China has long used Western capital to challenge the might of the West. Now it is moving forcefully, making demands of companies and countries, expanding its influence.
In 2015, the most overlooked communist revolution in history took place. That was the year that communists seized power in the Himalayan nation of Nepal via ballot-box revolution. For a decade, from 1996 to 2006, the Maoist Communist Party of Nepal, with the not-so-covert backing of the Chinese, waged a bitter civil war against the Nepalese government, seeking to overthrow the monarchy and replace it with a People’s Republic. The insurgency included a number of attacks on foreign trekkers in the popular mountaineering and hiking destination.
In 2006, the communists laid down their arms in exchange for a peace treaty granting them the right to participate in Nepalese politics. At the time, it was estimated that the communists controlled 80 percent of rural Nepal. And in 2015, after nine years of electoral agitation, the Nepalese Communists, led by longtime revolutionary leader Khadga Prasad Sharma Oli, finally achieved their political goal, sweeping into power in that year’s popular election.
The election sent shock waves across the region, where Nepal has long been aligned with pro-Western India and opposed to the Communist Chinese behemoth on its northern border. Given China’s longtime support of Nepal’s communists, it was expected that Nepal might turn northward in search of new alliances.
Now, the worst fears of India and the West are coming to pass. In 2018, for the first time, the Nepalese government refused to participate in annual South Asian military exercises aimed at combating terrorism in the region, and Nepal’s top general declined to attend a gathering of other military leaders from the region at the same time. But Nepal announced it will soon be participating in joint military exercises with China.
Nor have the Chinese failed to shower rewards on their newfound friend and ally. In June of 2018, the Chinese government announced a deal with Nepal that will see the construction of a new railway link extending from Chinese Tibet all the way to the Nepalese capital of Kathmandu. The project is part of China’s ambitious new “Belt and Road” project to construct infrastructure all across Eurasia, and even overseas, ostensibly to better link China, with its vast markets, to the rest of the world. The program being pursued in Nepal has become the model for how Communist China is now methodically advancing its interests all over the world. In effect, the Chinese government offers to build (or rebuild) infrastructure in a country, in exchange for greater access to that country’s markets — as well as political allegiance, if not outright alliance. A number of countries, such as Turkey and Sri Lanka, are taking advantage of this initiative, and many others, strapped for cash and weary of what they perceive to be onerous and compromising conditions imposed by Western creditors and providers of foreign aid, are seriously considering China’s blandishments.
A scan of the socio-political scene involving China reveals that the country aims to dominate the globe — as a communist power. At home, China is not only presently retrenching socially — cracking down on and even disappearing anyone who appears to be a dissident — but outwardly it is using the technology and wealth fed to it by companies clinging to the futile hope that China will open its markets to them to build a sphere of world control. Its methods use the carrot-and-stick approach: When bribes don’t work, subversion and savagery are employed.
In the case of Sri Lanka, the government of that debt-ridden country was recently compelled to sign over most of the rights to a major southern port, Hambantota, to the Chinese on a 99-year lease in exchange for a substantial amount of debt forgiveness. Hambantota’s location, right on the major east-west shipping lane from the Suez Canal to Singapore and the Far East, via Sri Lanka’s south coast, gives China unprecedented access to one of the world’s major commercial sea routes — as well as a potential military vantage point over the entire Indian Ocean. After a popular uproar in Sri Lanka over the move, the Chinese government shelled out $300 million in grant money for the Sri Lankan government to use any way it pleased — underscoring how important China’s hold on Sri Lanka has become for its strategic interests. And China, flush with cash, is proving more willing than Western countries such as the United States to dole out supposedly no-strings-attached financial aid, such as its recent gift to Sri Lanka, causing many countries to set aside reservations over China’s true motives and begin questioning their alignment with the West.
The “Belt and Road” project (literally “One Belt, One Road” in Chinese), of which China’s Sri Lanka activities are only a small part, was launched by Chinese President and General Secretary of the Communist Party Xi Jinping in 2013. According to the Chinese government, it is nothing less than a modern re-creation of the ancient land and sea trading routes that linked China with the rest of the world, a sort of 21st-century Silk Road.
