China’s success story goes hand-in-hand with the evolution of the Communist Party of China. The founding of the Party on July 1, 1921, signaled the start of ending some 200 years of oppression by foreign powers, Western invasions, occupation and exploitation, and looting of China’s rich natural resources.
One of the CPC’s key objectives was to ensure China would never again be exploited or dominated by Western powers.
The CPC became a force to be reckoned with, as it grew stronger by deepening the solidarity forged among communities and regions across China, with all pursuing the same goal of independence from colonization and exploitation, and the creation of a sovereign communist China, with a sovereign socialist economy.
Western attempts to destabilize China
Over the past several decades, the United States, the United Kingdom and some other Western countries have continually sought to destabilize China by interfering in Taiwan, which is a blatant interference in the country’s internal affairs. The latest such move includes the US’ sale of weapons worth $5 billion to Taiwan in December 2020.
Earlier this year, the US ambassador to the Pacific Island of Palau (Palau being one of the handful of states that has “diplomatic” ties with Taiwan) became the first US envoy to travel to Taiwan in an official capacity since Washington severed formal ties with the island in favor of Beijing in 1979.
In addition, the US is promoting closer relations with Taiwan through the so-called TAIPEI(Taiwan Allies International Protection and Enhancement Initiative) Act, signed in April 2020, which calls for strengthening trade and other relations between the US and Taiwan to bring the island closer to “international space”, meaning politically distancing the island territory from the Chinese mainland.
The interferences in China’s internal affairs also include the US-triggered trade war against Beijing, the stationing of about 60 percent of the US Navy in the South China Sea, efforts to extend Washington’s long-arm jurisdiction to the Hong Kong Special Administrative Region, baseless accusation of human rights violations in the Xinjiang Uygur autonomous region, and imposing sanctions on Chinese entities. Such efforts are clearly aimed at thwarting China’s development and thus checking its peaceful rise.
Evil foreign designs have been thwarted
Thanks to the steadfast leadership of President Xi Jinping, China has dealt with these interferences carefully, always trying to find diplomatic and non-belligerent solutions. Also, China has always followed the path of non-aggression while moving peacefully forward with the goal of building a multipolar world where people of different countries, regions, races, religions, cultures and ideologies can prosper peacefully.
Since the founding of the Party, China has striven for common global development but, unlike the West, never tried to influence other countries or promote its ideology or political system.
What the CPC has achieved in its 100 years of history is truly remarkable. Its accomplishments include not only maintaining internal solidarity, but also winning the Chinese people’s trust, moving peacefully forward, realizing food security, and providing proper education and healthcare to all. Not to forget China has lifted about 800 million people out of extreme poverty, which no other country has achieved, because of the Party’s leadership.
Today, the CPC has about 95 million members, making it the largest governing party in the world. And thanks to the CPC’s leadership, China has become the second-largest economy in the world in nominal GDP terms and the largest in terms of purchasing power parity.
These achievements, however, are considered a threat to the Western world by the US, which still holds sway over international organization, including global economic and financial organizations, because of the dominance of the US dollar. Yet empire is crumbling.
US dollar slowly losing its sheen
The US knows it. Its strongest asset, the dollar, is gradually losing sheen. The US dollar is still widely used around the world to purchase vital goods and services, such as energy, food and communications services, as well as in other areas of global trade, but it is losing its weight in the international financial market.
The reasons are both political and economic. On the economic front, the US has created, through its 1913 Federal Reserve Act, a fiat currency, a currency whose flow and volume can be increased at will. This allows the US to “print” money as per necessity, including to finance extensive wars and conflicts around the globe, and accumulate debts that the US Treasury and the Fed will never be able to pay back.
When Washington abandoned in 1971 its self-designed gold standard (through the Bretton Woods Conference in 1944), the US dollar became the de facto “new gold standard”, because the gold standard was based on the value of the US dollar ($35/troy ounce, about 31 grams), instead of on a basket of currencies. Since everybody needed US dollars for their foreign exchange reserves, it gave the US Treasury a free hand to increase its money supply almost infinitely.
