There is a new book about the rise of the People’s Republic of China (PRC). Can you guess the colour of its cover?
Bright red books have been understandably mocked by the China-watcher community. Yet we should cut the authors some slack as this is most certainly the publishers’ decision. They know how to market a book which appeals to the masses, no matter what the sneering specialists might say.
Book cover of China: Engage! Avoid the New Cold War. Photo: Gray Sergeant.
I feel somewhat relieved to discover that volumes bound in deep red are a minority amongst my small China collection, and those that do opt for this cliché colouring, Odd Arne Westad’s Restless Empire and Jonathan Fenby’s Tiger Head, Snake Tails to mention just two, are both thoroughly well researched and sound.
The new book by the former leader of the British Liberal Democrat (Lib Dem) party, and former Business Secretary, Sir Vince Cable takes this colouring to a whole new level. The cover of China: Engage! Avoid the New Cold War features a colossal red wave hurtling towards the West’s ladies of liberty. Striking enough, don’t you think?
The fact that the wave, as it breaks, morphs into the Chinese national flag and a roaring tiger only adds to the absurdity. The designer should have chucked in a few raging dragons for good measure – why hold back? Yet it is the book’s content which is the real problem.
While concise and up to date, in that it covers the early stages of the coronavirus outbreak, as well as easy to read, the book has its drawbacks. Some incredibly important topics are skimmed over and simplified.
More frustrating still , those areas where research has actually been undertaken remain, like a dodgy Lib-Dem election leaflet bar chart, free from citations – leaving the reader unable to discover the source of the facts. The book would have hugely benefited from the addition of some referencing, and a few more edits for that matter. And, well, a bit more research.
Depending on which chapter you read, Cable identifies either what he calls “geo-economics” or technology battles as being the main driver of the “new Cold War.” The first three main chapters, which make up half the book, are devoted to these areas, in which he argues that the People’s Republic is either already on top or soon to emerge as the world’s number one.
By any meaningful definition of economic size China is already the biggest in the world and more importantly, Cable argues, the trends continue to favour it over the United States. He pushes back against the doom-mongers whom he believes have continually underestimated China’s ability to adapt, innovate and reform.
Concerns about the country’s aging population, declining labour force, and high levels of debt are swiftly addressed. Likewise, not only is China making extraordinary advances in telecommunications, Artificial Intelligence and big data but Western security concerns about its use of such technologies are largely unfounded, according to Cable.
Vince Cable. File photo: Nick Clegg, via Wikicommons.
The argument is clear. China’s rise is unchallengeable and we, the liberal democratic West, must learn to live with this reality. The current rush to take sides, Cable believes, is not only unwise but dangerous. Yet despite advocating fence-sitting, a position a Lib-Dem would know a thing or two about, Cable’s true sympathies ooze from every page.
For starters, by focusing on economics Cable treads on fairly safe ground: only the most observant China-watching economist would dare quibble with his predictions. He relegates more contentious questions such as talk of Chinese expansionism, which he believes is exaggerated, and ideological battles, which he brands as “virtue signalling”, to two significantly shorter, and sketchier, chapters.
Only three short paragraphs are devoted to the South China Sea, even though Cable acknowledges the international illegality of Beijing’s claims to the territorial waters surrounding “reclaimed rocks and islets.” Presumably he means artificial islands decked out with airstrips and missile systems. Yet such details, it would seem, are ultimately inconsequential as Cable reassures us that China has “no incentive to disrupt sea lanes.”
US military air crafts on South China Sea. File Photo: Seaman Tomas Compian via USGov.
Even fewer words are then devoted to Taiwan, an area where Cable himself acknowledges that “China threatens military aggression”. Stranger still, the accompanying paragraph seeks to reassure us again despite this opening claim. He opts for the phrase “restoration of Taiwan” rather than annexation to describe Beijing’s goals. China, Cable claims, has been “highly pragmatic” by welcoming Taiwanese tourists and investors. Moreover, he notes, General Secretary Xi Jinping’s position is merely a continuation of a stance held by previous Chinese leaders.
While there is truth to the last claim it ignores Xi’s assertion that the Taiwan issue cannot be left for another generation to resolve. Nor does it acknowledge China’s ramped-up military manoeuvres against the island and attempts to isolate Taipei on the world stage since 2016 (pragmatism… my arse!). Clearly, such details were too nuanced to fit into a few sentences.
