How China sees the World 6/17/13 Time Magazine: http://www.time ...

How China sees the World 6/17/13 Time Magazine:http://www.time.com/time/magazine/article/0,9171,2145062,00.htmlBy Hannah Beech; Art by Ai WeiWei Monday, June 17, 2013Liu Mingfu likes to think he is the oracle of a new era. A retired colonel with the ramrod bearing of acareer soldier, he has never been to the U.S. but is a self-proclaimed expert on Sino-Americanrelations: he lectured on the subject at the National Defense University in Beijing, the training groundfor the People's Liberation Army (PLA). Three years ago, Liu wrote a best-selling book called ChinaDream: Great Power Thinking and Strategic Positioning of China in the Post-American Age. In hishawkish tome, Liu explained that China needed a strong, martial leader and offered advice for hisresurgent nation: "When China is threatened, it has no choice but to use war to protect its right torise, to break through America's military containment."In March, Xi Jinping, the broad-shouldered son of a Communist Party revolutionary, completed apower transition that will see him guide China for the next decade. Liu is delighted. Since Xi'sascension--he assumed the leadership of the Chinese Communist Party in November and becamePresident three months ago--he has talked tough on territorial disputes and predicted that China willbecome the chief military power in the Asia-Pacific region by 2049. The 59-year-old leader, who ismeeting with U.S. President Barack Obama on June 7-8 in a rare two-day summit in California,warned that the PLA should be "prepared for war" and has toured a seemingly endless number ofdomestic military installations. Most tellingly, he has adopted "China Dream"--Liu's catchphrase--ashis motto, pledging that "we must achieve the great revival of the Chinese nation, and we must ensurethere is unity between a prosperous country and a strong military."Those words were delivered in December as Xi inspected a guided-missile destroyer that cruises theSouth China Sea, a waterway that China claims as mostly its own, much to the fury of other Asiannations. The new Chinese President's vigorous public persona contrasts with that of his blandpredecessor, Hu Jintao, who chose as his leadership slogans "peaceful development" and"harmonious society"--pleasant enough goals, perhaps, but hardly the proclamation of an emergingsuperpower. "Xi has used very tough language," says China scholar David Shambaugh, whose recentbook China Goes Global: The Partial Power examines the country's global footprint. "This is veryconcerning and illustrates a much harder type of nationalism than that of his predecessor Hu."For decades, China's outlook on how East met West was simple: a proud, ancient civilization wasbrought to its knees by foreign gunboats, British opium and Japanese wartime oppression. Whenever1

the People's Republic dealt with the world, it did so with a chip on its shoulder, and Xi's forerunnerslarded their speeches with accusatory references to "a century of humiliation" at foreign hands. TheWest was regarded as arrogant overlord, democratic foe and subversive instigator rolled into one.That sense of historic injustice festered even as China's growing economic power might have beenexpected to sweep away such insecurities. But the ascension of President Xi--he of the patrioticswagger, political pedigree and photogenic PLA-folksinger wife--heralds a new era of China'sinteraction with the international community. Instead of simply positioning China as a vanquished,aggrieved inferior, Xi and his China Dream envision a mighty nation reclaiming its rightful place inthe world, not just economically but politically and culturally too.To that end, the Xi-Obama confab, which comes at what the Chinese leader calls "a critical juncture"and could, he says, signal "a new type of great-power relationship," is being regarded in China as ameeting of equals. From the Chinese perspective, the Middle Kingdom dominated the globe for all buta few unfortunate centuries. Why shouldn't the 21st century bring a return to the planet's naturalstate of affairs? "Xi Jinping is the perfect embodiment of the China Dream," says Liu. "He will helpChina compete with the West and advance to its former glory as the most powerful and civilizedcountry on earth."China's renaissance is by now a familiar narrative, but the story of its astonishing trajectory bearsrepeating. A nation that half a century ago counted Albania as one of its few trading partners is nowthe world's second largest economy--and could eclipse the U.S. as the biggest within five years. TheChinese Communist Party has engineered the fastest and greatest expansion of wealth that anycountry has ever experienced, lifting 300 million people out of absolute poverty. China's trove ofsuperlatives carries global weight: the country's 83 million overseas travelers are the world's biggestspenders; its banks hold the most foreign-exchange reserves; its factories, power plants and vehiclesproduce the most greenhouse gases; its consumers rank as the No. 1 buyer of luxury goods--eventhough China's per capita GDP, calculated on a purchasing-power-parity basis, still rates below thoseof Cuba, Serbia and Tunisia.China may well become the world's largest consumer market by 2015. Already it is the largestexporter on the planet and one of the top five sellers of weapons. How China sees the world mattersbecause Chinese aspirations, tastes and fears will shape the lives of billions of people across theglobe. Indeed, after a couple of centuries of lying dormant, China--and its worldview--may onceagain dictate the narrative of our age. Great powers write history, and if Xi's China Dream comes topass, this century will belong to the nation that millennia ago named itself the Middle Kingdom.Yet China's ascendancy on the world stage can't mask some uncomfortable realities. Despite pouring2