In point of fact, President Xi’s Belt and Road initiative has coincided with a very significant Chinese military buildup and with a dramatic rise in Chinese Communist subversion abroad, in places as far-flung as South Africa, where the ruling African National Congress is now transparently allied with (and receiving training from) the Chinese Communists. All of these indicators point unmistakably to a China that has decided to take the place of the defunct Soviet Union as the world’s chief sponsor and military backer of the global communist movement.
For nations caught in the Chinese Communist net, the effects are increasingly worrisome. Nepal’s communists have recently passed legislation outlawing Christian missionary activity in Nepal, making charitable activity by any Christian-affiliated NGO illegal, and even curtailing the right of Nepalese to criticize the government. This is socialist incrementalism at its best, backed by the world’s most patient and calculating totalitarian regime.
In China, meanwhile, the Communist Party is once again consolidating power at home as it attempts to undo several decades of market reforms that began under premier Deng Xiaoping. Following Deng’s lead, the nation once so cowed by communist tyranny that even modes of dress were dictated by the government (a dictatorial excess even Stalin’s Soviet Union did not approach) shed the drab party-mandated clothing for Western fashion, developed a taste for Western music and media, and even began traveling more or less freely abroad, including to the United States and other Western nations.
But beginning in 2012, when Xi Jinping came to power, the Communist Party began a slow but steady movement back toward its totalitarian past. Crackdowns, arrests, and imprisonments soared in the name of a new ongoing “anti-corruption” campaign targeting everything from street vendors to drug users to critics of the government. In July China’s most prominent film actress, Fan Bingbing, vanished for several months, leaving her millions of fans worldwide to speculate about her fate. Fan was the world’s fifth highest-paid actress in 2016, according to a Forbes ranking, and was a regular at film festivals across the world, from Cannes to Busan. The multitalented actress speaks fluent English and has also appeared in a number of Hollywood movies.
As it turned out, she was detained for several months on charges of tax evasion. Other public figures have similarly fallen from the graces of the Communist Party in recent years. Not only that, the Chinese government has shown a willingness to arbitrarily arrest foreigners for political leverage, as evidenced by the recent jailing of several former Canadian diplomats in obvious retaliation for Canada’s detention of the CFO of Huawei, one of China’s most powerful corporations, on charges of giving aid to Iran in violation of international sanctions.
The disappearance of popular figures who have fallen into party disfavor and politically motivated attacks on foreign citizens were once routine in Maoist China, Stalinist Russia, and other totalitarian regimes, and continue to be the norm in the likes of North Korea and Iran. And for years, it appeared as though China had moved beyond such episodes.
But worse may be soon in coming as Xi continues to consolidate power. This year, he removed the two-term limit on the Chinese president and vice-president, making himself in effect leader for life, if he chooses. His anti-corruption campaign has morphed into an ambitious drive to transform China into a panopticon state. A network of new cameras watches Chinese citizens everywhere they walk or drive, while government software compiles data on tens of millions of them, assigning them a number similar to a credit score — except that these scores reflect a citizen’s loyalty to the party, obedience to the state, and general sense of civic duty.
Points are taken off for jaywalking, late bill payments, criticizing the government, buying too much alcohol, and many other activities deemed deleterious by the Communist Party. If their score drops too low, hapless Chinese citizens will be denied air and rail travel, refused access to social networks, and kept from finding gainful employ. Still under consideration are additional “social infractions” such as playing too many video games, spending money wastefully, or making too many posts on social media.
This article appears in the February 18, 2019, issue of The New American. To download the issue and continue reading this story, or to subscribe, click here.
Exploiting 21st-century technology, the system combines data culled from 200 million surveillance cameras with financial records, Internet browsing history, and medical records to assemble digital dossiers on tens of millions of Chinese citizens. By 2020, the Chinese government intends to have all of China’s 1.4 billion people under 24/7 surveillance. If realized, China in the 2020s will resemble — more than any other government in modern history — the Orwellian nightmare of 1984, where the Party has become not only all-powerful but — thanks to all-encompassing surveillance technologies — omniscient as well. Because Communist China has managed to endure into the 21st century, it is able to exploit technologies for mass surveillance and control that the defunct Soviet Union could only dream of.
