Moscow, may 19 — “News. Economy.” Director of the Institute of China in Podansko the University of Shanghai Zhang Weiwei is a well-known economist and a former translator of Deng Xiaoping, trade wars, errors trump, the real purpose of China and about the gratitude of the USSR — in an exclusive interview with Evelina Zakamskaya.
Mr Weiwei, we know that the story is different periods and from time to time repeated, how do You think what period of Chinese history to compare the current period?
I would call this period of national reconstruction. We see it as the return of China to the status it had in the past. This goal we plan to achieve in two stages: the first — to 2035 year, the second — to 2050-th year. In the first stage, China will fully complete its upgrade, and the second will be a developed socialist country.
How do You assess the role of the individual in Chinese history? We know Mao Zedong, and know what role he played in establishing modern China. We know the Day Sapina, the man who defined a new way of China. And now we are talking about the new role of si Jinpin — the current leader of China. And how do you see its role?
I am very glad that you pointed out these three outstanding Public figures. Indeed, Mao Zedong despite errors during the Cultural revolution managed to unite most of the country and laid the Foundation of China’s growth. Deng Xiaoping made a great contribution in the modernization of China: when it ended the industrial revolution. If you look at the major economic indicators of China 40 years ago, they were in some cases lower than the corresponding figures for African countries. And at the moment China is the 2nd largest economy in the world, but in purchasing power parity already. Despite this success, China is now faced with such challenges as corruption, the income gap of rich and poor, environmental pollution, and all of this is now active and hard fighting XI.
The success of the Chinese economy can not disturb the American economy and American politics. And we see the unfolding of an unprecedented trade war between the United States and China. As far as they are concerned about Chinese society, how much they bother You as a scientist?
In fact, from the first day when I turned this trade war last year, I agree with those who say that China need not to worry about it. Just look at the volume of the Chinese economy and to calm down. China is already the largest consumer society on purchasing power parity: about 6 trillion dollars. If you look at the history of human development: starting a war with the largest country, in terms of consumers, you probably will lose in this war. If you look at the list of products on which Donald trump is trying to impose duties, most either made in China or China is the largest producer in the world. To have spoken to Donald trump about his victory, we know that’s just nonsense. As a result, these fees in the form of taxes will fall on the shoulders of American citizens. Of course, in trade wars there are no winners — everyone loses, but the US has more to lose. If America is going to lose the Chinese market, it will no longer be a superpower. This is my forecast, but let’s see whether it will come true.
But whether such a result is not to be a loser, but not be a winner?
It is important how you define defeat and victory. As I said, for China it has two targets: 2035 and 2050. If we achieve their goals in these terms, then we will win. Trade wars are not limited to one trade, it and new technologies, such as “5G”. In their development will slow down. But Donald trump is very old-fashioned. His idea of trade wars correspond to the 80-th years of the last century, when automobiles fully assembled in Japan, sold in USA. Now other times are all part of the global supply chain. If you punish a Chinese company, you simultaneously punish the South Korean, Japanese, German and American companies, because their parts are harvested, for example, American iPhone. So the United States will suffer first of all. So I recall the words of former Vice-President of the United States since Obama Joe Biden: “Donald, Oh, grow up”.
In Asia Time magazine recently published an article with the title US played “Monopoly, and China is playing “Go”. This game is about strategy, far-reaching plans. You described China’s strategy, it pursues economic interests, primarily pursues the interests of the people of China. But what is the purpose of the United States? Do it, and if it is compatible with your interests as you continue to consider US as their partners?
To trade wars, we thought that we might have a mutually beneficial relationship. And now yet believe. Thanks to this cooperation in the United States there was virtually no inflation. Donald trump says that we steal American jobs, but the situation is quite different, the problems of the US in their political system, those huge profits that they get in China of American corporations, such as Apple, do not reach the middle class of the United States, and it is shallow. The benefits that have American companies in China might disappear, so 90% of them are against the trade war. In its policy, the United States guided by the principles of “hard power” and “soft”, the latter interpreted them in English saying “China, not being able to resist America, will join her.”
Now very curious to watch the development of the exchange of sanctions, restrictions, duties, the situation between China and the United States. China is know as a very experienced negotiators who love to dive into the details, I love to delay the answer, but don’t go aggressive. And now we are seeing a situation where the United States is an aggressive action announce new tariffs on $200 billion and China during the day announces their fees by $60 billion And the whole world wonders — China changed tactics?! China makes sudden movements?! China really changed his tactics, or you just saw how to act with these “partners”?
We are being very cautious and trying to minimize the impact of a trade war. The first condition is to promote Americans to buy more and more of their products. The second point is protection of intellectual property, the third requirement, the so-called “structural reforms” which in fact means changing the model of China’s economy. As regards the first condition, then Yes, we can buy more American goods with the second requirement we also do not have serious contradictions: indeed, we strive to improve the protection of intellectual property in our country. But the third requirement is unacceptable: China will not change its economic model, even if America changes its. In fact it caused the global financial crisis that American financial “bubbles” — the main danger to the economy.