When the US, in the early 1970s, negotiated with Saudi Arabia, then head of the Organization of Petroleum Exporting Countries, that all hydrocarbons, including petrol gas and coal, should be traded in US dollars, it gave the US another dollar boost－to freely print dollars, as the entire world needed them to buy hydrocarbon energy. Even today about 84 percent of all energy consumed worldwide consists of hydrocarbons (2019 Forbes).
In return the US promised Saudi Arabia that it will always protect it, economically, strategically and militarily, and proceeded almost immediately to build numerous military bases in Saudi Arabia, from which it is now waging different wars in the Middle East.
US most debt-ridden country in the world
The printing of dollars at random, and thus continuous accumulation of new debt, has made the US by far the most indebted country in the world－its current debt amounts to $49.8 trillion, compared with its GDP of about $21 trillion in 2020, that is, a 237 percent debt over GDP.
There is another important component of US debt, which the General Accounting Office calls “Unfunded Liabilities”,$213 trillion (all figures 16 April 2021: US Debt Clock). These exceptionally high ratios have also to do with COVID-19-induced debt.
Unfunded liabilities are debt obligations of countries that don’t have sufficient funds or assets set aside to repay them. These liabilities generally refer to the US government’s debt service (unpaid interest on debt), or pension plans and their impact on savings and investment securities, as well as medical insurance and social support coverage for soldiers returning from wars.
These astronomical debt figures and the dollar’s “unbacked” fiat character are further reducing the world’s confidence in the US dollar. That the US does not intend to repay its debt was always known. But Allan Greenspan, Fed chair from 1987 to 2006, confirmed it when, in reply to a journalist’s question on when will the US repay its debt, he said: Never. We just print new money.
Over the past about 10 years, the US dollar has been losing its hydrocarbon trade monopoly. Also, other international contracts are no longer finalized in US dollars today. China, Russia, Iran, Venezuela and some other countries have stopped using the dollar in foreign trade, and instead are trading in their own currencies and increasingly in the Chinese yuan.
Why? Countries around the world started realizing that the dollar is a highly volatile fiat currency. An equally important factor for the loss of trust in the US currency is Washington’s frequent use of dollar-denominated international assets and the US banking system to impose draconian and illegal economic sanctions on countries that do not follow its dictates, including blocking countries’ reserve assets placed overseas. Such nefarious economic and political acts of the US have triggered the end of the dollar’s hegemony.
The diminishing trust in the dollar may further intensify when China rolls out its digital currency, which can be used for international trade without touching the US-dominated SWIFT transfer and US banking systems. The yuan, backed by a strong and solid Chinese economy, is fast gaining the trust of countries around the world, and the use of the yuan as an international reserve asset is rapidly expanding. The digital yuan could also become an international reserve currency, thereby further reducing the demand for the US dollar.
While the Fed is also contemplating issuing a digital currency, it is not clear to what extent it can be detached from the dollar and its debt burden. But with US’ global trade waning and China’s foreign trade growing, it will be very difficult for a declining US economy to catch up with a rising Chinese economy. For example, in the first half of this year, China’s foreign trade (exports and imports) increased to 18.07 trillion yuan ($2.79 trillion), up 27.1 percent year-on-year, with exports jumping 28.1 percent and imports rising 25.9 percent in yuan terms, according to China’s General Administration of Customs.
If anything, these developments－along with the fact that China has largely contained the COVID-19 pandemic within its borders and resumed near-normal economic activity－testify to the success of the Party’s able leadership, and a sound Chinese economy and fiscal policy. This is the result of what China calls socialism with Chinese characteristics－a feature demonstrating the constant evolution of the CPC.
These facts will further enhance international trust in the Chinese economy, as well as in China’s efforts to help build a more equal, more egalitarian and more just multipolar world, where countries can safeguard their sovereignty, culture and national resources, follow their monetary policy, improve their foreign relations, and live peacefully together.
Chinese vision and the CPC
The Belt and Road Initiative is the brainchild of President Xi. It’s based on the same ancient principles that powered the ancient Silk Road and made it such a huge success, and aimed at building bridges between peoples, and promoting the exchange of goods and services, research, knowledge, cultural wisdom peacefully, harmoniously and in “win-win” style in the 21st century. On Sept 7, 2013, Xi proposed the Belt and Road Initiative at Kazakhstan’s Nazarbayev University while speaking about people-to-people friendship and creating a better future for humankind.