Not only that, all of China’s major corporations, such as Huawei and Alibaba, are allowed to operate only on condition that they use their resources to enhance the government’s surveillance powers at home and abroad. Huawei, a telecommunications manufacturer, provides the Chinese government with intelligence gleaned from its popular cellphones and computers, to a degree that puts the recently revealed excesses of Facebook to shame. Jack Ma, the billionaire founder of Alibaba and a sort of Chinese answer to Bill Gates, whose success story every Chinese schoolboy is encouraged to emulate, was recently outed as a member of the Communist Party. The dreary reality in China is that no Chinese entrepreneur or corporation is permitted to succeed unless it also gives the Communist Party whatever support it can.
Nevertheless, many outside China do not view China as the West once regarded the Soviet “Evil Empire,” because 21st-century China differs from the 20th-century Soviet Union in its illusion of prosperity — the bewitching array of modern technologies, including modern highways and railroads, gleaming skyscrapers, and a society wedded to the Internet like no other. The Chinese conduct most of their business online, thanks to the all-encompassing social networking-cum-purchasing app called WeChat (also used by the government to spy on Chinese citizens) and a host of other online services such as Alibaba and Didi. The latter, a taxi-calling app, is absolutely indispensable to get around in China; taxis do not crowd the city streets as they do in non-communist countries. Instead, a prospective passenger uses Didi to summon a taxi, transforming what might be a curbside wait of a half-hour or more for a random taxi to pass into a two or three-minute interval. In this way, Didi manages to disguise somewhat the shortage of taxis that would otherwise make city travel just another hassle typical of a centrally planned economy. Taobao, China’s answer to Amazon and owned by Alibaba, masks the fact that, outside of large Western stores in big cities, the Chinese economy is still not able to produce enough domestically to fill the shelves of big-box stores. Instead, Chinese order most of their stuff besides basic groceries online, and items are typically shipped within a few business days — from wherever in China they happen to be available. Thus someone living in Shanghai might be unable to find a particular item anywhere locally, despite the city’s enormous size. But a store in Guangzhou, far to the south, might have the item in stock, allowing the Shanghai resident to purchase it remotely via Taobao.
How has China’s communist government managed to lift China out of its impoverished, agrarian past? Simply put, by bringing in foreign capital and giving those corporations a lot of latitude to manufacture and sell, both for export and for domestic consumption. But in return, the Communist Party is demanding ever-increasing involvement in the affairs of foreign corporations in China, especially those partnered with a domestic company. And Chinese law stipulates that foreign companies in most sectors must be partnered with a domestic firm (a “partnership” wherein the Chinese firm must control at least 51 percent) — an imposition that many foreign companies are increasingly coming to view as a cynical ploy whereby Chinese firms avail themselves of Western intellectual property, only to kick Westerners out once their usefulness has been exhausted.
Indeed, there are signs that Western firms are already wearing out their welcome in China, as the Communist Party concludes that further capitalist presence in its country will hamper the return to ideological purity being undertaken by the Xi administration. The Communist Party is ramping up pressure on Western firms, cracking down on corporate use of VPNs (software that allows computers to circumvent the censorship of China’s Great Firewall), demanding greater deference to Communist Party officials, and even arbitrarily forcing companies to relocate from expensive facilities that they had built with their own money because the government has decided to use the land and facilities for some other purpose. One American businessman working in China told this author that his corporate employer was recently dismayed to find out that the government had decided to relocate them to a much more remote area because it had decided to build residential buildings on the original site. His firm has thus been ousted without compensation from a site that cost hundreds of millions to build.
The Washington Post recently reported on an instance of Communist Party interference in corporate Internet usage, a story that is becoming drearily typical of the times:
To regain full access to the Internet, one American company was asked to sign a “solemn commitment” — that it would obey the Chinese Communist Party’s “seven bottom lines,” do nothing to undermine the socialist system, public order or social morality, and wouldn’t use the Internet to violate the interests of the state…. The agreement, made in Shanghai last November, is typical of the hoops some foreign companies are having to jump through to maintain access to the Web, and to continue doing business in a country where politics is back on top of the agenda.
That has led many American companies to take a “much more cautious approach” to regulating who within their organization uses VPN software, said Jake Parker, vice president of China operations at the U.S.-China Business Council in Beijing….
