Understanding the rise of China

Speaking at a TED Salon in London, economist Martin Jacques asks: How do we in the West make sense of China and its phenomenal rise? The author of "When China Rules the World," he examines why the West often puzzles over the growing power of the Chinese economy, and offers three building blocks for understanding what China is and will become.

The world is changing

with really remarkable speed.

If you look at the chart at the top here,

you'll see that in 2025,

these Goldman Sachs projections

suggest that the Chinese economy

will be almost the same size as the American economy.

And if you look at the chart

for 2050,

it's projected that the Chinese economy

will be twice the size of the American economy,

and the Indian economy will be almost the same size

as the American economy.

And we should bear in mind here

that these projections were drawn up

before the Western financial crisis.

A couple of weeks ago,

I was looking at the latest projection

by BNP Paribas

for when China

will have a larger economy

than the United States.

Goldman Sachs projected 2027.

The post-crisis projection

is 2020.

That's just a decade away.

China is going to change the world

in two fundamental respects.

First of all,

it's a huge developing country

with a population of 1.3 billion people,

which has been growing for over 30 years

at around 10 percent a year.

And within a decade,

it will have the largest economy in the world.

Never before in the modern era

has the largest economy in the world

been that of a developing country,

rather than a developed country.

Secondly,

for the first time in the modern era,

the dominant country in the world --

which I think is what China will become --

will be not from the West

and from very, very different civilizational roots.

Now, I know it's a widespread assumption in the West

that as countries modernize,

they also westernize.

This is an illusion.

It's an assumption that modernity

is a product simply of competition, markets and technology.

It is not. It is also shaped equally

by history and culture.

China is not like the West,

and it will not become like the West.

It will remain in very fundamental respects

very different.

Now the big question here is obviously,

how do we make sense of China?

How do we try to understand what China is?

And the problem we have in the West at the moment, by and large,

is that the conventional approach

is that we understand it really in Western terms,

using Western ideas.

We can't.

Now I want to offer you

three building blocks

for trying to understand what China is like,

just as a beginning.

The first is this:

that China is not really a nation-state.

Okay, it's called itself a nation-state

for the last hundred years,

but everyone who knows anything about China

knows it's a lot older than this.

This was what China looked like with the victory of the Qin Dynasty

in 221 B.C. at the end of the warring-state period --

the birth of modern China.

And you can see it against the boundaries of modern China.

Or immediately afterward, the Han Dynasty,

still 2,000 years ago.

And you can see already it occupies

most of what we now know as Eastern China,

which is where the vast majority of Chinese lived then

and live now.

Now what is extraordinary about this

is, what gives China its sense of being China,

what gives the Chinese

the sense of what it is to be Chinese,

comes not from the last hundred years,

not from the nation-state period,

which is what happened in the West,

but from the period, if you like,

of the civilization-state.

I'm thinking here, for example,

of customs like ancestral worship,

of a very distinctive notion of the state,

likewise, a very distinctive notion of the family,

social relationships like guanxi,

Confucian values and so on.

These are all things that come

from the period of the civilization-state.

In other words, China, unlike the Western states and most countries in the world,

is shaped by its sense of civilization,

its existence as a civilization-state,

rather than as a nation-state.

And there's one other thing to add to this, and that is this:

Of course we know China's big, huge,

demographically and geographically,

with a population of 1.3 billion people.

What we often aren't really aware of

is the fact

that China is extremely diverse

and very pluralistic,

and in many ways very decentralized.

You can't run a place on this scale simply from Beijing,

even though we think this to be the case.

It's never been the case.

So this is China, a civilization-state,

rather than a nation-state.

And what does it mean?

Well, I think it has all sorts of profound implications.

I'll give you two quick ones.

The first is that

the most important political value for the Chinese

is unity,

is the maintenance

of Chinese civilization.

You know, 2,000 years ago, Europe:

breakdown -- the fragmentation of the Holy Roman Empire.

It divided, and it's remained divided ever since.

China, over the same time period,

went in exactly the opposite direction,

very painfully holding this huge civilization,

civilization-state, together.

The second

is maybe more prosaic,

which is Hong Kong.

Do you remember the handover of Hong Kong

by Britain to China in 1997?

You may remember

what the Chinese constitutional proposition was.

One country, two systems.

And I'll lay a wager

that barely anyone in the West believed them.

"Window dressing.

When China gets its hands on Hong Kong,

that won't be the case."

Thirteen years on,

the political and legal system in Hong Kong

is as different now as it was in 1997.

We were wrong. Why were we wrong?

We were wrong because we thought, naturally enough,

in nation-state ways.

Think of German unification, 1990.

What happened?

Well, basically the East was swallowed by the West.

One nation, one system.

That is the nation-state mentality.

