Can You Smell What the Chinese Are Cooking?

Less than a week before the game-changing U.S. presidential election, the real heart of the geopolitical and geoeconomic action is virtually invisible to the outside world.

We’re talking about the fifth plenum of the 19^th Chinese Communist Party (CPC) Central Committee, which started this past Monday in Beijing.

The plenum congregates the 200 members – and another 100 alternate members – of the civilization-state’s top decision-making body: the equivalent, in Western liberal democracy terms, of the Chinese Congress.

The outline of what will be the 14^th Chinese Five-Year-Plan (2021-2025) will be announced with a communiqué at the end of the plenum this Thursday. Policy details will be streaming in the next few weeks. And everything will be formally approved by the National People’s Congress (NPC) in March 2021.

For all practical purposes, this should be regarded as what China’s leadership is really thinking.

Meet “China’s system”

President Xi has been quite busy, delivering an extensive work report; a draft of the five-year plan; and a full outline of China’s top targets all the way to 2035.

Xi has been forcefully stressing a “dual circulation” strategy for China; to increase the focus on the domestic economy while balancing it with foreign trade and investment.

Actually a better definition, translated from Mandarin, is “double development dynamics”. In Xi’s own words, the aim is to “facilitate better connectivity between domestic and foreign markets for more resilient and sustainable growth”.

One spectacular achievement we already know about is that Xi’s goal for China to reach the status of a “moderately prosperous society” has been met in 2020, even under Covid-19. Extreme poverty has been eliminated.

The next step is to deal long-term with the absolutely critical issues of crisis of global trade; less demand for Chinese products; and varying degrees of volatility caused by the unstoppable rise of China.

The key priority for Beijing is the domestic economy – in tandem with reaching key tech targets to enhance China’s high-quality development. That implies building high-end, integrated supply chains. And then there’s the tortuous road of implementing necessary institutional reforms.

Crucially, China’s Ministry of Industry and Information Technology is “guiding” companies to invest in core technology; that means semiconductors, 5G applications, the Internet of Things (IoT), integrated circuits, biomedicine.

So everything is, once again, all about the Chip War – which is at the heart of AI, 5G, supercomputing, quantum computing, material science, biotechnology, new energy vehicles and space science.

China’s leadership is very much aware that the real high stakes revolve around the next generation of chip technology.

Enter the concept of China’s system: or how to fight the “U.S.-initiated cold war in high technology”.

“China’s system” has been developed by IT expert Ni Guangnan.

It aims to “replace U.S. technologies in core areas including the key IT infrastructure, in which the U.S.-led IOE system, an acronym for an IT network based on major three supplies – IBM, Intel and Oracle – have the monopoly. With self-developed servers, database and storage, the system could be based on chipsets with lower performance with no need for 14-nanometer (nm) or 7-nanometer chip fabrication – prime targets of the U.S.-led crackdown.”

Various calculations in China roughly agree that by the end of this year the economy is set to be 72% the size of the U.S.’s. The State Council forecasts that the Chinese economy will overtake the EU in 2027 and the U.S. by 2032.

But if measured by PPP (purchasing power parity), as both the IMF and The Economist have already admitted, China is already the world’s largest economy.

The fifth plenum once again reiterates all the goals inbuilt in Made in China 2025. But there’s more: an emphasis on the “2035 vision” – when China should be positioned as a global tech leader.

The “2035 Vision” concerns the halfway point between where we are now and the ultimate target in 2049. By 2035 China should be a fully modernized, socialist nation and a superpower especially in science and technology and Defense.

Xi had already stressed it way back in 2017: China will “basically” realize “socialist modernization” by 2035. To get there, the Politburo is seeking an extremely ambitious synthesis of “scale, speed, quality, efficiency and safety”.

Beyond Westphalia

Considering that the Trump administration has been engaged on a relentless offensive since May 2018, it was only since last July that the CCP leadership has been consistently preparing China for what it considers a lengthy and fierce struggle with the U.S.

That has elicited quite a few comparisons with what the Little Helmsman Deng Xiaoping referred about Mao Zedong in 1938. Mao at the time said that China should “be on the defensive first before gathering enough strength to fight to a strategic stand-off and eventually win the ‘protracted war’” against the Japanese invasion.

Now we have a weiqi strategy all over again. Beijing will only launch what amounts to a concerted counterpunch across the chessboard when it’s able to close the tech gap and establish its own domestic and global supply chains completely independent from the U.S.

Beijing will need a major soft power P.R. operation to show the world how its drive in science and technology is aimed as a global good, with all humanity benefiting, irrespective of nations. The Chinese Covid-19 vaccine should be setting the example.

In a recent podcast discussing one of my latest columns on Lanxin Xiang’s book The Quest for Legitimacy in Chinese Politics,

Brazilian China expert Elias Jabbour came up with a stunning formulation.

Jabbour echoed top Chinese scholars when he stressed China won’t behave as an aggressive Westphalian state: “The subversion of Westphalia by China came from the fact it incorporated the Russian Revolution to 1949. China is laying out for the future an order that may subvert Westphalia.”

So what we have here is that the foremost concept of Xi’s China – whose best English translation reads as “community with a shared future for humanity” – is actually the subversion of Westphalia. A subversion from within.

Jabbour reminds us that when Mao said that only socialism may save China, he meant save it from the treaty of Westphalia, which facilitated the dismemberment of China during the “century of humiliation.”

So in the end a strategic marriage between Marx and Confucius in Xi’s China is more than feasible, transcending geopolitics as we know it, which was born as a national ideology in France, Germany and Britain.

It’s as if Xi was trying, as Jabbour noted, to “go back to original Marxism as a leftist Hegelianism”, geared towards internationalism, and mixing it with the Confucius view of tianxa, “all under heaven”. That’s the master idea behind “community with a shared future for humanity.”

One can always dream that another world is indeed possible: think of a cultural renaissance of the overwhelming majority of the Global South, with a fruitful cross-fertilization of China and Asian economies, the evolving decolonization struggle of Latin America, and the weight of the African diaspora.

But first, the next Chinese five-year plan has got to roll.