More worrying analysis is to be found in the concluding lines of this very short section. Here the Taiwanese themselves and their American allies are singled out for blame. Ultimately, in Cable’s mind, they are the provocateurs. Which demonstrates that his understanding of current cross-strait relations is as shaky as his understanding of Washington’s Taiwan policy.
While you can blame the United States all you like for shaking up the international economic order in recent years, and this book repeatedly does, you cannot pin the blame on the Trump administration and least of all on President Tsai Ing-wen for rising tensions in the Taiwan Strait.
Tsai Ing-wen. Photo: Office of the President of Taiwan, via Flickr.
It may be a small point but we should tip our hats to Cable for, on two occasions, grouping Taiwan in a list of “countries”. While this may have been inadvertent it nevertheless treats the Taiwanese with a welcome degree of respect which he, sadly, does not show to Tibetans or Uighurs.
In a section presumably designed to address us liberals and social democrats, patronisingly described as people “who feel the need to make a statement on ‘human rights,” he regurgitates the Chinese Communist Party’s (CCP) line without comment. Chinese authorities, it is asserted, “have no problem with accommodating religions,” the problem only lies with minorities who seek self-determination (tell that to Xinjiang’s Hui communities). China, it would seem, merely wants to prevent a bloody breakup à la Yugoslavia.
Moreover, whatever the wrongs which occur in these regions, Cable – now speaking for himself – asserts that the West has already accepted Chinese sovereignty over these areas so should not cause offence by criticising Beijing’s internal policies.
This dismissal of a values-based foreign policy is more than just a former business secretary being a practitioner of realpolitik. As I wrote earlier, Cable’s sinister sympathies ooze from the pages. You cannot help but notice his admiration for the CCP’s system which he describes as a “competent technocracy” delivering “continuity, cohesion and discipline.” It is a system which he credits with promoting the public good in the realms of climate change and pandemic management. Although he does not substantiate such contestable claims, his main point is clear: such public goods are not even pursued by the chaotic Trumpian populists who have been brought to power via democratic votes.
Xi Jinping. File photo: Kremlin.
Occasionally his fawning on the communists in Beijing is masked with mystical talk of a new dynasty and the mandate of heaven. This, after all, is a much more palatable way to discuss dictatorship and authoritarianism. Yet most of the time he plays it straight and clearly articulates the CCP’s narrative in 21st century language.
There is a wide range of political systems, we are told, with varying degrees of political participation. We are also informed that in China there is a “different meaning of human rights.” In addition, Cable reminds us that dissent is actually allowed in China providing it is localised, providing it is non-political, and providing, of course, it is not organised or part of a movement. So that’s settled, then – quit your whining!
What I ought to remind you here is that this is the former leader of the Liberal Democrats we are discussing. You would be forgiven for forgetting this, given the book’s pooh-poohing of both liberal and democratic values which it suggests are not conducive for stability or wise governance. Both of which, the book argues, are products of “the Chinese model.”
Hongkongers would only need to read the few pages dealing with their own struggle to confirm this assessment of Cable’s view. This part begins by telling readers that it would have been “very understandable” if Beijing had just annexed Hong Kong. It brushes aside the arrest of “some democratic campaigners” and the tighter controls over the media and freedom of expression underthe new National Security Law, and accuses the protesters of backing the CCP into a corner. It ends by discussing, in much greater detail, the city’s economic prospects going forward.
It is no surprise that Cable retreats to his economic comfort zone in his discussion of Hong Kong and of China’s rise as a whole. After all, he regards the whole situation as a fait accompli. The People’s Republic of China has risen and will continue to rise, and the West just needs to get on board and make the most of the big opportunities on offer. It is as simple as that.
In this sense, reading China: Engage!, or at least the first few chapters, is a good intellectual challenge to those of us who advocate a values-based foreign policy. The rest, although poorly researched, should be read with concern.
While it should be unremarkable that a former business secretary advocates doing business, it is surprising to hear a Liberal Democrat giving succour to the illiberal undemocratic “Chinese model”. Clearly, the allure of China and its authoritarian system is much greater than many of us feared.
Chris Patten. Photo: Tom Grundy/HKFP.
