Nov 9, 2012

China - China prepares for American pressure

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President Hu Jintao yesterday unveiled an ambitious plan for China to double its per-capita income by 2020. China's per capita income stood at US$4,260 in 2010, close to Jordan and Thailand, and less than one-tenth of the US's $47,140. The Chinese leader was speaking at the Communist Party Congress, which will run until November 14 and will pick the fifth and new generation of Chinese leaders.

The target of higher per capita income reflects China's aim to catch up with the high living standards of the West, and to reduce social tensions by providing higher incomes for the populace. But the more ambitious goal is for China to rise and challenge - financially, economically and politically - the Western domination of this planet over the past several hundred years.

Xi Jinping, designated as the party's next general secretary, will head the next generation of leaders. Mao Zedong led a people's revolution and turned China into a communist country. Deng Xiaophing charted a dual track policy of economic reform while retaining the communist regime. "It does not matter whether a cat is white or black insofar as it can catch a mouse," was one of his famous sayings.

Jiang Zemin laid down the ideal that leaders should not only represent the Communist Party, the grassroots people and the workers, but the Chinese people as a whole, of all classes.

Hu Jintao embraced scientific progress as a means to modernise China. The torch is now being handed over to Xi.

The new president will face the daunting task of leading China over the next 10 years. And he will meet his match in US President Barack Obama, who has just won re-election for a second term. Obama no longer hid his cards when - during his debate on foreign policy with Mitt Romney - he said that China was the main reason the US would be shifting its military focus to the Asia-Pacific region. He said he wants to show China that the US remains a Pacific power.

Xi is likely to undertake several crucial tasks at the same time once he settles into high office.

First, he is likely to direct China's economic policy toward more inclusive growth. The great Chinese export machine is losing steam. Europe no longer has purchasing power. Trade relations with the US are deteriorating. China needs to keep its giant economy growing through domestic demand.

Second, China will try to offset its export markets in the developed economies by expanding trade in the vast Asian continent, which still enjoys some economic dynamics.

Third, China will look for the right opportunity before turning its yuan into an international reserve currency. In doing so, the yuan will become part of a new regional financial architecture.

Fourth, China will look forward to further beefing up the Shanghai Cooperation Organisation, the little-known economic grouping whose members consist of China, Russia and the former states of the Soviet Union. Soon India, Pakistan, Iran and other countries will be joining the group.

Fifth, Asean will be pivotal to China's tie-up. Asean is currently a dollar bloc. China would like to turn the region into a yuan bloc, and encourage the regional grouping to reduce its traditional alliance with the West.

Sixth, China will be strengthening its military forces at full steam, and will be prepared for any attempt by the US at encirclement.

There will be no honeymoon period for Xi, nor is there time for him to relax. The global powers are destined to confront each other against a new geopolitical backdrop.

Thanong Khanthong 


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