In 2008, when the US created global financial crisis, China has extended a helping hand and helped to get out of the situation by buying us Treasury bonds. They have short memories, but even three or four years and a new crisis is inevitable, and it is unlikely that China then will hasten to help US.
We did our best to be patient, polite, the Americans known the time tried to do the same, but that now makes D. trump their pressure will lead to the fact that we abandon all our concessions. This is a historic principle of China: “to be polite even if you have to fight to the death”.
Few in the world today can tell US: “You must change”. But do you know what the world thinks when watching this fight the two superpowers, in fact? The world thinks, and will not be whether China is the new United States? Because today the world is tired of US hegemony, the political will, economic will, that America constantly imposes on other countries.
China is very different from the United States, we have this American mentality, the desire to be the world’s policeman, it’s not in our culture, not in our traditions. Here’s an example: as soon as the US by the end of the 19th century became a large economy, they immediately attacked the Spanish possessions, Cuba and the Philippines.
But when China became the largest economy in purchasing power parity terms in 2014 year, said all the neighbors: “Let’s solve all the disputable issues in the South China sea through negotiations.” We could for one day to the disputed Islands, but didn’t. We even suggested that they “let us work together to develop resources in these disputed territories.”
Chinese culture — the culture of peace. We are a hundred times more peaceful than any Western power.
In the second half of the 15th century during the Ming dynasty China was the most powerful Navy in the world. We traded with Indonesia, and Africa, and never captured territory. We do not have a religious obsession to remake others in his own way. In the military strategy of China is written that any State aspiring to the war, ultimately destroying itself. In Chinese philosophy laid down that war is the last step, and should be very careful to ensure that its to start. But if you’ll drive us into a corner, we have no choice: will have to fight.
Nevertheless, you have already three times said the word “war”. Although I am only talking about trade wars. It turns out that this idea somewhere in the minds of Chinese policy, the Chinese establishment is present?
In 2016, the year was a dispute between China and Philippines in the South China sea. Then, the United States has sent two destroyers to the area, and the commander of this compound openly threatened China. China then announced the largest naval exercise, after informing the American state Department. And suddenly two American destroyers disappeared from the disputed area. However, we knew in advance that Americans would do.
Let’s talk about Russian-Chinese relations, I confess, they interest us much more. What is Russia’s place in contemporary Chinese politics? We really show the unity and commonality of views on many issues in the first place in world politics. But it is much less reflected in your economic agenda, rather than could, and than expected it would be in Russia. I remind you that investing in oil and gas field in Alaska from China exceeds the investment of China today in all of Russia.
Most Chinese traditionally good attitude to Russia, we remember the days when the Soviet Union helped us. 156 projects mainly in engineering helped China lay the Foundation of the industry. More than 30 thousand students then enrolled in Soviet universities.
In the Chinese culture as well as Russian — we remember friends. Our proverb says: “when you drink the water remember those who dug the well”.
If we look at the Chinese model, which I think is very successful, we will see that we took the Soviet model, but reform it, taking the best. For example, strategic planning. It has become more specific. For example, to develop the latest standard of mobile communication “5G” or artificial intelligence. If you now compare that how decisions are made in the USA and China, you will see that we have they are more balanced. The father of our reform Deng Xiaoping spent a year studying the economy of the Soviet Union in the NEP period, when it was much more liberal compared to war communism. And now we are glad that our presidents be able to cooperate.
From the point of view of the Chinese experience, the investment must be profitable in order to become long-term. When China started on the path of reforms, he created special economic zones with special tax treatment to investors. The first two years they did not pay income tax, the next three years were paid only half, so five years has been favourable regime for attracting investments.
In Russia, unfortunately, such a policy has not yet introduced: at the level of municipalities taxation contrary to what is declared in the center. So now Russia can learn from our experience, as we studied the Soviet.
Since Russia and China are the largest country in the world, it is not easy to coordinate the work of many companies, but I am glad that our trade is growing very rapidly. Since last year, the Asia, rather than Europe became the largest trading partner of Russia, but we can further improve these figures.
Perhaps that would not slip, it was necessary to keep the Soviet Union or to take out the best in him. Where in the strategy of China to be Russia and what kind of relationship we should be linked in the future? What are the goals facing our countries?
Our President XI said openly that the relationship with Russia are the most important in this century. This strategic decision of our leader. If you look at the world today, you will see the decline of the West, and the rise of everyone else. And among them China and Russia play a key role. Personally, I very much appreciate Russia’s position on many issues, on Syria, on Iran. I believe that Russia and China are two major forces for maintaining stability and development in the world, and it is very important for the interests of all countries.
Read more •••