illions of dollars into a soft-power push that encompasses everything from building roads andhospitals in the developing world to sponsoring Mandarin lessons in the West, China's internationalimage languishes. A 21-country poll by the BBC World Service released last month found thatnegative attitudes toward China had increased by 8 points to 39% over the past year. Even in parts ofAfrica, Latin America and Asia that depend on Beijing's aid and investment, China Inc.'s reputation isthat of a voracious extractor of natural resources. The country's military expansion and assertivemaritime claims in the South and East China Seas are spooking its neighbors, not to mention thealleged state-sponsored cyberattacks and pilfering of U.S. industrial and military secrets that Obamais sure to raise with Xi when they meet at Sunnylands, a private estate in Southern California. AmongBeijing's few real allies--and even that term can be applied only loosely--are North Korea, Russia andPakistan.Far from taking a leading role in international affairs commensurate with its economic weight, Chinaremains a foreign policy laggard, often shying away when it could use its influence to promoteregional stability and howling when it comes to territorial flash points with smaller countries likeVietnam or the Philippines. "China says it wants respect from the rest of the world," says ZhengYongnian, director of the East Asian Institute at the National University of Singapore. "But it doesvery little to earn real respect." Indeed, Chinese from both the government and the businesscommunity are often genuinely surprised when they discover that their lavish foreign aid and tradingpartnerships are undercut in the world's mind by escalating territorial disputes and the martialdrumbeat emanating from Beijing.China's assertiveness abroad also belies growing insecurities at home. While the inexorable rise ofChina may be a given in the West, Chinese people are not so sure of their future supremacy. Theworld's greatest economic expansion cannot continue forever. China must wean itself off adependence on low-tech exports, but transitioning to a knowledge- and service-based economy willrequire massive investment and a revamping of the nation's education system to promote creativity.Meanwhile, income inequality is widening, and corruption chokes the Communist Party. "Back in2010, when China escaped the worldwide recession, there was a sense of superiority about theChinese economic model," says Dali Yang, a political-science professor at the University of Chicago."But that euphoria is gone, and now we are entering an era of some doubt and anxiety in China."Some of the seamier side effects of China's three decades of spectacular economic growth--toxic air,poisoned soil, dirty water--are spurring civil unrest. Each day brings dozens of small-scale protestsrelated to environmental degradation, landgrabs by corrupt officials and government repression ofethnic minorities. Those who can are voting with their feet: in ever larger numbers, rich Chinese arefleeing the land where they made their fortunes, taking their children and money with them. In 2011,3