But you can't run a country like China,

a civilization-state,

on the basis of one civilization, one system.

It doesn't work.

So actually the response of China

to the question of Hong Kong --

as it will be to the question of Taiwan --

was a natural response:

one civilization, many systems.

Let me offer you another building block

to try and understand China --

maybe not sort of a comfortable one.

The Chinese have a very, very different

conception of race

to most other countries.

Do you know,

of the 1.3 billion Chinese,

over 90 percent of them

think they belong to the same race,

the Han?

Now, this is completely different

from the world's [other] most populous countries.

India, the United States,

Indonesia, Brazil --

all of them are multiracial.

The Chinese don't feel like that.

China is only multiracial

really at the margins.

So the question is, why?

Well the reason, I think, essentially

is, again, back to the civilization-state.

A history of at least 2,000 years,

a history of conquest, occupation,

absorption, assimilation and so on,

led to the process by which,

over time, this notion of the Han emerged --

of course, nurtured

by a growing and very powerful sense

of cultural identity.

Now the great advantage of this historical experience

has been that, without the Han,

China could never have held together.

The Han identity has been the cement

which has held this country together.

The great disadvantage of it

is that the Han have a very weak conception

of cultural difference.

They really believe

in their own superiority,

and they are disrespectful

of those who are not.

Hence their attitude, for example,

to the Uyghurs and to the Tibetans.

Or let me give you my third building block,

the Chinese state.

Now the relationship

between the state and society in China

is very different from that in the West.

Now we in the West

overwhelmingly seem to think -- in these days at least --

that the authority and legitimacy of the state

is a function of democracy.

The problem with this proposition

is that the Chinese state

enjoys more legitimacy

and more authority

amongst the Chinese

than is true

with any Western state.

And the reason for this

is because --

well, there are two reasons, I think.

And it's obviously got nothing to do with democracy,

because in our terms the Chinese certainly don't have a democracy.

And the reason for this is,

firstly, because the state in China

is given a very special --

it enjoys a very special significance

as the representative,

the embodiment and the guardian

of Chinese civilization,

of the civilization-state.

This is as close as China gets

to a kind of spiritual role.

And the second reason is because,

whereas in Europe

and North America,

the state's power is continuously challenged --

I mean in the European tradition,

historically against the church,

against other sectors of the aristocracy,

against merchants and so on --

for 1,000 years,

the power of the Chinese state

has not been challenged.

It's had no serious rivals.

So you can see

that the way in which power has been constructed in China

is very different from our experience

in Western history.

The result, by the way,

is that the Chinese have a very different view of the state.

Whereas we tend to view it as an intruder,

a stranger,

certainly an organ

whose powers need to be limited

or defined and constrained,

the Chinese don't see the state like that at all.

The Chinese view the state

as an intimate -- not just as an intimate actually,

as a member of the family --

not just in fact as a member of the family,

but as the head of the family,

the patriarch of the family.

This is the Chinese view of the state --

very, very different to ours.

It's embedded in society in a different kind of way

to what is the case

in the West.

And I would suggest to you that actually what we are dealing with here,

in the Chinese context,

is a new kind of paradigm,

which is different from anything

we've had to think about in the past.

Know that China believes in the market and the state.

I mean, Adam Smith,

already writing in the late 18th century, said,

"The Chinese market is larger and more developed

and more sophisticated

than anything in Europe."

And, apart from the Mao period,

that has remained more or less the case ever since.

But this is combined

with an extremely strong and ubiquitous state.

The state is everywhere in China.

I mean, it's leading firms --

many of them are still publicly owned.

Private firms, however large they are, like Lenovo,

depend in many ways on state patronage.

Targets for the economy and so on

are set by the state.

And the state, of course, its authority flows into lots of other areas --

as we are familiar with --

with something like the one-child policy.

Moreover, this is a very old state tradition,

a very old tradition of statecraft.

I mean, if you want an illustration of this,

the Great Wall is one.

But this is another, this is the Grand Canal,

which was constructed in the first instance

in the fifth century B.C.

and was finally completed

in the seventh century A.D.

It went for 1,114 miles,

linking Beijing

with Hangzhou and Shanghai.

So there's a long history

of extraordinary state infrastructural projects

in China,

which I suppose helps us to explain what we see today,

which is something like the Three Gorges Dam

and many other expressions

of state competence

within China.

So there we have three building blocks

for trying to understand the difference that is China --

the civilization-state,

the notion of race

and the nature of the state

and its relationship to society.

And yet we still insist, by and large,

in thinking that we can understand China

by simply drawing on Western experience,

looking at it through Western eyes,

using Western concepts.

If you want to know why

we unerringly seem to get China wrong --

our predictions about what's going to happen to China are incorrect --

this is the reason.