Referring to the ancient Silk Road, Xi talked about the history of exchanges and said: “Countries with differences in race, belief and cultural background can absolutely share peace and development as long as they persist in unity and mutual trust, equality and mutual benefit, mutual tolerance and learning from each other, as well as cooperation and win-win outcomes.”
Xi’s vision may be shaping the world of the 21st century, as it is aimed at connecting the world through land and sea, by improving infrastructure, and establishing industrial joint ventures including in energy, education and research institutions, cultural exchanges and much more. The Belt and Road Initiative has already been enshrined in China’s Constitution, and since 2017 it has become the flagship of the country’s foreign policy.
The purpose of the initiative is also to “construct a unified large market and make full use of both international and domestic markets, through cultural exchanges and integration, to enhance mutual understanding and trust of member nations, ending up in an innovative pattern with capital inflows, talent pool, and technology database”.
The Belt and Road of mutual understanding
Belt and Road-related investments in more than 150 countries and international organizations－across Asia, Africa, Europe, the Middle East and the Americas－have already exceeded $5 trillion. The initiative is also aimed at ensuring economies can benefit from their comparative advantages, and creating win-win conditions for them. Essentially, the purpose of the initiative is to build and deepen mutual understanding and trust among Belt and Road countries, facilitating the free flow of capital across borders, and share common development and prosperity.
In the first six years since Xi proposed the Belt and Road Initiative, the West was in denial of its existence, for it believed the initiative would fail. But fail it didn’t. Instead, even many European Union members, including Greece, Italy and Portugal have joined it－and more are likely to follow, as the temptation to participate in the successful and beneficial initiative is overwhelming.
Yet the Belt and Road Initiative is not the only plan that will boost China’s economy and standing in the world. After facing Western aggression, denigration and belligerence for decades, China is focusing on trade development and cooperation with its ASEAN member partners. In November 2020, after eight years of negotiations, China signed the Regional Comprehensive Economic Partnership agreement with the 10 members of the Association of Southeast Asian Nations, and Japan, the Republic of Korea, Australia and New Zealand. The RCEP covers some 2.2 billion people and accounts for about 30 percent of the global GDP, making it the largest free trade agreement in the world.
Besides, under the RCEP framework, trade deals will be finalized in local currencies and the yuan, not in US dollars, which makes the RCEP a platform for “de-dollarizing” trade first in the Asia-Pacific region, and then gradually across the world. Moving away from dollar-based trade would be an effective way of countering the West’s “sanctions culture”, or making Western sanctions totally ineffective.
China’s emphasis on internal economic development－so-called horizontal economic development instead of vertical development－will help improve domestic production capacity and strengthen infrastructure facilities, in order to expand the domestic market and establish an equilibrium between the prosperous eastern coastal region and the vast and relatively less developed hinterland.
Brighter future beckons China
After centuries of Western “supremacy”, relentless exploitation, colonization, discrimination and outright enslavement of colored people, and destruction of other cultures throughout the world, the time has come to veer the future of humankind toward a more peaceful, more just and more egalitarian world.
During the next hundred years under the leadership of the CPC, China is set to guide the East into an era of common prosperity, good health and hope. The new epoch will be one of a multipolar world with win-win trade relations.
It may create new environmental, social and technological challenges, but it will also trigger a new awakening for social consciousness and solidarity. And a key instrument for achieving the major goals of human well-being will be the Belt and Road Initiative, as it will provide a steady flow of new ideas and creations, and promote cultural exchange and mutual learning.
So the future focus should be on generating renewable energy; increasing green areas in urban centers to strike a balance between natural carbon dioxide absorption and oxygen production in order to eventually achieve carbon neutrality; and protecting the world’s rain forests and water resources.
There is also a need to keep natural resources and public services－healthcare, education, food supply, water and sanitation services, electricity and public transport－in the public domain; promote multi-crop agriculture; develop artificial intelligence to make production and transport more efficient so as to better serve humanity; and adopt public banking as the primary means of socioeconomic development funding. All this to build a community with a shared future for mankind.
The views don’t necessarily reflect those of China Daily.
The author, a former senior economist at the World Bank and the World Health Organization, is a research associate at the Centre for Research on Globalization and a non-resident senior fellow at Chongyang Institute for Financial Studies, Renmin University of China.