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The China Wave: The Rise of

A Civilizational State
The following is an edited version of a lecture
delivered by Chinese author Prof. Zhang Weiwei
on July 11 in Berlin, Germany, at an event on the
Belt and Road Initiative (BRI), sponsored by
the German Schiller Institute. The title of Dr.
Zhangs speech was, The China Model and its
Implications. Dr. Zhang delivered a provoca-
tive presentation on the Chinese Development
Model, providing insights into the systemic
thinking behind the economic and political de-
velopment of China over the last four decades.
Dr. Zhang is the author of a 2012 best-selling
book, The China Wave: Rise of a Civiliza-
tional State.
We reproduce Dr. Zhangs speech here be-
cause of the strategic importance of fostering
and expanding an honest Dialogue of Civilizations [laughs] So, I asked the chairman of the conference
among China, the United States, and other nations. how much time I hadthe maximum was one minute,
Only such an expanding dialogue can create the basis because it was already over time. So I said in a single
for trust and cooperation among nations in the coming statement: Because China has performed better than
period. This type of dialogue will be indispensable in all the other Asian countries combined over the past
bringing nations together around an outlook of war- three decades. Its as simple as that. And I added,
avoidance and global economic development. Behind this, of course, is what I call the China model.
Dr. Zhangs views are his own, and EIR does not Lets compare the China model and U.S. model and see
necessarily endorse his characterization of either, which model works better.
western culture or the political and social realities This is a quick slide to show the huge reduction of
within the United States, as he presents them. poverty in China. Actually, 70% of the worlds poverty
eradication has occurred in China. In other words, with-
Thank you chair, and thank you, Mme. LaRouche out Chinas performance in wiping out poverty, poverty
for your kind invitation. It is a great honor to come to in the world would have actually grown, rather than
the Schiller Institute, to Germany, to present my views been reduced.
on the China model and its possible implications. I will Here are some major indices about Chinas rapid de-
speak for about forty-five minutes, or slightly more, velopment: Roughly over the last three decades and a
and then eventually we will have questions and an- half, China has been growing at an annual rate of nine
swers. percent, trade fifteen percent, per year. China has now
Let us start with an interesting encounter between become the worlds largest trading nation. Its total GDP,
myself and Fareed Zakaria, the renowned CNN host. by official exchange rate figures with the U.S. dollar, is
He asked me once, at a conference: My goodness, you almost $11 trillion. Whats more important, if you cal-
always say China is unique and the Western model culate this by purchasing power parity (PPP), then
cannot apply to China. Well, why have all the Asian China is was already an economy larger than the United
countries except China adopted the Western model? States three years ago; those are the IMF statistics.

August 18, 2017 EIR Cancel the British System, Save the People 7
means that China has produced the worlds larg-
est middle class. This is by international law
standards, which means you hold a passport and
go abroad.
Chinas a huge country. Flying from Beijing
to Shanghai, covers the equivalent of ten Euro-
pean countries. Virtually all those who can afford
air travel in China, all those who can ride high-
speed trains, are those who can afford to go
Whats more important is that most Chinese
are optimistic about the future of their country
this is very importantand also about the future
of their own lives and their families. So this is
very encouraging.

Political Reforms
Now, exactly at that time, six years ago, I had
a debate with Francis Fukuyama, the author of
The End of History. He came to Shanghai at the
time of the Arab Spring, when Egyptian Presi-
dent Mubarak had stepped down, when the Arab
Spring was sweeping across much of North
Africa and the Middle East. So we debated ten
issuesbut three of them I will share with you.
We predicted the future: One prediction con-
cerned the Arab Spring, and he said that China
may also go through an Arab Spring, like
Egypt. I said, no chance, and I explained why,
and I gave all kinds of reasons. Then I predicted
accurately, that the Arab Spring would become
an Arab Winter. That was in June 2011, I
checked; I may be the first scholar to have made
China is the largest trading nation, with a $4.3 tril- this prediction. I was in Brussels last year; I told EU of-
lion total annual trade volume, while having lifted 700 ficials, If the EU would only have listened to the views
million people out of poverty. China is the first develop- of Chinese scholars like me six years back, you could
ing country to realize, to achieve the United Nations have avoided this refugee crisis.
Millennium Development Goal (MDG), which means And then, Fukuyama and I discussed political re-
to halve poverty by the year 2010. China did that a long forms in China and in the United States. He said, Yes,
time ago. And China also has the worlds largest foreign there are a lot of problems in the U.S. political system,
exchange reserves, which means that Chinas foreign but, he said, its a mature political system. It can fix
exchange reserves alone are now larger than the com- its own problems. I replied, I doubt it. I said, Your
bined economies of the former Socialist countries, in- political system is a product of the pre-industrial era,
cluding Russia, the Central Asian Republics, and the when the U.S. had a population of slightly less than
Eastern and Central European countrieslarger than three million. So, I said, you have to go through
their GDP put together, the foreign exchange reserves substantial reform. I made another prediction, which
alone. was also accurate, Without such reform, my concern is
Last year, China exported more tourists than any your next President may be worse off than George W.
other country135 million visits made abroad, which Bush. And today, I guess, most Americans may share

