[PPT] - International Consultants Ltd Andrew Leung Global Dynamics of the PowerPoint Presentation

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International Consultants Ltd

Andrew Leung

Global Dynamics of the China Dream and Possible Turkish-China Partnership on a Silk Road to 2023 Renaissance

Andrew K P Leung, SBS, FRSA

A presentation at the

Conference on The Post and the Past in Central Asia's Future

Cambridge University Cambridge, 14-15, March, 2014

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What’s the “China Dream” ?

Gov’t cleaner, army for people

More than American Dream

Strong China Civilized China Harmonious China Beautiful China Robert Lawrence Kuhn, New York Times, 4.6.13

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Back to the Future

Golden Age of Tang Dynasty (A.D. 618-906)

The Tang dynasty was a period of expansion, especially in trading with foreign lands. Caravan routes travelled as far as Syria for items ranging from glassware and tapestries to jasmine and other exotic herbs.

Prosperity of Song Dynasty (A.D. 960-1279) Global outreach of Ming Dynasty (A.D. 1368-1644)

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Reality check - mountains to climb

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Middle-income Trap

Most countries reaching $3,000 to $8,000 @income seem to stall in productivity and income growth

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Getting old before getting rich

In 2009 , 167 million over-60s = 1/8 of population. By 2050, - 480 million
In 2000, six workers for every over-60. By 2030, barely two.
The 4-2-1 family structure . 150 million single –child offspring faces burden of elderly support
Working age population (15-64) starts to dwindle from 2015

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Soft power deficits

U.S. Public opinion on China and Foreign Policy, Chicago Council

n Global Affairs, 10 Sept, 2012
Wars overstretched America for dubious gains. More Americans

are wary of getting involved in potentially high-cost foreign

entanglements. Majorities (both Republicans and Democrats)
ppose using U.S. troops if China invaded Taiwan (69%, up 8

points since 2004) and if North Korea invaded South Korea (56%),

A majority (53%) says that the United States should put a higher

priority on building up strong relations with traditional allies like South Korea and Japan, even if this might diminish U.S. relations with China. However, there is a substantial and growing minority (40% up from 31% in 2010) holding the opposite view.

PEW 18 September 2012, US public deeply concerned about

China's economic power. Few, except the young, see China as

trustworthy. Though most want to share leadership with China, a

majority feels that the US remaining the leading superpower would make the world more stable, with the experts believing that a strong relationship with China is important.

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Multiple “crises” demand a China 3.0

European Council for Foreign Relations (ECFR), Mark Leonard (ed.), November, 2012

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“Affluence crisis”

Harvard economist
1958 best seller
Growth at expense of poverty
Public goods neglect
2.7 m millionaires (Hurun, 2013) v 170 m < $1.25 @day

New Right – “”Marketization” New Left – bridging the wealth gap

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“Stability crisis”

Wang Qishan’s favourite read?

Extractive institutions
Crony capitalism
Princelings

Checks and balance

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“Power Crisis”

Geopolitics

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Shambaugh’s 4 conundrums

Path Dependency Soviet shadow Vested interests Aggrieved nationalism

China to remain a “Partial Power” despite consensus on reforms of (a) economic model (b) government monopoly (c) inequality (d) rule of law (e) ethnic harmony (f) political liberalization within One-Party state (g) accommodating foreign policy

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Determinants of global power

Size of economy Global dependency

2nd , 3rd, 4th, 6th, 7th, 8th top container ports

Share of global trade Trading hub Currency internationalization Military strength

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Pendulum swinging to the East

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China’s emerging Renaissance

Largest economy by 2020’s

WB, Goldman Sachs, PWC, EIU; largest trader to 126 nations v 76 for US; 6/8 top ports

Largest consumer by 2016

¼ global sales by 2022, EIU; upper middle class to grow from 14% (2012) to 54% (2022)

RMB to become a leading currency

Eclipse – Subramanian, 2011; RMB to become fully convertible by 2020

Weight matters

Macao’s GDP $77,079 - 3rd highest

Third Plenum

Market-decisive, One Child Policy changed, Rural land reform, Financial liberalisation, Green economy, Social equity, Governance

Sustainability

Environment – green energies, eco-cities, air pollution action plan; One Party state

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Largest and fastest urbanization in history

McKinsey Global Institute –

1 b in cities by 2030
221 new cities @1 m v 35 in Europe
170 mass transit systems will be built
50,000 skyscrapers = 10 NY Cites
350 m more urbanites > whole of US, by 2025
54% of urban GDP in 900 smaller cities by 2025, to

house70% population

China’s GDP will have multiplied 5 times

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RMB eclipsing the dollar as “reference currency”

"Eclipse: Living in the Shadow of China’s Economic Dominance", Arvind Subramanian, Senior Fellow, Peterson Institute for International Economics, Washington DC, 10/2012

Currency movement coefficient (CMC)
East Asia already a RMB bloc - 7 currencies out of

10 co-move 40% greater than for the dollar.

