Speaking Of Asia

To China's 40 years of reforms, yam seng!

China continues to power ahead four decades after Deng Xiaoping set the country in a new direction. As a giant on the international stage now, it needs to be more mindful of the impact of its actions.

As South-east Asia heads into the Chinese New Year weekend, we are getting useful reminders that the civilisation that spawned the celebration continues to be in vibrant mode, and poised for renewal in myriad ways.

This week's release of Singapore tourism data for 2017 revealed that China has ended Indonesia's two-decades-long reign as the top market for the island's tourists, with more than 3.2 million visitors over the year. Increasing numbers of Chinese are travelling out by air and sea as their country's massive economy continues to expand.

Last year, China's slowing economy nevertheless grew close to 7 per cent, beating forecasts.

But you'd expect that from China.

More interesting are stray bits of data that point to remarkable new directions in which the country is heading. Take solar energy, for instance, where it is a global champion. China had planned to reach 105GW of solar capacity by 2020. It passed that target last year, three years ahead of schedule.

China today adds more solar capacity in a month than Australia's entire installed photovoltaic capacity. By 2040, according to the International Energy Agency, renewable sources will account for 40 per cent of the country's energy generation while coal, which now provides two-thirds of China's energy, will drop to the same level.

This swift ascent may have come with heavy costs in the form of polluted cities and chemical-coated lakes, but there is determination to learn from mistakes.


This year marks the 40th anniversary of Deng Xiaoping's reforms and, looking back, one cannot but marvel at the milestones, big and small, that have marked that remarkable journey.

From the small step in 1978 of allowing farmers to sell their produce in local markets and the new laws passed the following year that allowed foreign capital to enter China, to the reopening of the Shanghai Stock Exchange in December 1990 after four decades, entry to the World Trade Organisation (WTO) in 2002, the setting up of the Asian Infrastructure Investment Bank, and the International Monetary Fund's acceptance of the yuan as a reserve currency in 2016, there is not a corner of the world that has not felt its impact.


The reforms would provide such a boost that until 2012, the Chinese economy would clock double-digit growth consistently for three decades, achieving - in the words of a former United States envoy to Beijing - an economic performance that has "raised more people from poverty faster than ever seen before in history".

And as it plots its course, it is building new relationships around the world. This week, I sat down with Professor Flemming Besenbacher, a reputed figure in nanosciences who is the chairman of Danish beer company Carlsberg. Prof Besenbacher's curriculum vitae lists more than a dozen Chinese universities that have honoured him with doctorates.

I asked how many other Asian universities had similarly recognised him; Prof Besenbacher looked away.

Meanwhile, millions of Chinese students have passed through the portals of top-class universities in the US, Europe and Australia. Rather than wait around trying to extend their stay, they seem to be in a hurry to return home lately.

Some 82 per cent of students who studied abroad returned to China last year, up from 72 per cent in 2012, according to government figures.

To be sure, Chinese growth is slowing but even at its current pace of expansion, China adds more to global gross domestic product growth in a year than the combined GDP of Thailand and Philippines, Asean's second-and third-largest economies, respectively. There is no hard landing in sight and while its debt continues to be a worry, its economic managers have proved equal to their task. The feared capital flight that raised so much consternation two years ago has been staunched.

Every economist, fund manager and political thinker who confidently predicted the coming fall of China has had to eat his spreadsheet - at least thus far.


Put together, everything points to a new Chinese wave that is building around us, not just on opportunity but excitement and pride too. Why else would the young, enjoying the liberties and democratic freedoms of the West, hurry back home?

Militarily, China has never been so powerful. Its navy today has more surface ships than the US which, of course, still dominates the planet with no fewer than 11 carrier battle groups.

But the People's Liberation Army is leaner now - President Xi Jinping having trimmed its various commands from seven to five - even as its technological capabilities, including in cyber, have leapfrogged.

The issue for the world, particularly nations that live on China's periphery, are two. First, will China continue to find new sinews of growth and, second, what it intends to do with all this heft.

On the first, there is little question that it is reasonably sure of its ground. Productivity increases, the embracing of automation and robotics (it has been the No. 1 importer of robotic equipment since 2013), the push for green technology and its massive strides in digitisation as well as successes in building innovative, world-class companies all portend a second wave.

Indeed, its relentless pursuit of global technology firms that it feels can add value to its industries is legend. The foreign direct investment (FDI) flows into China used to be the figure to watch - more than US$700 billion (S$919 billion) by some estimates. Since 2016, however, more attention has been paid to Chinese outbound FDI - and not always in a positive way.

China needs to work harder to quell those suspicions, which stretch from Auckland to New York. Australia recently introduced legislation imposing stringent curbs on foreign donations to political parties and will force lobbyists to reveal their overseas clients.


Foreign intelligence services, said Australian Prime Minister Malcolm Turnbull as he presented the Bill to Parliament, were interfering in his nation's affairs on an "unprecedented" scale.

With its unique development model, disregard for human rights and - except perhaps for the troubled decade of the Cultural Revolution - competent national leaders, it is generally acknowledged that China, unlike many of the nations it deals with, has been in a position to take the long view.

Yet it has had its stumbles. When Super Typhoon Haiyan struck the Philippines in November 2013, its initial offer of support was so niggardly - Beijing was angry with the Philippine government of the time for taking the South China Sea issue to international arbitration - that some newspapers commented that the European furniture-maker Ikea had given more.

The nation that propounded the five principles of peaceful coexistence, the benchmark subsequently adopted by many others with some adaptations, has often appeared to come across as a bully. Not too long ago, at a meeting with his South-east Asian counterparts, then Foreign Minister Yang Jiechi was said to have looked an Asean minister in the eye and said: "China is a big country and other countries are small countries and that is just a fact."

Equally, fear that China's growing power may some day threaten their very way of life is drawing some powers like Australia and Britain - nations that are hardly likely to feel direct military pressure from it - to raise their military profiles in Asia and seek to construct fresh strategic alliances here.

President Xi has not helped his case by campaigning against Western values and speaking of an Asia for Asians, even if that was talk meant to shore up his support with the Chinese Communist Party.

This week, Britain, whose Prime Minister was in Beijing recently, suggested that it would sail a warship close to disputed isles in the South China Sea in the manner that the US has been doing.


If, and when trouble arrives at China's doorstep, it could be dressed in any of three or four garb.

First, China, the world's top exporting nation - it was at No. 30 when reforms started - is more dependent on the world today than it has ever been before. Having become expert at using WTO's dispute settlement mechanism, its refusal to countenance international law where it collides with its interests has brought long-term consequences, witnessed in the resistance to Beijing that has begun to coalesce.

Second, a more dramatic slowdown in growth - not outside the realm of possibility, given that its economy is maturing and its population ageing - could remove the cushion for policy errors.

The Xi era, while seeing a concentration of power, also has seen a rise of cronyism that has weakened many of China's institutions at a time when they desperately needed strengthening.

China has a job on its hands convincing the world that its intentions are benign and it is doing no more than any nation that feels an intense responsibility towards the security and welfare of its people. It also behoves the world to appreciate that many of China's insecurities come from historical experiences burned into the national consciousness.

To the China that behaves responsibly and with humility and generosity, yam seng!

A version of this article appeared in the print edition of The Straits Times on February 16, 2018, with the headline 'To China's 40 years of reforms, yam seng!'. Subscribe