Then again, maybe Sir Vince is just crassly currying favour with Beijing. He would not be the first former high-ranking British parliamentarian to do so. In 1993, Chris Patten, then Governor of Hong Kong, was bluntly advised by the former Labour Prime Minister Lord Callaghan not to martyr himself doing much about democracy or the rule of law prior to the handover.
Lord Callaghan, incidentally, was on his way to a meeting of the “globally illustrious” in Shanghai, a fact which Patten later commented on in his book East and West:
“It is the sort of trip all of us in politics hope will arrive at regular intervals during our years of retirement – the chance to exchange with our ageing peers a few views from the summit about what is happening down on the plain before the obituary columns take us to their bosoms.”
I look forward to seeing the line-up for the next meeting of the Anglo-Chinese Golden Era Forum for Win-Win Cooperation and Mutual Understanding… or whatever they call it.
FORMER LIBERAL DEMOCRAT LEADER VINCE CABLE ON HIS NEW BOOK “CHINA: ENGAGE!”
VINCE CABLE, FORMER LEADER OF THE LIBERAL DEMOCRATS, TALKS TO PAUL FRENCH ABOUT HIS BOOK “CHINA: ENGAGE! AVOID THE NEW COLD WAR”
Vince Cable was the long-serving MP for Twickenham and leader of the Liberal Democrats from 2017 to 2019. Cable also served in the Cabinet as Secretary of State for Business, Innovation and Skills from 2010 to 2015. Now he has turned his attention to China, writing “China: Engage! Avoid the New Cold War” (Bite-Sized Books, 2020), a considered, 100-page appeal to engage commercially with China. Paul French spoke with Cable about China’s economy, some possible bumps in the country’s economic road ahead, and the current ethical implications of doing business with China.
In China: Engage! you identify China’s ageing population as a key threat to continued economic growth, and that China must move up the productivity league through innovation and entrepreneurship. Despite some examples in AI and the internet, can you point us to some other examples of innovative entrepreneurship?
There is a demographic issue facing China, which has a declining work force and ageing population without yet becoming rich, unlike Japan and Western Europe: one dimension of the Middle Income Trap. There has to be productivity growth. Some comes from greater efficiency in SOEs, if the government is willing to push controversial rationalisation as in the Zhu Rongji days. There are also some highly innovative firms making world class technological progress: the e-commerce market where we are seeing an integration of retail sales, pay and social media for example. Huawei’s problem in the USA is that it was ahead of the competition in 5G.
Despite the levels of what you term ‘dodgy debt’ remaining stubbornly high, you argue it has largely been offloaded onto the state. Given the fear of slowing investment leading to reduced growth, unemployment and slower consumer spending, how much questionable debt can the state absorb before it becomes a real problem?
‘Dodgy debt’ was my crude reference to a lot of the commercial debt advanced in the ‘shadow banking’ sector. To use Tom Orlik’s metaphor, this is the bubble that hasn’t burst. A lot of Westerners were predicting a crash and/or a Japanese-style period of debt deflation. It hasn’t happened. One factor is that the Chinese state is the lender of last resort, and China’s sovereign debt is at model levels. Other financial techniques – debt-equity swaps; refinancing of loans; write-offs – have been used to manage the problem. But the continued reliance on debt-financed economic stimulus to support growth via often wasteful projects (which don’t pay for themselves) means that the problem of debt hasn’t gone away.
The successful emergence of a consumer-weighted economy is to be welcomed, but if the economy slows/stalls could we not see a scenario of grossly overextended consumers with large mortgages, loans and personal credit debt accruing? And could this be a threat to social stability?
So far Chinese consumers haven’t been overburdened by debt. Consumer credit is relatively underdeveloped and the new ‘social credit’ system is designed in part to prevent debt delinquency becoming a problem.
Some estimates, both from within and without China, see a stalling in the growth of the middle class (household income of £17,500 per annum/30 million urban households). If true, is China not already in the Middle Income Trap and won’t those just below perhaps feel frustrated and excluded from the ‘China Dream’?
The warnings about a Middle Income Trap have been around for much of the last decade and are recognised by the government. The parallels with middle-income countries like Argentina, Russia and South Africa are however very strained. China’s issues are distinct. I think it is more useful to think in terms of bulls vs bears; optimists vs pessimists. The bulls have won every argument so far but there is no guarantee of future success. Perhaps the best and most coherent statement of the ‘bears’ argument is George Magnus’s “Red Flags” which identifies the key challenges: demography; debt and unproductive investment; and the difficulty of getting real innovation in a controlled and repressive environment. I am, nevertheless, a ‘bull’.
