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Letter from Shanghai

May 2013

  • Alexander Downer

There are around ten cities in the world you ought to see before you die.

One of them is Shanghai. It’s a fascinating monument to wealth creation between the late nineteenth century and today. On the one side of the river which carves its way through the centre of the metropolis is the Bund, an elegant collection of stone clad banking buildings and hotels built predominantly by the British in the first three or so decades of the last century. They are magnificent edifices in the extravagant late colonial style when grandeur and prestige could be bought for a farthing on the back of a coolie’s labour.

On the other side of the river is Pudong. If the Bund is redolent of European imperial capitalism, then Pudong is a symbol of the new, aggressive quasi-capitalist China, ambitious to be modern and technologically savvy. Huge skyscrapers spear the air while at ground level Western style coffee shops, restaurants and boutiques line the streetscape.

The whole city – with an estimated population as great as the population of Australis – is, in a word, astonishing.

Yet the further you are from China, the less you understand it. We owe it to ourselves to try to learn about this country which is now the world’s second largest economy and our biggest trading partner.

To understand diplomacy and international politics you need to understand two things: geography and history. It’s those two things which drive modern societies and help explain their security and economic policies. China isn’t like Burkina Faso: everyone knows where it is and roughly what it looks like. So it’s clear that a defining issue for China is its coastline. That’s its access to the outside world, not land borders. China is hemmed in by deserts and mountains. It’s cheaper and easier to trade by sea.

This is where history and geography come together. When the colonial powers came to China in the nineteenth century they did so to trade. They therefore approached by sea. Even the Russians, with their long common land border with China, seized coastal regions. The great coastal cities of Shanghai, Hong Kong, Canton (now Guangzhou) and others sprang up and generated huge wealth – for the imperialists.

So these days, not surprisingly, the wealth of China is still generated along the Eastern and Southern seaboards. China’s economic miracle over the last three decades has been driven by trade and the coastal cities have flourished.

This helps to explain a couple of things about Chinese security and social policy. For one, to prosper, China needs to keep its ports open. That means having the military capacity to defeat any adversary who may wish to blockade its ports or even occupy them. China has built quite an arsenal of missiles including ballistic missiles which it could use to keep the Americans a great distance from China’s shore.

And secondly, China needs to balance the natural economic growth of these coastal regions with the grinding poverty of the interior. China’s modern leaders know that above all, Mao’s revolution was bred in the interior, a seething bed of resentment against the plutocracy of the coast. So while on the one hand they’ve decided to deregulate the economy so the coastal regions can thrive, the government is investing heavily in inland cities and regions so that the fruits of the Chinese economic miracle are shared equitably. The regime in Beijing regards this as an existential issue.

All this makes pretty good sense if you are Chinese. But for some reason, plenty of outsiders see modern China as a threat. Well, remember the old aphorism: if you call someone your enemy, he will become your enemy. So before we conclude China is at least a putative enemy, we should ask why we would come to that conclusion.

Well, some will say it’s because it is a Communist country. The governing party is indeed the communist party but do we know, in the Chinese context, what this means? Strolling through the streets of highly capitalist Shanghai or driving along the freeways of Shenzhen past miles of private local and international factories it hard to reconcile that with Karl Marx’s gloomy and oppressive ideology. The truth is, China is run by an autocratic party but not a party which is communist in the sense the Soviet Union was during Stalin’s time.

Importantly, the Chinese Communist Party, unlike its old Soviet counterpart, is not trying to spread revolution. It isn’t trying to convert any country to its system of government.

Some may fear China will soon start invading its neighbours. Well, that’s a huge claim to make. China doesn’t have the history of colonial expansion of Japan and the European powers. It has enough land and enough people to look after without getting into that perilous game.

No, China is not a threat. Not if you understand it. So add Shanghai to your bucket list, jump on a plane and have a look. Then you’ll start to realise a lot of half-informed scaremongers are having you on about the “China threat”.




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