When China Rules the World (65 page)

For the last two centuries Caucasians have enjoyed a privileged position at the top of the global racial hierarchy. During the period of European colonial empires their pre-eminent position was frequently explained in terms of racial theories designed to show the inherent superiority of the white race. Since the mid twentieth century, with the defeat of Nazism followed by colonial liberation, such explicitly racial theories have been in retreat in most regions of the world and now enjoy only minority appeal in the West. Nonetheless, if such racial theories are no longer regarded for the most part as acceptable, there remains an implicit and omnipresent global racial pecking order, with whites invariably at the top. Various factors helped to shape this hierarchy, including levels of development, skin colour, physical characteristics, history, religion, dress, customs and centuries-old racist beliefs and prejudices. Throughout the world, white people command respect and deference, often tinged with fear and resentment, an attitude which derives from a combination of having been globally dominant for so long, huge wealth and power, and genuine achievement. The rise of China to surpass the West will, over time, inevitably result in a gradual reordering of the global hierarchy of race.
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Although possessed of an inner belief that they are superior to all others, the Chinese sense of confidence was shaken and in part undermined by the ‘century of humiliation’. This found expression during the 1980s in what Wang Xiaodong has described as ‘reverse racism’, or a desire to ape and copy the West, and denigrate things Chinese.
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That phase, however, is increasingly giving way to a growing sense of self-belief and a return to older attitudes. The idea that China must learn from the West is being joined by the proposition that the West needs to learn from the East.
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The fact that the Chinese sense of superiority survived more than a century of being hugely outperformed by the West is testament to its deeply ingrained nature. As China becomes a major global player, this feeling of superiority will be supported and reinforced by new rationales, arguments and evidence. Chinese racial discourse, furthermore, as we saw in Chapter 8, differs in important respects from that of Europe, primarily because its origins lie in China’s existence as a civilization-state rather than as a nation-state.

In a few limited areas, such as football, athletics and popular music, the global predominance of Caucasians has come under significant challenge. But the ubiquity of the white role-model in so many spheres - business, law, accounting, academe, fashion, global political leadership - still overwhelmingly prevails. Figures like Barack Obama and Tiger Woods remain very much the exception, though the former’s election as American president is highly significant in this context. Nelson Mandela came to enjoy enormous moral authority throughout the world but enjoyed little substantive power. With the rise of China, white domination will come under serious challenge for the first time in many, if not most, areas of global activity.

The pervasive importance of racial attitudes should not be underestimated. International relations scholars have persistently neglected or ignored their significance as a major determinant of national behaviour and global relations, preferring instead to concentrate on nationalism; yet, as we saw in Chapter 8, race and ethnicity are central to the way in which nations are constructed.
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This has been well described by the Chinese international relations scholar Zi Zhongyun in the case of the United States.
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The fact that there has been virtually no challenge to, or questioning of, widely held racial prejudices in China, that they are regarded as normative rather than abnormal and that there is no culture of anti-racism, means that they will continue to exercise a powerful influence on how China sees the world, how the Chinese at all levels of society regard others, and how China will behave as a nation. Of course, as China becomes increasingly open to the world and mixes with it on a quite new basis following centuries of being relatively closed, then some of the old prejudices are bound to wither and disappear, but the persistence of these kinds of attitudes, rooted as they are in such a long history, will remain. As the dominant global power, China is likely to have a strongly hierarchical view of the world, based on a combination of racial and cultural attitudes, and this will play a fundamental role in shaping how China views other nations and peoples and its own position at the top of the ladder.

The concept of the West is intimately linked to European expansion and the migration of its population to far-flung parts of the world. This is a neglected issue, something that is largely taken for granted and little scrutinized. It was European emigration that led to the creation of the United States as a white-dominated society in the northern part of the American continent, and likewise in the case of Canada. The term ‘Latin America’ derives from the Spanish and Portuguese colonization of South America and to this day finds expression in the fact that the elite in these countries remains predominantly white and is largely descended from the original colonial families.
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Similarly, British migration created a white Australia - which, together with New Zealand, formed in effect an Asia-Pacific outpost of the West - based on the suppression, decimation and subsequent marginalization of the indigenous Aborigine peoples. But for that, Australia and New Zealand would today be Aboriginal and Maori countries respectively, with entirely different names, languages and cultures. If European migration to South Africa had been on a much greater scale, then the large white minority population might have been in a majority, thereby making white rule permanent. The European, or white, diaspora has had a huge impact on the nature and shape of the world as we know it.