You mention the US becoming more aggressive towards ‘the threat of Chinese technological competition’ referencing moves against Huawei, TikTok, WeChat etc. How do you view the UK’s reactions to Huawei in telecoms and CGN in nuclear?
The British u-turn on Huawei was undignified and taken under pressure of American sanctions rather than by choice. The old relationship in the 3G/4G worlds worked well. Despite complaints about security risks they were managed. When 5G had to be confronted, the May government reached a sensible compromise keeping Huawei except in the core functions where theoretically Huawei could get a ‘back-door’ into secure and sensitive systems. But with the advent of US sanctions, the government was faced with the difficulty of not being able to guarantee that all China-sourced components would be secure. Then the US pressed for all Huawei legacy systems to be ripped out at great cost. For the UK, the ‘special relationship’ took precedence over the real costs of removing Huawei from the system and not being able to use Huawei for 5G.
The British u-turn on Huawei was undignified and taken under pressure of American sanctions rather than by choice
You note that it might become more difficult for some foreign companies to do business in Hong Kong with the new National Security Law. Do you also think that many companies with CSR commitments as well as investment funds with ethical/moral investment guidelines will find issues such as Hong Kong and Xinjiang highly problematic and a barrier to them operating or investing in future?
The Hong Kong situation will depend on how the Chinese authorities now treat the overseas private sector. If there are cases of interference with, say, reporting on economic issues or if court cases can no longer be seen as immune from political pressure, the trickle of companies leaving Hong Kong for Singapore and Tokyo will grow to deluge proportions. Companies using Xinjiang raw materials and final products are going to face pressure from NGOs and anti-China political groups on the political left and right. Some will feel the need to make CSR statements on the issue. What makes it more difficult for companies is that some in Western governments want to increase pressure on China as part of a ’new cold war’ and they are likely to continue to fan the flames of hostile public opinion.
November 22, 2023
Edge Hill University will host former Liberal Democrat leader Sir Vince Cable for an In Conversation event, exploring his career as a two-time party leader, Cabinet Minister, and noted author.
Sir Vince was Liberal Democrat leader during highs and lows. He led the party to excellent results in the local and European elections of 2019, signing off on the party’s famous “B****cks to Brexit” slogan. He also saw and experienced the losses of 2015 and the failure of the ‘Remain Campaign’.
In 2010 when the Coalition was formed, Sir Vince was one of the five Lib Dems in Cabinet, being appointed as Business Secretary and President of the Board of Trade, staying in post for the whole Parliament. After losing his Twickenham seat in 2015, he bounced back, being re-elected in the 2017 snap election. Sir Vince stood down in 2019 and saw his successor, Munira Wilson, hold the seat.
The free In Conversation event takes place on Tuesday 28 November 6-7.30pm at Edge Hills Ormskirk campus. To find out more and book a place visit edgehill.ac.uk/in-conversation-with-sir-vince-cable.
Politics Programme Lead Paula Keaveney said: “Sir Vince’s career has spanned the highs and lows, giving him unrivalled experience of everything politics can throw at you. He’s gone from the heights of power in the Coalition Government to leading his party through challenges and defeats.
“His first-hand experiences of recent political history and perspective on current events are sure to be insightful and inspirational for our students and everyone attending this event.”
Sir Vince is recognised as a prescient expert on the economy as one of the few who forecasted the credit crunch, as he explains in his books The Storm and After the Storm.
Since leaving Parliament, Sir Vince has written more books and has developed an interest in the geopolitics of China. Two of his recent books discuss the need to engage with China – The China Conundrum and The Coalition years – Partnership and Politics in a Divided Decade. This latter work gives his partner Rachel’s perspective as well as his own.
As a politician, Sir Vince has wide-ranging experience, from grassroots campaigning to media commentator. Before his political career, he worked in industry as a civil servant, diplomat and university lecturer. He became Chief Economist at Shell, which provided highly relevant expertise for his Parliamentary work.
Discover more about Edge Hill’s new politics courses, including BA (Hons) Politics and International Relations, BSc (Hons) History and Politics and LLB (Hons) Law and Politics.
November 22, 2023
