by Pepe Escobar, posted with the author’s permission and widely cross-posted
The New Silk Roads, or BRI, as well as the integration efforts of BRICS+, the SCO and the EAEU will be on the forefront of Chinese policy.
Liu He studied economics at Renmin University in China and got a Master’s from Harvard. Since 2018, he’s one of China’s Vice Premiers – along with Han Zheng, Sun Chunlan, and Hu Chunhua. He’s a Director of the Central Financial and Economic Affairs Commission and heads the China Financial Stability and Development Committee. Anyone around the world who wants to know what will drive China’s economy in the Year of the Rabbit must pay attention to Liu He.
Davos 2023 has come and gone: an extended exercise in Demented Dystopia with peaks of paroxysm. At least a measure of reality was offered by Liu He’s address. A limited but competent analysis of what he said is infinitely more useful than torrents of barely disguised Sinophobic “research” vomited by U.S. Think Tankland.
Liu He pointed to some key numbers for the Chinese economy in 2022. Overall 3% growth may not be groundbreaking; but what matters is value-added for high-tech manufacturing and equipment manufacturing going up by 7.4% and 5.6% respectively. What this means is that Chinese industrial capacity continues to move up the value chain.
Trade, predictably, reigns supreme: the total value of imports and exports reached the equivalent of $6,215 trillion in 2022; that’s an increase of 7.7% over 2021.
Liu He also made it clear that improving the wealth of Chinese citizens remains a key priority, as enounced in the 2022 Party Congress: the number of middle class Chinese, by 2035, should jump from the current 400 million to an astonishing 900 million.
Liu He pointedly explained that everything about Chinese reforms revolves around the notion of establishing “a socialist market economy”. This translates as “let the market play a decisive role in resources allocation, let the government play a better role.” That has absolutely nothing to do with Beijing privileging a planned economy. As Liu He detailed, “we will deepen SOE [State-Owned Enterprises] reform, support the private sector, and promote fair competition, anti-monopoly and entrepreneurship.”
China is reaching the next level, economically: that translates as building, as fast as possible, an innovation-driven commercial base. Specific targets include finance, tech, and greater productivity in industry, as in applying more robotics.
On the fin-tech front, a resurgent Hong Kong is bound to play an extremely important role starting by 2024 – most of it in consequence of several Wealth Management Connect mechanisms.
Enter, or re-enter the key role of the Guangdong-Hong Kong-Macao Greater Bay Area – one the key development nodes of 21st century China.
What is known as the Greater Bay Area’s Wealth Management Connect is a set up that allows wealthy investors from the nine mainland cities that compose the area to invest in yuan-denominated financial products issued by banks in Hong Kong and Macao – and vice-versa. What this means in practice is opening up mainland China’s financial markets even further.
So expect a new Hong Kong boom by 2025. All those dejected by the collective West’s morass, start making plans.
Dual circulation hits Eurasia
As expected, Liu He also referred to the key Beijing strategy for this decade: “A new development paradigm with domestic circulation as the mainstay and domestic and international circulations reinforcing each other.”
The dual-circulation strategy reflects the Beijing leadership’s emphasis on simultaneously boosting China’s self-reliance and its vast export market footprint. Virtually every government policy is about dual circulation. When Liu He talks about “spurring of China’s domestic demand” he’s sending a direct message to global exporters – Eastern and Western – focusing on this ever-growing, gigantic mass of Chinese middle class consumers.
On the geopolitical and geoeconomic Big Picture, Liu He was diplomatically circumspect. He just let it filter that “we believe that an equitable international economic order must be preserved by all.”
Translation: the New Silk Roads, or BRI, as well as the integration efforts of BRICS+, the SCO and the EAEU will be on the forefront of Chinese policy.
And that brings us to what should become one of the key stories of the Year of the Rabbit: the renewed drive along the New Silk Roads.
Few better than the Chinese, historically, understand that from Samarkand to Venice, from Bukhara to Guangzhou, from Palmyra to Alexandria, from the Karakoram to the Hindu Kush, from deserts that used to engulf caravans to gardens of secluded harems, a formidable pull of economic, political, cultural and religious factors not only linked the extremities of Eurasia – from the Mediterranean to China – but determine and will continue to determine its centuries-old history.
The Ancient Silk Roads were not only about silk but also spices, porcelain, precious tones, fur, gold, tea, glass, slaves, concubines, war, knowledge, plagues – and that’s how they turned into the symbol of Eurasia-wide “people to people exchanges”, as Xi Jinping and the Beijing leadership extol it today.
These processes involve archeology, economics, history, musicology, compared mythology; so, keeping up with the past, the New Silk Roads also mean all manner of exchanges between East and West. The perpetual history of non-stop trade, in this case, is only the material base, a pretext.