With China’s expanding global trade , a larger RMB

bloc could emerge in the mid-2030s

Directly convertible now with greenback, yen and now

Australian dollar.

RMB internationalization quickening; $, yen,

Australian dollar (5% currency reserve), GBP? HK leading offshore centre (offshore RMB interbank rate-fixing (to be aided by Qianhai) with London, Singapore , Taiwan and others vying for a share

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Turkish Connection

Early Toba tribe of Turkish-Mongol

extraction helped found China’s Northern Wei Dynasty (A.D. 386) reuniting China across the northern steppes, the Tarim basin and the North China Plain

Sino-Turkish families prominent amongst

imperial elite during Tang Dynasty (A.D. 618-906).

2B.C. to 15AD, ancient Silk Road carried

busy trade between Xi’an and Constantinople, eastern capital of Christian world; exchanges of Buddism and Islam and

f technology e.g. paper and glass
common ground between Sufism and

Daoism = willingness to deny pre-conceived notions, a kind of heuristic constructivism, and a yin-yang correlativity in which the importance of identities and understanding is stressed, including interaction with other countries and cultures

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Strategic bottleneck for Eurasian energy transit

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Rising economic power

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Turkey’s 2023 Ambitions

Centenary Renaissance - within the world’s top ten economies by 2023 Infrastructure - Eurasian Tunnel 2013 Aviation Energy diversification Financial Centre

Defense and Aerospace

Ship Building

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Politics and Diplomacy

Support + Differences - Support for One China

Policy; Uighur riots in Xinjiang in July 2009, “near genocide” condemnation - Post-USSR - Turkey’s de facto guardianship of Turkic peoples in Caucasus and Central Asia; Syria - China sides with Russia, while Turkey with NATO and US

High-level visits: President Gul’s 2-day visit to

Xi'an, June, 2009; Premier Wen 3-day official visit to Turkey, October, 2010; Davutoglu to China from October 28 to November 4, 2010; Xi’s visit to Turkey, February 2012 and Erdoğan visited China April 2012, the first by Turkish PM in 27 years.

Cultural exchanges - “Year of China” in Turkey

2012 and “Year of Turkey” in China from March, 2013

Projects - China Railway Construction Corporation

(CRSS) constructing high-speed rail link between Ankara and Istanbul

Military exchanges - PLAAF in a NATO aerial

military exercise, code named “Anatolian Eagle” in Konya, Sept-Oct 2010

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New Silk Road through Central Asia

Energy Security - pipeline network linking

Central Asia (Kazakhstan and Turkmenistan) and in southwest Asia (Pakistan and Myanmar); potential for Afghanistan

Shanghai Cooperation Organization - Central

Asian states + India, Pakistan, Iran, Afghanistan, and Mongolia (Observers); Turkey, Belarus, and Sri Lanka (Dialogue Members); and ASEAN, CIS and Turkmenistan (Guest Attendees)

Eurasian rail network - First Eurasian Land

Bridge - Russia’s Trans-Siberian Railway across 13,000 km. Second Eurasian Land Bridge - 10,900 km including 4100 km in China, ancient Silk Road routes, linking Kazakhstan; onwards via Russia and Belarus over Poland to rest of EU

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Future China-partnership opportunities

Third Eurasian Land Bridge - SZ to Kunming; to

Myanmar, Bangladesh, India, Pakistan and Iran, across Turkey to Rotterdam. Crossing 20 countries in Asia and Europe; 15,000 km = 3,000 to 6,000 km < sea via Indian Ocean through Malacca Straits; Branch line from Turkey, to Syria, Palestine, and Egypt, connecting China to Africa.

Port of Bosphorus
Customs Union of Belarus, Kazakhstan, and Russia

effective January 1, 2010. Infrastructural and logistical investments along 5,000- km highway through Kazakhstan linking China to Europe. (Putin’s Eurasian Union dream)

Resources – Kazakhstan (oil and precious metals);

Uzbekistan (agriculture, gold and natural gas (1% of global reserve); Tajikistan (massive water resources - 4% of the world’s hydroelectric potential plus abundance of minerals : antimony, mercury, zinc, silver and rock salt)

Istanbul as a regional financial centre - RMB

internationalization

Africa - BRICS development bank, SEZs
Tourism

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