Much of the West, as well as Asia, continues to assume the worst about China - a habit of mind that could have catastrophic consequences. As Albert Camus once wrote, “Mistaken ideas always end in bloodshed, but in every case it is someone else’s blood."

Much of the West, as well as Asia, continues to assume the worst about China - a habit of mind that could have catastrophic consequences. As Albert Camus once wrote, “Mistaken ideas always end in bloodshed, but in every case it is someone else’s blood."

The celebration of the 70th anniversary of the founding of the People’s Republic of China on October 1 will be an exuberant affair, involving glitzy cultural events, an extravagant state dinner attended by Chinese and foreign luminaries, and a grand military parade in Tiananmen Square. And, at a time of high tensions with US President Donald Trump’s administration, it will be imbued with an extra dose of patriotic enthusiasm. But while China has much to celebrate, it also has much work to do.

The first 30 years of rule by the Communist Party of China (CPC) are judged harshly, owing to the disastrous Great Leap Forward and the Cultural Revolution. But these were not lost decades. On the contrary, major strides were made in modernizing China: local and national power grids were established, industrial capacity was strengthened, and human capital rapidly improved.

As a result, China’s human-development indicators, on par with India’s 70 years ago, surged ahead. From 1949 to 1979, the literacy rate rose from below 20% to 66%, and life expectancy increased from 41 to 64 years. All of this set the stage for Deng Xiaoping’s program of “reform and opening up,” which unleashed China’s rapid economic growth and development over the last 40 years.

Today, China’s to-do list remains long, but its leaders are working consistently to check off agenda items, from reducing inequality and reversing environmental degradation to restructuring the economy. If they are to succeed – thereby solidifying China’s development model as a viable alternative to Western-style liberal democracy – they will need to deliver on two key imperatives in the coming years.

First, China needs to reach high-income status. So far, China has relied on the massive size of its markets and rapid output growth to raise incomes. But these forces only take an economy so far, and China’s institutions, technology, and prevailing mindset remain more closely aligned with today’s $10,000 per capita income than with the $30,000 level to which the country aspires.

Second, China must ensure that the Belt and Road Initiative (BRI) is a success. This means implementing an inclusive program of cost-effective, environmentally sustainable infrastructure construction that does not result in unsustainable debts.

Neither of these goals will be easy to achieve, especially given a challenging external environment. While China revels in its birthday celebration, the outside world – beginning with the United States – is worrying about China’s aspirations to become a global leader in technology and in geopolitical terms.

When a large ship sets sail, its wake will agitate other boats, no matter how skillfully it is steered. And yet China faces the daunting task of keeping other countries calm as it sails on. This will require, above all, open, frank, and consistent communication between China and the outside world.

But the onus is not entirely on China; Western leaders also must be receptive to the country’s efforts. China has long promised the world a “peaceful rise.” Unlike the nineteenth-century US, it has no Monroe Doctrine, which attempts to guarantee its sphere of influence, and claims no “manifest destiny” to expand its territory at all costs. In fact, since Deng, all but one of China’s border disputes have been settled through peaceful negotiations. It took China 11 years to negotiate, inch by inch, its borders with Russia.

Yet much of the West, as well as Asia, continues to assume the worst about China – a habit of mind that could have catastrophic consequences. As Albert Camus once wrote, “Mistaken ideas always end in bloodshed, but in every case it is someone else’s blood. That is why some of our thinkers feel free to say just about anything.”

To avoid falling into the trap of war, Western political and intellectual leaders must not blindly believe those who assume that confrontation with an ascendant China is inevitable. If any historical experience should be brought to bear, it is that of near-misses and miscalculations – reminders of how easily a standoff can become a calamity.

Past incidents – such as the 1999 bombing of the Chinese embassy in Belgrade by NATO forces, or the 2001 collision of US and Chinese aircraft off Hainan Island – have been settled through negotiation. But, given rising antagonism toward China, there is no telling whether leaders would manage to replicate that outcome were a similar incident to occur today.

The first 70 years of CPC rule brought rapid development, but ultimately only modest prosperity. Now, China must shift its attention to raising incomes and implementing the BRI effectively. These goals can be achieved only in a peaceful, stable context. China’s leaders understand that. But they still must convince the West that they do.


Keyu Jin, a professor of economics at the London School of Economics, is a World Economic Forum Young Global Leader. Copyright: Project Syndicate, 2019, published here with permission.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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Same Same only Different...

17
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"The first 30 years of rule by the Communist Party of China (CPC) are judged harshly, owing to the disastrous Great Leap Forward and the Cultural Revolution. But these were not lost decades. On the contrary, major strides were made in modernizing China: local and national power grids were established, industrial capacity was strengthened, and human capital rapidly improved."

