relatively lower standard of living. This is a new situation.
AMY GOODMAN: The latest news out of Xinjiang, China executing nine people, the whole Uyghur rebellion. How does that fit into China’s story?
MARTIN JACQUES: Well, this is another aspect of China’s story which, again, is something we need to try and understand better, which is that, historically, the vast majority of the Chinese consider themselves to be Han. The process of the creation, ethnic creation, of modern China is the Han-ization of China. Over nine out of ten people in China, very unlike India or the States, consider themselves to be Han. It works really like a sort of mono-ethnic society. The result of that is the Han, not just now, but over a long historical period, have had a very weak conception of cultural difference. They don’t respect cultural difference. And so, I think the problem in the Uyghurs in Xinjiang and the Tibetans, for example, is that essentially the Han want to Han-ize them. And that’s the difficulty, because they don’t want to be Han-ized. They’re proud of their own culture, their religion, their language, and so on. And so, one has to say that the whole approach to the question of Tibet and Xinjiang has essentially failed. That’s what the riots this year and last year represent.
AMY GOODMAN: And the whole issue of human rights overall?
MARTIN JACQUES: The whole — that is a related, but not the same, question. The question of human rights, in general — I mean, China, I think, generally has improved a lot in this area. I mean, you know, developing countries have everywhere very mixed reputations in these terms, because the whole issue of development out of poverty and so on, you know, it’s an authoritarian life that people lead. They don’t have choices in the way that we enjoy choices in the West. And so, China has had a very indifferent human rights record. But so has India, by the way, and that’s a democracy. But I think the situation has got better, but it still leaves, you know, much room for improvement.
AMY GOODMAN: I want to thank you very much for being with us. Martin Jacques is a British journalist and author of When China Rules the World: The End of the Western World and the Birth of a New Global Order.