the latest year for which statistics are available, 150,000 Chinese secured permanent residencyabroad. "When a nation's elite is ready to bolt at a moment's notice, it says much about the regime'slack of legitimacy and staying power," says Shambaugh.Battle for the PacificThe U.S.S. freedom pulled into Singapore's harbor on April 18, its hull decorated in gray camouflage,as if no one might notice the first of four American littoral-combat ships to be hosted by theSoutheast Asian city-state. The warship, which will roam the contested South China Sea, is the latestevidence of the U.S.'s so-called pivot to Asia, which will see 60% of American naval vessels deployedin the region by 2020, up from 50%. Back in November 2011, when Obama first announced that hewould rebalance military forces to Asia, he said this was not meant to contain China. Nobody boughtthat, least of all China.Beijing's military buildup--its defense spending has more than doubled since 2006, and its armedforces now include nearly 1.5 million service members, according to Chinese officials--is driven by asense that it needs to prepare for a possible showdown in the Pacific with the world's remainingsuperpower. A Chinese defense white paper released in April noted that "China's overall nationalstrength has grown dramatically" while "some country has strengthened its Asia-Pacific militaryalliances, expanded its military presence in the region and frequently makes the situation theretenser." That the "some country" remained unnamed was camouflage no more effective than theU.S.S. Freedom's gray paint.As China's shadow has loomed larger, other Asian nations--including those with past grudges againstthe U.S., like Vietnam--have urged America to keep the peace in regional waters. In addition, treatyobligations require the U.S. to defend the security of Japan--and of Taiwan, which Beijing considerspart of its sovereign territory. Over the past few months, Chinese patrol vessels have swarmed theEast China Sea near a disputed scattering of islets called the Diaoyu in Chinese and the Senkaku inJapanese. The uninhabited rocks are administered by Japan, but China claims historical ties to thearea, which is rich in natural gas and fishing resources.China is also embroiled in maritime conflicts in the South China Sea, pitting it against four other Asianrivals that share the vast waterway: Vietnam, Malaysia, Brunei and the Philippines. (Taiwan alsomaintains claims.) Beijing says that it has long considered roughly 80% of the sea its own but that itwas bogged down in the past century with the enormous task of rebuilding the nation and had littletime to dedicate to such matters. Now China's behavior has grown more muscular. This year Chinafired on a Vietnamese ship in contested waters. Last year, dozens of armed Chinese vessels pushedFilipino fishermen out of a disputed shoal. Xi has taken the helm of a task force that deals with4

maritime issues, unusual micromanagement by a Chinese leader. "There is a unitary message from Xithat any territory is a core national interest and that China is not going to cede any ground," says theUniversity of Chicago's Yang. "This is an extremely dangerous game."China's behavior is alienating even nations that aren't involved in territorial disputes with it. TakeSingapore, the tidy city-state whose population is majority ethnic Chinese. Its founding leader, LeeKuan Yew, assiduously cultivated ties with Beijing. Yet last year his son, Prime Minister Lee HsienLoong, sent a warning when he visited the Central Party School in Beijing, the ideological heart of theChinese Communist Party, which Xi headed until last year. Lee delivered a spirited defense of theU.S., which he cautioned was "not a nation in decline," as some Chinese have been crowing. "The U.S.is an enormously resilient and creative society," said Lee, "which attracts and absorbs talent from allover the world, including many from China and the rest of Asia."The Great EscapeMr. Guan wants out. the Beijing property magnate doesn't know where he will go yet, perhaps to afarm in Australia or a ranch in the American West. All he knows is that the place that made him amultimillionaire no longer commands his loyalty. "Frankly speaking, I have lost confidence in thiscountry," he says, noting that most of his wealthy friends now have foreign permanent residency ifnot passports. "All the economic reforms we've had will be useless if there's no political reform. If Ican't change this country, then the best thing is to leave."On a smoggy Saturday in Beijing, Guan, who asked that his full name not be used, spends hisafternoon exploring exit strategies. In an ornate room gilded with Louis XIV curlicues and a U.S. flag,Guan and dozens of others listen to a pitch by Li Zhaohui, the founder of Cansine, a Chineseemigration agency. Guan is presented with an array of options for gaining permanent residencyabroad: a €300,000 property deal in Cyprus, a €500,000 villa in Portugal or even a $500,000 stakein a future Kimpton hotel in Milwaukee, a city Li describes as "famous for its high unemploymentrate." (In 2012, 70% of applicants for the U.S. EB-5 investor-visa program, which requires aminimum outlay of $500,000, were Chinese.) Cansine's own fee? At least $15,000.Chinese emigration used to mean an escape from war and famine, railroad workers flooding GoldRush California or wok stirrers crowding New York City tenements. But most Chinese emigrantstoday are, like Guan, wealthy. In 2011, about 80,000 Chinese received U.S. green cards. (Beijingdoes not allow dual nationality, so some Chinese prefer permanent residency to foreign citizenship.)"I wanted a better life, and I wasn't going to get that in China," says Li Yanan, a Chinesebusinesswoman who arrived in Singapore in 2002. "So many deals back home are done under thetable, and I got tired of that."5