Not lost decades? I've got an alternative for you. One where you get much better power grids and industrial capacity, without the hundreds of millions of dead. It's called free market capitalism.

When one glances at Taiwan, South Korea and Hong Kong, the only valid conclusion one can reach about China's economic story is that it has been a failure, through and through.

Comparing China favourably to India just shows how disastrous it has all been.

"But, given rising antagonism toward China"

Given rising antagonism from China, several nations are finally standing up to the bullies.

"The first 70 years of CPC rule brought rapid development"

Facepalm.

遥祝祖国70年华诞,和谐,富强。

Happy 70th anniversary, China.

Live broadcast of the military parade soon available here (https://www.youtube.com/watch?v=vCDDYb_M2B4).

Enjoy.

The world can only hope it doesn't reach another milestone.

The "world" you refer to may only include the US, Australia, and Canada right now -- a total of less than 400 million odd people or less than 6% of human being on earth.

The Phillippines, Vietnam, Cambodia, Laos, India, Malaysia, Indonesia, South Korea, North Korea, most of Africa, Europe and... who's left?

New Zealand.. Some old maps shown NZ was discovered by the Zhou way before Capt Cook!

Uh oh, they've "found" another map!

Only 267 more social credit points until you earn extra fast internet connection.

Huawei is selling special edition phone, the 70th anniversary version of the mate 30 Pro with special software installed at no cost.

Is that winnie the pooh phone

The brainwashing parade is hilarious

First to stop waving and clapping are organ donors.

Good to see Comrade Jian Yang there reporting back to base, too.

18
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The 'Great Leap Forward' fully deserves to be harshly judged. 45 million dead and all Mao's own fellow Chinese citizens.

Dont forgot the poor sparrows as well

And the "Hundred Flowers"

Yes. But we shouldn't just judge nations by their past.
Look to the present.
And in China we see intimidation and mass incarceration of minorities.
The west has every reason to be skeptical of China.

Wow - sooo few comments bout this topic. Must be lots of censoring - I guess lotsa bad things said.
very repressive regime...even during my time.

11
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"In fact, since Deng, all but one of China’s border disputes have been settled through peaceful negotiations..." Tell that to China's neighbours in the South China Sea.

11
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In the south china sea, Chinese boats regularly ram/sink Vietnamese fishing boats and sometimes kill Vietnamese fisherman in Vietnamese territorial waters and disputed international waters. Take a look at Vietnamese social media for videos. Does not strike me as "peaceful negotiations". It appears China only knows force and economic hegemony (or economically controlling neighbouring one-party dictatorships (e.g. Laos, Cambodia). There is no middle ground.

Pretty aggro to parade their nukes through the streets

18
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Yesterday, David in the Breakfast Update said there would only be propaganda coming out of China this week but this is taking things a bit too far.

There is no moral equivalency between the West and China. So please stop acting that the murderous communist regime is somehow the best thing to happen to China and the world ever. China would have been a lot better off without the CCP (compare that fact to Taiwan and HK). Also 10s of millions of people would not have been killed by the communists' brutal reign of terror that continues.

10
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I mean I'm all for differing perspectives and viewpoints but posting this sort of narrative is just bizzare...?

It's called excrement shoveling....

keyu jin is highly qualified to comment on the 70th anniversary of communism and how wonderful it is as she and her family have prospered under the system.her analogy of the large ship setting sail is apt too.I dont think we will be able to get out of the way unless we scrape off all the barnacles and lose some dead weight.

To be honest I'm impressed with China. You cannot argue that they are going forward while most of the world including us are going backwards.

13
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Impressed? Uigher cultural eradication going forward a million people imprisoned enslaved and in no small numbers murdered for the crime of having the wrong parentage... Tibetan cultural eradication completed. Religious brutally repressed and eviscerated to provide organs for elites. Han and party must be supreme!! They have done a good job of building infrastructure - at the cost of 100's of millions of people forced to leave their homes to work in distant cities, with 10's of millions of kids being separated from their parents for all but a few days a year. Party bosses are doing nicely though, their families made billionaires, so that is wonderful.

Sounds a lot like free market colonisation days of old...

You reckon we should have a fancy dress parade celebrating the anniversary of King Leopold's Congo Free State likewise, then?

Not sure that's a grand idea.

10
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I think you're mistaken Carlos.

Those thousands of towers springing up everywhere like beanstalks do not represent progress as some think - they're fake, and bound to collapse, just like China's credit sector.

If you go to China, like I have, you see regression everywhere. Crime everywhere. Kidnappings. Drunken brawls in the street directly in front of CCP propaganda billboards. Police visits for foreigners every week. Social credit to prevent the naughty amongst them from travelling.

All that impresses you?

China's ghost cities are the equivalent of Japan's roads to nowhere.