A more fundamental anxiety is that the Communist Party will ultimately demand to see everything that flows in and out of the country over the Internet, under China’s new Cybersecurity Law, which went into effect in June.
“How safe will [intellectual property] and trade secrets be? Will servers have to be stored here? Will companies have to hand over encryption codes to Chinese authorities?” asked a Beijing-based diplomat, who spoke on the condition of anonymity to discuss sensitive matters.
“Could perhaps entire industry sectors become off limits for foreigners for security reasons? It’s not clear whether Chinese authorities are aware of possible collateral damage to businesses.”
Despite all of these growing concerns, Western corporations continue to pour capital into China. As another American businessman, who has lived and done business in China for more than a decade, told this writer, businesses are reluctant to haul up stakes and leave because of the immense potential presented by the Chinese market. They believe that, if they abandon China, competitors will simply take their place. For this reason, many of them are willing to perform all sorts of contortions and obeisances to ingratiate themselves with increasingly autocratic Chinese authorities. In January of 2018, for example, the Chinese government shut down Marriott Corporation’s Chinese website after a Marriott Survey online implied that Taiwan, Tibet, Hong Kong, and Macau are independent from China. In response, Marriott issued repeated apologies clarifying that they did not support “separatism” and they fully respected “the sovereignty and territorial integrity of China.” Even more recently, hundreds of employees at Google were dismayed to learn that, despite Google’s public refusal to accede to China’s demands that they self-censor in exchange for being allowed to operate in China, Google has secretly been working on a search engine for China that would, in fact, censor access to the Internet along Communist Party lines.
What’s more, China’s willingness to let in outside capital is matched by its refusal to allow capital out, in any form. Foreign residents in China quickly discover that it is virtually impossible to transfer money abroad via the usual methods used elsewhere in the modern world. Money wires, drafts, Moneygrams, and other methods of currency transfer are strictly monitored and controlled, and often rejected by government authorities for arbitrary reasons. Access to foreign Internet marketing sites such as Amazon.com and social networks such as Facebook is strictly prohibited, and the VPNs that foreigners (and some Chinese citizens) use to circumvent China’s controls are under constant attack by the government.
None of this is truly novel. China has been keeping its doors closed to the outside world, prohibiting exports and capital outflow, for centuries. Early Chinese efforts to ensure that silkworms were never taken out of the country are the stuff of legend — as is the deception employed by several foreign merchants in finally smuggling several of the insects out of China, inside a hollowed-out cane. Culturally China has always seen itself as unique and apart from the rest of the world, and the advent of modern revolutionary communism in many respects has provided a latter-day framework for continuing to keep China unified and walled off from the rest of the world.
There can be no denying that, under communist leadership, China has morphed into an economic and military superpower no longer prostrate to ambitious foreign powers. This achievement, at least, is regarded by many Chinese as proof positive that the communists will ensure that China never endures another “Century of Humiliation” and will maintain its rightful place among the world’s great powers. Acknowledgement of this has prompted many Chinese to conclude that they prefer the devil they know. Hundreds of millions of Chinese now live in fear of “Xi Dada” (“Papa Xi”), but they are willing to endure the continuing curtailment of their freedoms as long as Xi’s China remains strong. It is certainly a testament to the work ethic and resourcefulness of the Chinese that they have been able to achieve so much in the face of such daunting obstacles.
By every evidence, the old inward-looking Middle Kingdom is gone, replaced by an increasingly assertive, militaristic regime bent on full-spectrum global dominance. From several decades of pragmatic market reforms that led many outsiders to anticipate the death of Maoism, China has done a hard about-face and is being herded back toward a sort of high-tech Cultural Revolution. For now, universities, schools, foreign study, and education in general remain prized assets in China, and the government has shown little inclination — yet — to shutter institutions of learning, as it did in Mao’s time. Unlike 50 years ago, tens of millions of Chinese are now well educated, wealthy, and accomplished. They travel the world on package tours, they learn English and other foreign languages, and they produce leaders in science, technology, and the arts.
But the communist government is proving itself extremely adroit at diverting the vast talents and resources of its citizens to serve its own purposes. Even Chinese students and businessmen overseas have been enlisted in China’s spy networks. And despite the Chinese Communists’ toleration of a modicum of free enterprise and international trade, it is the communist ideology that retains their highest allegiance.
