China's development and diplomatic strategy - money can't buy love

Back on strategy again, China's development strategy.

I want to comment on the mis-understanding of China's development strategy by Howard French. To be fair Mr French's discussion was not about strategy. So I am just following up on the issues he started. Mr. French first asked "What sort of power does China aspire to be?", then he went on to say "can a country make a successful transition to great-power status without real friendships". While he has made good analysis and deduction based on that premise, unfortunately, the premise where he started does not hold, in my view. China does not aspire to be the kind of "great power" most people have in mind.

French claimed that "Today, China is closer than it has ever been to superpower status". First, China was a superpower for most of 200BC till 1800AD, sort of, although unlike the superpower at present day, it remained largely local. Second, I have never heard of any superpower with a GDP/cap of $1200, or even if in PPP, $5000. Many people disagree with French that China is a superpower, e.g., Stan Crock ("The China No One Talks About"), and Richard Fisher of Dallas Fed Reserve Bank. Mr. French started his deduction with a false hypothesis. If Chinese leadership is deluded by such "superpower" dream, it will not only be detrimental to China, it may also not be a good for this world.

As discussed in my early post Tao Guang Yang Hui (and also noted by French), China's preferred strategy is Tao Guang Yang Hui, which translated into English by (Mr.) French as “lay low at a time of adversity”. This was Deng's instruction before he passed away. Deng knew that China is far from qualified to the great power aspiration. It is a few generations behind the Western powers. He has set a very realistic objective of "re-doubling" China's GDP/cap in 20 years, which was in fact achieved in about 15 years. In addition, Deng also anticipated (correctly) that because of China's size, many countries are vigilant about China's rise, even if one excludes the neo-conservatives and China bashers in US and Japan. On the other hand, China needs a peaceful environment to emerge from the mess that started 150 years ago, and play catch-up for another 200 years prior to the Opium War. This is not something which can be accomplished in a couple generations. It took Japan over a century (1860-1980) to catch up with the West even though they started with great visionaries like Ito Hirobumi (伊藤 博文). Even discount the mis-steps in WWII Japan still used a full 100 years.

So Deng was right, China should not aspire to be a great power, not before 2050. China just wants to be the same as others in this world. China should concentrate on its internal problems, which are plenty (e.g., SOE and SHE still account for 41% of industrial output). Any departure from this objective will both risk internal instability, and worse, feed to the China bashers and "containment" advocates. Any gain will thus be negated by more active "containment" by, e.g. the US and its allies. The difference between Mr French and me is that I believe China should stick to this "laying low" strategy for at least another two generations. China's future lies in being a part of the global community, and making a lot of friends and no enemy, as Mr French pointed out. China's future does not lie in being a "real power".

It is not that China does not want to make friends in, e.g. Africa. If you see how the neo-conservatives in US react to even the most capitalist driven investment of China there, you know what French suggested is not feasible, well, unless China is "asked" or invited by the US to do so. This is not to belittle China or exaggerate the American influence. This is just the reality as seen by Deng, and by ordinary people like myself.

Regarding China's aids to the tsunami disaster, or famine in Africa. China should contribute what it can afford to, i.e. at the same (per capita) level as other country with the same GDP/cap, such as that of Philippine or Indonesia, provided such action does not provide an excuse to "China containment" advocates. Plot a scattered graph of donation/cap vs GDP/cap one would see that China did not undercontributed compared with its peer. Again, this is not to say one should yield to these lunatics, it is just not worth the trouble. Sending worker to rebuild roads, or medical team and drugs, are much more cost-effective options for China than sending cash, because Chinese generic drugs are cheap, so are its labor costs.

Mr French also made a mistake in his example (although that is peripheral to the theme of discussion). Norvatis has patented the combination therapy (ACT) of the active ingredient artemisinin (extracted from sweet wormwood, artemisia, or Qinghao-su) with lumefantrine globally. China is not allowed to sell or donate the medicine outside China. WHO has only two authorized suppliers, Norvatis and Sanofi. For a publication on IHT perhaps they should to learn to use google (I made a similar mistake myself, see comments below)

• According to Kathleen Deoul, "They claim that using Artemisinin in combination with Lumefantrine will protect the herb against losing its effectiveness. This makes sense on first glance except for one thing: Artemisinin has been used for over 2,000 years without losing its punch.
  Why would it suddenly do so now?
  The simple truth is that Novartis is not afraid of Artemisinin losing its medicinal power. It’s afraid of losing the drug’s financial power. As long as it is sold in combination with a conventional pharmaceutical product, the combination can be patented even if the herb cannot. That means that whenever the patent on Lumefantrine is set to expire, all that Novartis has to do is combine it with another pharmaceutical product "
• see also this economist article on the ACT therapy, which China does not have the patent.

Finally, Mr. French's claim that China does not "have real friendship". True, there is no real friendship with Japan, US or many European world, or India or Russia. But it has been improving on all fronts, perhaps except for Japan. In addition, China does have a lot more true friends in the third world than US, UK, or Japan, "truer", at least. Malaysia has been turned from a foe into a friend, so was S Korea. Money cannot buy friendship, as we have all learned from Taiwan's micro-nation diplomacy (aka silver bomb diplomacy). These nations can switch loyalty from the mainland to Taiwan and back to mainland all within a few months. Donation to disaster should be a decision independent of geopolitical considerations, nor whether you view the country as a friend or not. Greeks aided Turkish when earthquake shaked. Indonesian helped Aceh when tsunami hit. They both won friendship sfrom their enemies. The day Bush would do the same when hurricanes pass by Cuba we can see world peace. (corrected thanks to matthew's comment below)

Money can't buy love. If China wants to win real friendship, it should use its heart, and treat its friends with respect. Aspiration to be a superpower itself is a friendship repellent, look at Mr. Unilateralism.

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Updates and reading:

• highly recommend this great essay by Wang Jisi, a rising star within China's think tank and academics, recently promoted to become the Dean of School of International Studies of Peking University, and also Director of the Institute of International Strategic Studies at the CCP Central Party School: China's Search for Stability with America, the original Chinese version is 中美关系：寻求稳定的新框架; and his more recntly article 三十年来中美关系的变与不变 where he said "China has never become a rival of the US" and "China and America's non-rivalry suits both sides' long term interests"