Unfortunately, I think,

I have to say that I think

attitude towards China

is that of a kind of little Westerner mentality.

It's kind of arrogant.

It's arrogant in the sense

that we think that we are best,

and therefore we have the universal measure.

And secondly, it's ignorant.

We refuse to really address

the issue of difference.

You know, there's a very interesting passage

in a book by Paul Cohen, the American historian.

And Paul Cohen argues

that the West thinks of itself

as probably the most cosmopolitan

of all cultures.

But it's not.

In many ways,

it's the most parochial,

because for 200 years,

the West has been so dominant in the world

that it's not really needed

to understand other cultures,

other civilizations.

Because, at the end of the day,

it could, if necessary by force,

get its own way.

Whereas those cultures --

virtually the rest of the world, in fact,

which have been in a far weaker position, vis-a-vis the West --

have been thereby forced to understand the West,

because of the West's presence in those societies.

And therefore, they are, as a result,

more cosmopolitan in many ways than the West.

I mean, take the question of East Asia.

East Asia: Japan, Korea, China, etc. --

a third of the world's population lives there.

Now the largest economic region in the world.

And I'll tell you now,

that East Asianers, people from East Asia,

are far more knowledgeable

about the West

than the West is about East Asia.

Now this point is very germane, I'm afraid,

to the present.

Because what's happening? Back to that chart at the beginning,

the Goldman Sachs chart.

What is happening

is that, very rapidly in historical terms,

the world is being driven

and shaped,

not by the old developed countries,

but by the developing world.

We've seen this

in terms of the G20

usurping very rapidly the position of the G7,

or the G8.

And there are two consequences of this.

First, the West

is rapidly losing

its influence in the world.

There was a dramatic illustration of this actually a year ago --

Copenhagen, climate change conference.

Europe was not at the final negotiating table.

When did that last happen?

I would wager it was probably about 200 years ago.

And that is what is going to happen in the future.

And the second implication

is that the world will inevitably, as a consequence,

become increasingly unfamiliar to us,

because it'll be shaped by cultures and experiences and histories

that we are not really familiar with,

or conversant with.

And at last, I'm afraid -- take Europe;

America is slightly different --

but Europeans by and large, I have to say,

are ignorant,

are unaware

about the way the world is changing.

Some people -- I've got an English friend in China,

and he said, "The continent is sleepwalking into oblivion."

Well, maybe that's true,

maybe that's an exaggeration.

But there's another problem which goes along with this --

that Europe is increasingly out of touch with the world --

and that is a sort of

loss of a sense of the future.

I mean, Europe once, of course, once commanded the future

in its confidence.

Take the 19th century, for example.

But this, alas, is no longer true.

If you want to feel the future, if you want to taste the future,

try China -- there's old Confucius.

This is a railway station

the likes of which you've never seen before.

It doesn't even look like a railway station.

This is the new Guangzhou railway station

for the high-speed trains.

China already has a bigger network

than any other country in the world

and will soon have more than all the rest of the world put together.

Or take this: now this is an idea,

but it's an idea to be tried out shortly

in a suburb of Beijing.

Here you have a megabus,

on the upper deck carries about 2,000 people.

It travels on rails

down a suburban road,

and the cars travel underneath it.

And it does speeds of up to about 100 miles an hour.

Now this is the way things are going to move,

because China has a very specific problem,

which is different from Europe

and different from the United States:

China has huge numbers of people and no space.

So this is a solution to a situation

where China's going to have

many, many, many cities

over 20 million people.

Okay, so how would I like to finish?

Well, what should our attitude be

towards this world

that we see

very rapidly developing

before us?

I think there will be good things about it and there will be bad things about it.

But I want to argue, above all,

a big-picture positive for this world.

For 200 years,

the world was essentially governed

by a fragment of the human population.

That's what Europe and North America represented.

The arrival of countries

like China and India --

between them 38 percent of the world's population --

and others like Indonesia and Brazil and so on,

represent the most important single act

of democratization

in the last 200 years.

Civilizations and cultures,

which had been ignored, which had no voice,

which were not listened to, which were not known about,

will have a different sort

of representation in this world.

As humanists, we must welcome, surely,

this transformation,

and we will have to learn

about these civilizations.

This big ship here

was the one sailed in by Zheng He

in the early 15th century

on his great voyages

around the South China Sea, the East China Sea

and across the Indian Ocean to East Africa.

The little boat in front of it

was the one in which, 80 years later,

Christopher Columbus crossed the Atlantic.

(Laughter)

Or, look carefully

at this silk scroll

made by ZhuZhou

in 1368.

I think they're playing golf.

Christ, the Chinese even invented golf.

Welcome to the future. Thank you.

(Applause)