Before silk there was lapis lazuli, copper, incense. Even if China may have only opened itself to the outside world on the 2nd century B.C. – because of silk – Chinese tradition, in the oldest Chinese novel, The Chronicle of the Son of Heaven Mu, tells the tale of Emperor Mu visiting the Queen of Sheba already in the 10th century B.C.
The exchanges between Europe and China may have started only in the 1st century B.C. The men who actually traversed the Eurasian immensities were actually few. It’s only in the year 98 that the Chinese ambassadorship of Gan Ying departs for Da Qin – that is, Rome. He never arrived.
In the year 166, the Antoninus Pius ambassadorship, allegedly sent by the Emperor himself, finally hits China; but in fact that’s just an adventurous merchant. For 13 centuries there was a huge exploratory void.
Despite the prodigious advances of Islam and the omnipresence of Muslim merchants since the 7th century, it’s only in the 13th century – at the time of the last Crusades and the Mongol conquest – that Europeans picked up again the road towards the East. And then, on the 15th century, the Ming emperors succeeding the Mongols totally closed China to the outside world.
It’s only due to a certain extent to the Jesuits in the 16th century that a meeting finally happened – 17 centuries too late: Europe finally started to acquire some knowledge of China, even as it dreamed about it over and over again, since chic Roman patricians were enveloped in transparent silk robes.
It’s only around 1600 that Europeans seem to have become aware that Northern China and Southern China are on the same continent. So we may conclude that China really became known in the West only after the “discovery” of the Americas.
Two worlds ignored each other for so long – and still, all along the watchtowers in the middle of the steppes, trade kept moving from one side of Eurasia to another.
Now it’s time for another historical push – even as a discombobulated Europe is kept hostage by a cabal of imperial Straussian neo-cons and neoliberal-cons. Duisburg, in the Rhur valley, the world’s largest inland port, after all remains the key Iron Silk Road hub across BRI, linked by endless railways to Chongqing in China. Wake up, Young German: your future is in the East.
“Wake up, Young German: your future is in the East.”
No chance. Young Germans are preoccupied with A Bright Green Net Zero post-industrial, de-populated dystopia. Most are down with lighting a fuse in Ukraine for WWIII.
It will take a decade or two of “freezing in the dark, and jobless” to wake up from the Green nightmare.
“Wake up, Young German: the US is in your past.”
We are all the better for this slumber.
If I recall the mode for German revival couple of years back to show it’s capability by renewed engagement in middle East independent of other western countries.
It’s the only way the diseased European soul knows on how to compete with other Europeans. Ie throw their weight around middle East and kill a few hundred thousand people and destroy couple of countries to gain standing among the Europeans
No, I’m very happy with present German trajectory. We in rest of the world can live in peace and by the time Russia is done with europe it will take it’s historical place in the world ie a civilizational back water.
So you’re happy that the Anglo-Zionist ploy to sever Europe from Russia has worked/is working? I thought Russia’s goal was to break the cycle of USA/UK imperialism, not feed into it!!
Wonderful summary !
Now, we need the ASEAN to fully commit to the multipolar, financial order. Their real economy is already surpassing the EU at this point.
After the successful SMO in Ukraine, I expect that China will seize Taiwan before it becomes the next Ukraine mistake for the Chinese. Acquiring Taiwan will allow China to gain unparalleled naval dominance to help Russia and India to deter the West. Three of them can destroy the West through nuclear weapons right now without the West having any chance to retaliate. This is not the outcome that I desire but it’s very possible now as the US military-industrial complex has failed to maintain its nuclear arsenal due to the de-industrialization/privatization of its military assets.
The classless, socialist world order will hopefully emerge around after 2050s.
@ FullThrottleCommunist on January 26, 2023 · at 8:33 pm EST/EDT
“…Three of them can destroy the West through nuclear weapons right now without the West having any chance to retaliate…The classless, socialist world order will hopefully emerge around after 2050s.”
Sure, with the few surviving zombies.
Your “full throttle communism” looks more like neo-con zio-nazi-fascism to me.
Communism, IMHO, is about building a new paradigm, not about the extermination of the planet.
That’s the work of the nazis, the fascists, the zionists, the oppressors, the lumpen ruling elites.
According to Pepe, the vision of the Greater Eurasia Partnership is different.
“…We’re back to what the world looked like in 1914, or before 1939, only in a limited sense. There’s a plethora of nations struggling to expand their influence, but all of them are betting on multipolarity, or “peaceful modernization”, as Xi Jinping coined it, and not Forever Wars: China, Russia, India, Iran, Indonesia and others.
