CHINA UNDER THE SPOTLIGHT

“In the long run, it is development of sustainability in the economy which is
the overriding issue.”
- Jisi Wang, Dean of the School of International Studies, Peking University

 Moderator Yang Rui, anchorman on the daily “Dialogue” programme shown by CCTV 9 in China, opened by saying that keynote speaker Zbigniew Brzezinski was correct in saying on the first day of the EAMF conference that China is undergoing a profound transformation. “China looks set to be the third largest economy.”

 As a political and social target, the rule of law and social harmony are at the top of the government’s agenda, he continued, adding that the nation is posting regular double-digit growth.

 Turning to his panelists, Mr. Yang asked whether the Olympic Games would help alleviate a sky- rocketing inflation rate. Panelist Victor Gao, Director of the Chinese National Association of International Studies (CNAIS), responded. “Inflation is hard to control at 4.8%,” he said. “I do not think the Olympics are having an impact. We invested 30 billion dollars in the Olympics, plus there is a lot of new infrastructure. The preparation has really upgraded Beijing for the better.”

 Dr. Ariel Cohen, Senior research fellow for Russian and Eurasian Studies at the US-based Heritage Foundation then posed a set of questions along with his commentary. “The Olympic Games have become a symbolic event which the Chinese leadership and people see as a ‘coming out ceremony’ to celebrate China’s achievements in industrialism.

 “However, the big event is the shift of the manufacturing base of the world to China. It caused an increase in the standard of living for people, it caused a middle class; but also a deterioration of the environment in China.

 “Demand for raw materials and food is putting pressure on through higher prices and inflation.

How does China manage these things? At the same time, China is playing an increased role in this part of the world. There were ebbs and flows over thousands of years -- when it was more profitable and secure it exerted more influence around its periphery.

 “US people have a lot of problems understanding complex cultures. We need more people to understand China’s history. There is a large diaspora. People need to understand and not reduce it to very simple threats in business, and otherwise.”

 The next panelist, Jisi Wang, Dean of the School of International Studies at Peking University, was asked whether the growth of China will be achieved to the exclusion of the US, to which he responded:

 “There is a connection between China and US over many global issues – global warming, degradation in the environment, illegal immigration, SARS -- almost everything. Over Central Asia, the US and China have interests concerning separatism, extremism, terrorism. Relations between great powers in this region are basically sound and healthy.

 “The most important thing for China is to have sustainable development, including clean air, efficient energy consumption, (dealing with) global warming and many other things. The Olympics and Tibet are important, but in the long run, it is development of sustainability in the economy which is the overriding issue.”

 Yang Rui then said Zbigniew Brzezinski had indicated there has been mutual suspicion between China and Russia and that there is growing anxiety on the part of Russia. Addressing Geydar Dzhemal, Chairman of the Islamic Committee of Russia, he asked, “Do you agree or not?”

 “In my view,” came his reply, “the world economy is polarized. The economy of consumption is speculative and the US is at the heart of it. On the other pole is production, and China is the center. The latter will ultimately pose a threat to the former.”

 Victor Gao then moved to respond to the Brzezinski statement saying that Brzezinski is a good friend of China, having helped US President Jimmy Carter to establish formal relations between the US and China. “I do not agree with his mention of Russia and China yesterday. From the Chinese perspective Russia is a great country with great people. We have high respect for Russia

 “In Chinese, we have a saying: ‘Your distant relatives may not be that helpful; your immediate neighbors will be.’ Good neighbors are very important and we will keep Russia as a very important strategic partner.”

 As to relations with the US, he continued, “China is different from the US in many areas but relations between the two are the most important for China. You know the economy is growing very rapidly. Imports and exports together account for 75% of China’s GDP. The US is a major partner in China’s economic life, therefore anything that is bad for the US economy will also be bad for the Chinese. Also, China holds foreign reserves of 1.7 trillion US dollars and 70 per cent of that is in US Treasury bills.”

 Ariel Cohen returned to the China-Russia relationship noting that there are concerns in Russia about depopulation of the country’s Far East, about the possible migration of millions of Chinese into that area, along with the issue of petroleum supplies.

 “Many in Russia do not view pipelines outside Russia to and from China as a positive thing, indeed it may be a failure of Russian policy,” he said, adding that Chinese purchase of interests in Kazakhstan’s oil and gas industry “and growing interest in Caspian fields makes some people not very happy.”

 Wang Jisi responded by saying the discussion was getting too in-depth on this topic. “I tend to believe the Chinese-Russian relationship is better than most others,” he said. While ideologically they are no longer running parallel, “both are faced with pressure from the West to change; they both a want to deal with terrorism. There is a common concern about the Korean peninsula and the economic relationship is being improved.”

 Likewise, he added, they need to coordinate foreign policy issues and there are issues regarding immigration and fuel supplies to be dealt with.

 Touching on military issues in Asia, Geydar Dzhemal referred to the Shanghai group (The Shanghai Five - China, Tajikistan, Russia, Kazakhstan and Kyrgyzstan), saying it is called by westerners the Asian NATO. “It is seen as a counterbalance to eastern creep by NATO.”

 “I do not think there is any Chinese interest is being a counterbalance to NATO,” responded Wang Jisi.

 Victor Gao joined in saying that China in 1978 had foreign reserves of 500 mln dollars and now the figure is 1.7 trillion. “Deng Xiaoping said it should concentrate on growing the economy and leave the wars to Russia and US,” he said. “Stop arguing about what is capitalism or socialism -- do not worry about these issues.

 “Now China is self-sufficient in food. It is thus contributing to peace and stability in the world.”

 The session’s focus then turned to energy, and Cohen stated:.  “In order for China to continue its growth, it must have a Central Asian policy. There is a big debate about oil peaking.  China will have a big challenge, as will the US, India and everyone else.”

 Victor Gao replied that this is an issue for people in Kazakhstan and Central Asia generally to deal with. “China is growing very rapidly and needs a lot of energy, He said. “In addition to the Middle East and Africa, Australia has become a very important supplier.”

 He said that recently China had signed a US20 billion dollar contract for liquefied natural gas from Australia – the biggest such contract ever made. In addition, China and New Zealand have signed “a ground-breaking free trade agreement, the first Chinese agreement with an OECD country. Australia will follow.”

 China will depend on many countries to supply energy, including Kazakhstan, he added. “If China cannot get oil from Russia, Canada -- after Australia -- will be next.”

 The next subject raised was about China’s diplomacy in Africa and especially the Darfur situation in Ethiopia.

 Wang replied that he has learned from both US and Chinese sources that China is trying to make something happen to convince the Sudanese government that some adjustments are required. “China officially does not acknowledge this,” he said. “It doesn’t want to be seen as influencing any country’s internal affairs. China has received some recognition from the US government about this action, but not western media.”