Soft Power Moves Abroad

Jiang is putting the pieces into place to solidify not only his legacy, but the ideas of Old Deng and the position of his protégé, Hu Jintao. The 10th National People’s Congress this month was a showcase for the New Generation of leaders and Jiang’s Three Represents Theory. Lawyers and accountants sit in the Chinese People’s Political Consultative Congress, a hand-picked supporter rules over it and one can expect the power, scope and influence of a traditionally useless body of people to expand as political and economic reforms pick up pace – within the parameters set by the Communist Party of course, as both Li Peng and the new CPPCC chairman, Jia Qinglin made sure to mention.

The third stage of China’s transition from Agrarian Behemoth to Capitalist (with Chinese characteristics) Behemoth is concentrating on the rule of law over politics, the development of the hinterlands and the crushing of the state bureaucracy in time with WTO.

This may come to you as no surprise, but the talk of the last 10 years is now just becoming reality in China. Cowboy economics created the coastal jewels and they are slowly becoming orderly world-class cities capable of providing every comfort for the foreign investor and the native citizen – but the rest of China has sat back and watched this process for 15 years.

Chinese have mixed feelings about the possible success of the New Generation, but the government is now going into high-gear to attend to the problems of the rest of the nation, for, if the west remains undeveloped, if the peasants remain downtrodden and the bureaucracy remains entrenched, Old Deng’s dream will go up in the flames of revolution.

Killing Inefficiency

The ultimate destruction of the Chinese planned economy will find its Gettysburg in the oil industry. The Iraq crisis has already resulted in the raising of airline prices by 17% – Chengdu to Chongqing is up to 290 RMB from 240 RMB two months ago – and the number will rise with every $10 increase in barrel prices. The Chinese, dangerously dependent on oil imports, are acting to demolish the individual "pipelines" of the railway, transportation, airway, forestry etc. industries and create a group of oil product suppliers independent of industry and government. This will present the domestic market – dominated by SinoPec and PetroChina – with more competition.

The barter system currently in place will also be abolished. The two giants will then be forced to enter the global oil market and begin streamlining themselves of all those useless workers, offices, forms, procedures etc. in order to compete with the foreign companies that will soon enter the Chinese market.

Taming and Promoting

In Chongqing, a very hive of corruption and gangsterism, a new vice mayor from Shanghai, Huang Qi Feng, is preparing the city and himself for his eventual ascension in two years time to the position of mayor. The city is the low-brow, blood-sweat-tears beast of burden for the richer more cultured capital of Sichuan to the west, Chengdu. The Chinese have tried often and hard to get foreigners to put their business and consulates in the city, but after dealing with impossibly corrupt officials and the dirty crowded sprawl, most have elected to place their operations to the west. Chongqing explodes with industry and construction (a gangsters paradise) and now Mr. Huang is stepping in to contain the explosions, evaluate all projects and create a Shenzhen thousands of miles inland.

Jia Qinglin, the new chairman of the CPPCC, made a point of mentioning the plight of the peasants and the central government’s goal of bringing the situation up to acceptable standards. What this translates into is the central government peering from east to west and raising its foot to stomp out the local snakes who have been lining their pockets for the last ten years while the east was being built up. The Three Represents is a move by Jiang to co-opt the locals and businessmen – but now the New Generation of leaders are looking to do much more than co-opt.

Millions and millions of RMB are being poured into the various investment parks/zones around Chengdu and big players such as auto-parts manufacturer Delfi are considering moving entire operations – thousands of jobs, millions of dollars – to Chengdu. The municipal Ministry of Propaganda recently held an "Identity Round-Table" with researchers from Beijing’s Academy of Social Sciences, representatives from the Sichuan–American Chamber of Commerce and the Netherlands Business Support Office, the president of the Chengdu Exhibition Center and various CEOS and representatives from foreign-owned companies in the area to discuss what kind of an image Chengdu has abroad and how that image can be improved. The city has a long way to go to understand the nuances of PR and self-promotion, especially since the construction crews have been turned loose for the past 5 years, but the presence of the Beijing researchers and foreign/foreign-affiliated businessmen points to a real effort – supported and most likely driven by the center.

These two cities are the crux of China’s development project. Bringing the coastal cities into the global market was easy compared to the job ahead of them: Taming Chongqing, Promoting Chengdu.

If the central government can manage to "kill the (corrupt) chickens, show the (really corrupt) monkeys" in Chongqing and make Chengdu a globally-recognized city of opportunity, then China’s growth may be ensured for the next few years. Expect executions and serious propaganda.

‘A Loved Ruler Needs No Walls’

Expect none of the sort on the international forum. China’s position concerning the Korean Peninsula shows not only a desire to facilitate peace, but to do so at the expense of the US. China could step in and call for multi-lateralism – South Korea, Japan and Russia would follow, even if pretending not to – but this would relieve the pressure off of the United States and ruin the chance of the US either losing face or starting a war.

A war on the peninsula is so unthinkable to the parties involved that the US, without the help of the surrounding countries, will be forced to confront North Korea in the same role, if not the same posture, as it is confronting Iraq. Not only will this take energy and brain-power away from the increasingly complicated Iraq issue, but it would leave the US no choice but to compromise – even if pretending not to.

Joseph Nye’s soft power-hard power theories are generally supported in China: the idea of culture winning over an enemy and "winning a battle before it is fought" is traceable throughout Chinese history. In previous columns I spoke about China’s trips to South America and general willingness to be the champion of the Third World vis a vis the First World powers – these are examples of soft power, whereas the US reliance on weapons and carrots is hard power at its most obvious.

Hard power practitioners have already lost influence, as is clear with the "defection" of France, Germany and "swing voters" across the globe. Soft power practitioners absorb and rule on.