People were impressed with the USSR as well .... amazing what can be hidden behind an Iron Curtain. China is in effect a closed country with a veneer of openness (unlike North Korea which is a closed country with no pretense of openness). The Great Firewall, capital restrictions and currency that is in effect worthless outside of it's own borders (and pegged as well) does not indicate a country that is "going forward" . The success of China will depend on if the CCP can give the people what they want (food security being an example - people can't live on party slogans) - not ghost city's. The regime changes or there will be a regime change. Most of the CCP's actions revolve around distracting / restricting the populous. The real danger for the CCP comes from food / water supply and it's ability to ensure food / water security.

EDIT spelling

China plans to step up efforts to lift economy - central bank"

Unlike the orchestrated chorus of European & US central bankers, the Chinese central bank focuses on monetary policy (boosting bank credit) & does not pass the buck by demanding fiscal boost

Yet another article referring to economic progress in China since 1978 in particular.
WHEN is this site going to publish anything politically, socially or economically critical, especially in relation to human rights record in other people's countries (Tibet) and in China itself, or on liberty/freedom of speech and voting?

I agree.
The question must be raised though - is it a finance focused website's role to do do?
I would argue yes. Should not separate economics from politics.

"First, China needs to reach high-income status. So far, China has relied on the massive size of its markets and rapid output growth to raise incomes."

ie coal.
To raise incomes, they will need to burn more of something .... which is coming from where exactly?
https://www.darrinqualman.com/chinese-energy-consumption/

I take it the income figure quoted 10,000 is the GDP figure earned per capita for china not what they earn in wages.

They're big, they're bad & they shout a lot. Pass.

So the LSE is infiltrated with Communist propagandists??

Just business as usual. Western liberal elites have been infected by the lure of Chinese money and power.

China to unveil stealth drone, 'Sharp Sword' today.
Has it already been field tested in Saudi Arabia to hit the oil fields ?

Hmmm not sure Interest about publishing this propaganda.

We are so stupid here in the liberal west. I cannot wait to be sent to a Chinese communist re-education camp to be reformed. Keep up the good work shamelessly promoting the party interest.co.nz.

The west sold out a long time ago. Morally bankrupt.

You must/will trust us, we know what we're doing. Yeah right. She is just a mouthpiece for the Chinese dictatorship, masquerading as legitimate because of where she works. eg:
https://www.bangkokpost.com/opinion/opinion/1441663/the-west-is-wrong-ab...

Come on interest.co.nz, even a cursory search reveals she isn't what she purports to be. If you are going to put stuff like this on, how about balance it out.

her daddy is a long term politician....

She pulls out the good ole trick of a providing a degree of admission of past failures, to gain western liberal sympathy.
It's so obvious.

The Great Leap Forward, what a tragedy. I'm surprised that mans face is on the ¥100 after all that loss of life.

Back to the article. I think an economic downturn is coming to China.

The economic data we read about is likely unreliable. Furthermore, the lack of business auditing in China doesn't fill me with optimism about their economy.

https://www.forbes.com/sites/kenrapoza/2019/09/30/october-should-scare-c...

“Not only has China declined to adopt promised reforms, it has embraced an economic model dependent on massive market barriers, heavy state subsidies, currency manipulation, product dumping, forced technology transfers and the theft of intellectual property and also trade secrets on a grand scale. As far as America is concerned, those days are over.” - President Trump

Three words come to mind when thinking about Chinas economy: house of cards.

Sounds like free market capitalism.

Economics 101: supply and demand
Multinational corporations demand more profit, cheap labour and mass production. Governments demand foreign capital investment to boost sharemarkets. Consumers demand cheap consumer goods so they can afford their overpriced mcmansions, demand gadgets and novelty items to improve their social status. Property owners demand foreign capital investment to increase their wealth. Everybody demands that someone else deals with their pollution and waste.

China supplied it.

Now we all wanna bitch about it without looking in our own back yard, our own mirrors.

Without China as the engine room of the global economy for the past couple of decades we couldn't have kicked the can as far down the road as we have. We couldn't have ignored the reforms we should've made ourselves. Now, when the music stops, we'll see that not only do we not have any paddles, but the boat's leaking and overfilled, and already at the edge of the waterfall.

Hold tight, it's going to be an exhilarating ride.

I have a question for the comments section. Who funds the Confucian Institute in Auckland?

Don't know. But confucianism is great. I love many elements of traditional Chinese culture and philosophy. Confucianism has been suppressed by the communists, although not so much today.

It's funded by Winnie the Pooh.

Wrong. Funded by Chairman Mao

If China is so "great", who so many Chinese immigrating to Auckland?!

To make the Chinese great and wealthy, obviously.

All very good , now they need to show us we can trust them , and stop the mercantilist policies that are doing s much damage to the world economy

Hear hear, welcome to 1984