Unlike the white diaspora, which was a product of relative European power and wealth, the Chinese diaspora was largely a consequence of hunger and poverty at home, combined with the use of Chinese indentured labour by the British Empire. This notwithstanding, the Chinese diaspora in South-East Asia enjoys, relatively speaking, disproportionate economic power, while Chinese ethnic minorities more or less everywhere have experienced increasing economic success in recent decades. From being industrious but poor, the Chinese are steadily rising up the ladder of their respective adoptive homelands in both economic and cultural terms. That process is being driven in part by the growing power of China, which is serving to raise the self-confidence, prestige and status of the overseas Chinese everywhere. The multifarious links between the mainland and the Chinese diaspora, in terms of trade and Mandarin, for example, are predictably helping to enhance the economic position of the overseas Chinese. In some Western countries, notably Australia and also in Milan in Italy, where there have been clashes between the increasingly prosperous Chinese community and the local police, there has been evidence of strong resentment towards the local Chinese.
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The recent success of the Chinese, who have traditionally been regarded as inferior and impoverished, has proved disconcerting for sections of the Milanese population. But as China becomes steadily wealthier and more powerful, the Western world will have to get used to the idea that growing numbers of Chinese at home and abroad will be richer and more successful than they are.

The other side of the coin is China’s attitude towards the overseas Chinese. As mentioned earlier, one of the narratives of Chinese civilization is that of Greater China, an idea which embraces the ‘lost territories’ of Hong Kong, Macao and Taiwan, the global Chinese diaspora and the mainland. The Middle Kingdom has always been regarded as the centre of the Chinese world, with Beijing at its heart and the disapora at its distant edges. All Chinese have held an essentially centripetal view of their world. The way that the diaspora has contributed to China’s economic transformation is an indication of a continuing powerful sense of belonging. The rise of China will further enhance its appeal and prestige in the eyes of the diaspora and reinforce their sense of Chineseness. The Chinese government has sought, with considerable success, to encourage eminent overseas Chinese scholars to work and even settle in China. Meanwhile, as discussed earlier, Chinese migration is on the increase, notably to Africa, resulting in the creation of new, as well as enlarged, overseas Chinese communities. It is estimated that there are now at least half a million Chinese living in Africa, most of whom have arrived only very recently. There are over 7 million Chinese living in each of Indonesia, Malaysia and Thailand, over 1 million each in Myanmar and Russia, 1.3 million in Peru, 3.3 million in the United States, 700,000 in Australia and 400,000 in the UK; the approximate figure for the diaspora as a whole is 40 million, but this may well be a considerable underestimate.

How will this relationship between China and the diaspora develop? Will the mainland at some point consider allowing dual citizenship, which at the moment it does not? Is it conceivable that in the future there might be a Chinese Commonwealth which embraces the numerous overseas Chinese communities? Or, to put it another way, what forms might a Chinese civilization-state take in a modern world in which it is predominant? A commonwealth would no doubt be unacceptable to other nations as things stand, but in the event of a globally dominant China, the balance of power would be transformed and what is politically possible redefined. The impact of any such development would, of course, be felt most strongly in South-East Asia, where the overseas Chinese are, relatively speaking, both most powerful and most numerous.

Chinese economic power will underpin its global hegemony. With the passing decades, as the Chinese economy becomes increasingly wealthy and sophisticated, so the nature of that power will no longer rest primarily on the country’s demographic clout. It is impossible to predict exactly what this might mean in terms of economic reach, but, given that China has a population around four times that of the United States, one might conjure with the idea that China’s economy could be four times as large as that of the US. In mid 2007, before the credit crunch, with rapidly rising share prices on the Shanghai and Hong Kong stock exchanges,
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Chinese companies accounted for three of the ten largest companies in the world by market value (see Figure 46), and by the end of October that figure had risen to five out of ten. Citic Securities, the biggest publicly traded brokerage in China, trailed only Goldman Sachs, Morgan Stanley and Merrill Lynch in market value among securities firms, while Air China was the world’s biggest airline by market value, having overtaken Singapore Airlines and Lufthansa.
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Of course it may transpire, as happened with the value of Japanese companies in the asset bubble of the late eighties, that these figures prove to be considerably inflated, but nonetheless they are probably a rough indication of likely longer-term trends.

The potential volume of Chinese overseas investment, as China’s capital account is steadily opened and the movement of capital liberalized, is huge, especially given the level of China’s savings. In 2007 China had $4,800 billion in household and corporate savings, equivalent to about 160 per cent of its GDP. On the assumption that savings grow at 10 per cent per annum, China will have in the region of $17,700 billion in savings by 2020, by which time China should have an open capital account. If just 5 per cent of savings leaves the country in 2020, that would equal $885 billion in outward investments. If outflows reach 10 per cent of savings, $1,700 billion would go abroad.
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To provide some kind of perspective, in 2001 US invisible exports totalled $451.5 billion. At the time of writing, Chinese overseas investment is still, in historical terms, in its infancy, but it is growing extremely rapidly: China’s overseas investment reached over $50 billion in 2008, with an annual average growth rate of 60 per cent between 2001 and 2006.
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A hint of what the future might hold was provided by the investments made by Chinese banks in Western financial institutions, which, in late 2007, found themselves seriously short of capital as a result of the credit squeeze which began in August of that year. By the end of 2007 Chinese financial institutions owned 20 per cent of Standard Bank, 9.9 per cent of Morgan Stanley, 10 per cent of Blackstone, and 2.6 per cent of Barclays.
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This, however, proved to be the high-water mark, as the Chinese government, increasingly aware of the depth of the American financial crisis, advised its banks to desist from becoming involved in rescue packages for beleaguered American and European banks.