“Peaceful modernization” is the antidote to the “Forever Wars” of the Collective West, a prerequisite for the building of a multipolar world.
PS: You can read more about it here, https://thesaker.is/bye-bye-1991-2022/
Your rhetorics are not different from the monarchists and feudalists in the 1800s who kept saying these things.
“French Revolution’s failures proved that democracy is not possible, so we still need kings!”
“Revolutions of 1848 failed to install liberal democracy, so monarchy is supreme!”
If the old revolutionaries of the past gave up on liberal democracy or capitalism, then you and I are probably worshipping monarchs and acting as serfs for the rest of our life. Socialism is just a natural process after capitalism. During the evolutionary process, people will face a lot of anticipated obstacles but mistakes and mistakes will collide with each other to ultimately form a harmonious solution. French Revolution, the Haiti Revolution, and many liberal democratic revolutions of the past failed to upset the feudalism and monarchy order. The revolutionaries each learned from mistakes and continually improved. Let’s not forget that liberal democrats have conflicts against each other, so they fought. Like American Civil War or WW2.
The fact is that China and Russia are on the right side of history for modernizing and realizing their vision of socialism. Marxism-Leninism.
The West’s neoliberalism has been always the Trotskyism that Stalin despised. It ruined the world in the last 50 years but its global experiment has come to an end as the French Revolution of the old days. It’s just time for the new global vision of socialism being implemented in place under China, Russia, and others.
Unfortunately, what you say will remain a pipe dream. China is not the New Jerusalem.
The fact of the matter is China is a regional bully that has disputes with all its smaller neighbors – Philippines, India, Japan, Malaysia, Brunei, Vietnam, Taiwan etc. China claims the land and seas of its neighbors and has an evil eye on them. In Africa, China is following the same imperialistic approach of the West – a grab for resources.
The Chinese ‘win-win’ narrative is also a fake. It applies only as long as China is the beneficiary.
China is also no friend of Russia.
The Chinese are interested in getting money from the West. They will dump Russia at the first sign of economic loss if that becomes the case.
And I hope my post will not be deleted because it does not fit your narrative.
Can’t comment on what China is but it’s border disputes with India are inherited from the British. British as Europeans were often did simply drew lines on the map claiming territory without ever setting foot on it.
Most of these areas are remote with little or no population.
Indian politics inherited from British makes it a unnecessary test of patriotism to claim territories which were never ruled by any Indian kingdom . if any people exist in some of places under Chinese control none of the people have any particular affinity with India.
The high Himalayan have acted as a barrier between India and China. We have neither a positive not negative border history with China except after India was made independent.
So essentially this issue can be easily resolved by China and India in similar manner as China and Russia resolved their differences on border couple of decades back.
Obrigado, Pepe, as always.
“…Despite the prodigious advances of Islam and the omnipresence of Muslim merchants since the 7th century, it’s only in the 13th century – at the time of the last Crusades and the Mongol conquest – that Europeans picked up again the road towards the East. And then, on the 15th century, the Ming emperors succeeding the Mongols totally closed China to the outside world…”
Before shutting the door, the Ming dynasty launched what could be considered the precursor to the current BRI, in the person of Admiral Zheng He (no relation to Liu He, AFAIK :-), who made seven voyages throughout Asia, Africa and the Arab world, being the first Chinese setting foot in many of those places, establishing trade and relations with multiple countries.
Here is a map of his voyages, all on the first half of the 1400s.
A Muslim eunuch, he commanded a fleet of almost 400 junks and 30,000 men, his exploits contributed to the knowledge of navigation, ship building, and opened new frontiers for China. He can be considered the pioner to China’s modern links to Asia, Africa, and beyond.
I was surprised you missed him in your historical narrative, as Zheng He was a true pioneer of “international circulations.”
PS: Sorry about the dinosaurs, any time one thinks they were extinguished, they resurface in unexpected forms and shapes.
Read and re-read all your articles on China. I have been greatly interested in China, past and present, for many years. The progress of the new Silk Road is fascinating. I hope it can extend into Latin America. I have read (on twitter of all places) that China is making great strides in it’s military – and that the younger generation are eager to serve and protect the Chinese people. China needs to protect itself, and smaller countries under it’s umbrella of accomplishments, from the hegemon. I wish it were not so. I am convinced the friendship (alliance) between China and Russia is rock-solid.
Thank you for all your journalism. You are sharing so much research for our benefit. God bless and keep Lula da Silva, and send him the courage and the allies needed for Brazil to lead Latin America forward into the multipolar world and sovereignty.
I don’t usually comment; I am too busy reading. I hope The Saker can stay active for longer. I pray we can avoid nuclear war. I should have worked on moving to Latin America years ago.