A lingering mystery is how China has managed to attain such levels of prosperity under socialist conditions. There are several contributing factors. First, the modern Chinese Communists operate in many ways more like the Nazis and Fascists of Germany and Italy than the doctrinaire communists of Stalin and Mao. The ChiComs are only too happy to encourage capital formation — as long as it serves state interests. Many of the goals of Maoism — including the destruction of industrial society in the name of “agrarian reform” — have been discarded, and replaced with a Nazi-esque fixation on state-sponsored industrialization.
Another factor driving China’s remarkable economic growth is China’s avoidance of debt and reliance on savings. The market distortions associated with the business cycle are predicated on the twin practices of deficit spending and inflation, which the Chinese have sought to avoid. Moreover, keeping themselves mostly sealed off from the global banking system has meant far fewer temptations to partake of the poisoned fruit of foreign credit. As a result, China is a creditor and not a debtor regime — which also gives its communist leadership much greater leeway in commissioning building projects with very low occupancy or operating technological wonders (such as Shanghai’s celebrated Maglev, the world’s fastest train) that operate deep in the red year after year. Not being burdened by Western levels of debt means that China has been able to build the world’s largest and best high-speed railway system in little over a decade, allowing China’s millions to travel easily from one end of that gigantic country to another. This, while debt-strapped California, in combination with an equally beholden federal government, has barely managed to lay a few miles of track for the Golden State’s long-sought Los Angeles to San Francisco high-speed train.
A third factor in China’s success is undoubtedly the Chinese themselves. Known far and wide as the world’s most entrepreneurial people, the Chinese possess a work ethic second to none. In most southeast Asian countries, it is the “overseas Chinese” whose business acumen powers the economy, from the Philippines to Malaysia. In enclaves where the Chinese themselves run the show — Hong Kong, Taiwan, and Singapore — the record speaks for itself. In Communist China, too, the passion for business surpasses all else, except for the ethnic pride and sense of national destiny that characterize the Han Chinese.
A fourth factor is the impulse that the Chinese of China share with their kin in Taiwan, Singapore, and Hong Kong: a strong will to preserve traditional family values and civic virtues. The Chinese Communist Party has attracted international condemnation for its long-held (though recently relaxed) “one family, one child” policy, but the Chinese rejection of what are widely viewed in China as decadent Western practices such as premarital sex and drug abuse has generally gone unremarked. As in Singapore, Taiwan, and elsewhere, drug trafficking and use is strictly prohibited and punishments severe. Moreover, sexual promiscuity and pregnancy out of wedlock are almost unknown among China’s teens. At least in part as a consequence of this, crime rates, even in China’s largest cities, are extremely low and Chinese families — in stark contrast to those in the West — are generally well maintained. And this is not mere hearsay on the part of this author, who has worked with Chinese teens and observed among them standards of moral conduct that would not have been out of place in America 50 years ago, but today seem quaint and innocent by comparison with their worldly Western counterparts.
From the perspective of the rest of the world, it is most assuredly not the productive and hard-working Chinese people who pose a threat; it is a communist regime ingeniously reinvented to flourish and subvert in a high-tech 21st-century environment. The communists of Beijing have proven exceptionally adroit at harnessing the considerable virtues of the Chinese people and the naïve, self-serving good will of foreign governments and corporations, in the service of long-sought communist world domination. And the Chinese, with their vast population, have ample incentive to seek, by subversion or conquest, Lebensraum abroad. Indeed, to the consternation of Russia, they are already migrating across their northeastern Manchurian frontier in large numbers to settle in sparsely populated eastern Siberia.
Whatever China’s inward-looking past may have meant, 21st-century China is now (as imperial Japan once did) morphing into an aggressive, expansionist power with eyes set not merely on local domination but on challenging the might of the West across the globe. With the complicity of allegiance-less foreign corporations willing to be exploited in this design, China bids fair to accomplish its aims unless the United States and other Western countries retrench, recognize the growing threat, and cease giving aid and comfort to the most powerful and dangerous communist regime the world has yet seen.
Photo credit: AP Images