As we enter the Year of the Snake and contemplate the continuing development of China, we are unconsciously drawn to observing, discussing and judging the new leaderships’ propensity for internal change, and external engagement. As always because in China everything is linked to everything else, everywhere and through time, I would like to set some context and make some observations.

Mao as the first generation leader, united China and repelled foreigners, Deng Xiaoping led the second generation of leadership and opened China to the world and successive generation of CCP leaders have grown the economy and delivered hundreds of millions of people from poverty. WTO membership in 2001 was a key driver of growth – the export led model, supported by foreign investment in manufacturing and coupled with domestic fixed asset investment delivered outstanding GDP growth.

Not surprisingly, Chinese rulers firmly nailed their legitimacy to strong growth, jobs and prosperity for all. In his much celebrated “trip south” in 1992 Deng famously proclaimed that “to get rich is glorious” and sagely foreshadowed that those who found riches first would subsequently bring others along.

But as of today, the export led model has been found wanting given its dependence on depressed US and European demand, and the industrialisation process has bred increasing inequality between east and west, urban and rural. Inequality as measured by recently released statistics has risen to levels on par with Nigeria and considered dangerous by the UN.

Hence, whilst many speculate on the global rise of China there can be no doubt that the focus of the Chinese leadership is on domestic growth and harmony. Stagnating external demand has exposed China’s weakness in pursuing export led growth, and vested internal interests reliant on fixed asset investment (e.g. property development at the local level) have slowed equitable growth distribution. The 12th five-year plan seeks to reinforce social safety net for the purposes of encouraging Chinese to spend more and reduce external dependence.

As Xi Jinping formally assumes power at the March National People’s congress it’s clear that the process of appointment at all levels is now also a much more complicated process of negotiation than in Deng’s era when the unassailable power of revolutionaries and immortals was used to make appointments. The 5th generation of leaders will not be short on challenges from the need to address institutional reform, social equality, media fuelled discontent and external perceptions related to China’s peaceful rise.

The recently announced plans to liberalise interest rates, reform the migrant worker registration system and crimp state owned enterprises in the name of income equality are ambitious and aim to lift a further 80 million from poverty. But there is no underestimating the vested interests which in many cases operate far from Beijing.

I am reminded of the old Chinese proverb that says the “heavens are high and the emperor is far away”. Xi Jinping is a pragmatic politician. A man of the people who realises that reform is risky but not to reform is riskier still.

Frank Tudor. ■

 

ACBC 2013 Board

The following people were appointed to the National Board of the ACBC at the AGM at the end of 2012.

• Frank Tudor (National Chairman and President)
• Duncan Calder (Senior Vice President)
• Paul Glasson (Vice President)
• Ian McCubbin (Vice President)
• Tim Hogan Doran (Treasurer) 
• Maree Arnason  
• Derrick Baines
• Jason Chang
• Kevin Hopgood-Brown
• Darryl Guppy 
• Adam Handley
• Jim Harrowell
• Sean Keenihan
• Michele Robinson

I would also like to note that Laurie Pearcey left the Council to take up a post with the UNSW at the end of 2012. Laurie was an outstanding contributor to the Council’s activities and will be much missed. The Council has recruited Andrea Myles to the position of Manager, Marketing and Development and is yet to make an announcement on the appointment of the Head of the National Secretariat. Andrea has extensive China based experience, working in the areas of education and has already found her stride in respect to making her mark across the Council’s diverse activities. On behalf of the National Board I wish both Laurie and Andrea the very best in the next phase of their careers.

 

*To learn more about the Australia China Business Council, visit: www.acbc.com.au

 

**For more information and to register for the Australia China Business Council’s annual Canberra Networking Day on March 12, 2013, click here.