The exodus from China has only increased since then. Rich Chinese, after all, have to breathe thesame air as everyone else, and smog in urban centers spiked to record levels earlier this year, withpollution surpassing that of a smokers' lounge. Food-safety scandals, ranging from a river full of deadpigs to babies poisoned by fake formula, make the simple act of eating hazardous. There's also aconcern that one of Xi's central campaigns, a crackdown on corruption, could jeopardize fortunesmade in fast-and-loose ways. Corrupt Chinese officials have a habit of fleeing abroad. In 2011,according to U.S. watchdog Global Financial Integrity, China hemorrhaged more than $600 billion inillegal capital flight.Roughly 300,000 Chinese per year now study overseas, and a large portion pay full freight. Even asselect Chinese schools have grabbed top marks in the Organisation for Economic Co-operation andDevelopment's rankings of math, reading and science performance among 15-year-olds, manyparents worry about the merits of an education system based on rote memorization. Virtually everymember of China's Standing Committee, the seven men who rule the nation, has extended family whostudied abroad. Even Xi sent his daughter to Harvard. The state of Chinese education is especiallyrelevant as China must push its economy beyond churning out cheap exports. So far its universitieshave done a poor job at breeding innovation. As Singapore's Lee noted last year, all eightethnic-Chinese Nobel laureates in science were or later became Americans. "Our government cannotprovide good education, welfare and a sense of security," says Fesy Li, marketing manager of GlobeVisa, another Chinese emigration agency, which is peddling options in St. Kitts and Nevis, Latvia andVanuatu. "Chinese believe they can find these things in other countries."A Dream DeferredWith Mounting Unease on the home front, Xi is relying on flag-waving to unite the masses against acommon foe, be it the U.S., Japan or even the Philippines. Primed by patriotic education, Chineseyouth expect their leaders to stand up to the outside world. But this spring, an online forum linked tothe People's Daily, the government's mouthpiece, asked people whether they agreed with Xi'srhetoric, including elements of the China Dream. Thousands of people responded, and at least 70%said they disagreed with their new leader's principles. The poll was soon pulled off the Web.Xi's China Dream is designed to address some of the country's pressing social problems. But hisultimate concern may be the longevity of a party that has ruled for more than six decades. In his firsttrip as China's leader, Xi traveled to the country's south, the capitalist laboratory where threedecades ago Deng Xiaoping unleashed the market reforms that have remade the nation. But Xi madeno bold initiatives. Instead, in an internal speech that was later leaked, he warned against betrayingChina's communist heritage. "Why did the Soviet Union disintegrate?" he asked, according to the6

leaked account. "An important reason was that their ideals and beliefs had been shaken. It's aprofound lesson for us. To dismiss the history of the Soviet Union ... is to engage in historic nihilism,and it confuses our thoughts and undermines the party's organizations."That obsession with avoiding the Soviet Union's fate could well prevent the Communist Party fromcarrying out reforms that will make the nation stronger and improve its image abroad. In April--evenas state newspapers heralded Xi's antigraft efforts, which include a much hyped crackdown onextravagant banquets and expensive cars for government officials--activists in Beijing were detainedafter holding a banner that read: UNLESS WE PUT AN END TO CORRUPT OFFICIALS, THE CHINADREAM WILL REMAIN A DAYDREAM. Investigations by foreign media into the fortunes of Chineseleaders' families are scrubbed from the Internet. Efforts to clean the air are foiled by competingdirectives to maintain growth at all costs. "The average urban Chinese can't say life is better now thanit was five years ago," says Bo Zhiyue, a senior research fellow at the National University ofSingapore. "People are realizing that GDP growth isn't as important as quality of life."Such contradictions proliferated as the ancient Chinese dynasties waned. Of course, China watchershave predicted the demise of the People's Republic for half a century only to be proved wrong. In anation that boasts five millennia of civilization, any number of lessons can be plucked from the past.But here's one from the Tang dynasty (618-907), when China could rightly call itself Zhongguo, or theMiddle Kingdom. Tang innovators introduced the planet to gunpowder and woodblock printing. Thebest and brightest of the world came to China, and the imperial capital, Chang'an (modern-day Xi'an),was a polyglot place where up to one-third of the population was foreign: Persian merchants,Japanese monks, Turkish chefs.Today, Beijing's foreign population is less than 1% of the total. (In New York City, some 35% of thepopulation is foreign born.) Add to that the brain drain of Chinese elite. "There are always capitaloutflows from any country," says Wang Huiyao, who runs the Center for China and Globalization inBeijing. "But China doesn't have inflows of talent. We have a huge deficit, and that will make it harderfor us to rise in the future." How the world views China, then, may matter just as much as how Chinasees the world.7