8 Cancel the British System, Save the People EIR August 18, 2017
government of the people, by the people, for the
people, and then compare China and the United States
and maybe some other Western countries, to see in the
end, who has done better, in terms of of the people, by
the people, for the people.
Lets start with for the people first. This is a slide
to show the increase of the wealth of the Chinese people,
and the decline of the wealth of American families.
Look at household net assets. The gap between Chinese
families and U.S. families is roughly only 10,000 U.S.
this view; for sure, most Europeans will share this view dollars. Its unbelievable, but its true. This is a Pew
given the Trump phenomenon. Center survey, which shows that most Chinese are opti-
And then I said, number three, Its not the end of mistic about their countrys future, and are satisfied
history, but the end of the end of history. And I ex- with the direction of their country. In China, its 87%, in
plained why to him. Of course, one major reason is the the U.S.A. 37%.
rise of China, which I call a civilizational state, in that it And this is the latest one, by Ipsos, U.K., one of the
has its own logic, different from other countries. largest opinion survey companies. They ask whether
Now, lets discuss the China model, and lets first the citizens of their countries consider their countries
focus on the political dimension of the China model: are on the right track: in the case of China, its 90%; in
democracy. How to define democracy? Its not easy. Let the case of United States, 35%. I dont know why in the
me borrow the famous line from Abraham Lincoln: case of Germany, its pretty lowits 32%! But thats
Ipsos survey; maybe by this time, half a year later, its
already different. But anyway, you see the result of this
So, the above, as I said, is for the people, where
China has done arguably better than the United States.
Of the people: If we look at civil servants, the
composition of civil service officials, in the case of
China, 95% of Chinese civil servants come from very
ordinary families. So we see the Peoples Republic is
made up of ordinary people; this is technically true as
well for the Chinese government. For the United States,
Professor Stiglitz of Columbia University, Economics
Nobel Prize Laureate, famously said, the United States
today is of the one percent, by the one percent, for the

August 18, 2017 EIR Cancel the British System, Save the People 9
one percent. This line has been widely quoted in the out, in terms of the political system. I say, if the Western
media. approach is about elections, the Chinese approach is
about selection plus elections. And selection is part of
Democracy Chinese culture: We have a long tradition. China was
Now, actually the dispute comes with this by the the first country that invented the public civil service
people. So what is, really, by the people? In the exam system, what we call keju, by the Sui Dynasty,
West, in Germany as well, democracy is widely associ- which means 1,500 years ago. We call this system
ated with very simple procedural democracyone meritocracy.
person, one vote, plus a multiparty system, and regular For the top leadership in China today, we have
elections and rotation of governments. Yet, we find that whats called the members of the Standing Committee
in many countries, Western democracy is, there is of the Political Bureau. The minimum requirement is
this phenomenon called, elect and then regret. If we having served two terms as a governor of a Chinese
look at the Brexit in the U.K., if you look at the U.S. province, which means, at minimum, since China is the
election last year, and we look at opinion surveys about worlds most populous country, you have to have al-
the U.S. Congress, its approval rate is something around ready governed 100 million people before you become
10%. one of the top seven. In the case of Xi Jinping, he actu-
So here there is a contrast. The Western approach of ally managed three provinces, Fujian, Zhejiang and
democracy is focused on whats called procedural de- Shanghai. The internal population is 120 million. In
mocracyprocedurally thats correct, it is democracy. terms of the size of the economy, its larger than India
The Chinese approach it differently: China says, lets all before he became a member of the Standing Com-
first look at substance. So whats the objective of de- mittee. Then he was given another five years in this par-
mocracy?then, try to explore what are the best ways ticular membership, to get familiar with national affairs,
and means to achieve this end, and this is the essence of affairs at the national level, and then became the top
democracy. So we have conducted wide, extensive ex- leader, the President.
perimentsIll come to that. I call this a paradigm shift So, I think this is the most competitive system in the
from whats called democracy vs autocracy, to good world! I joked with Professor Fukuyama, I said, with
governance vs bad governance. In other words, de- the Chinese meritocracy system, its inconceivable,
mocracy at the level of substance, should be good gov- that a weak leader like George W. Bush could come to
ernance. power. Its way below the Chinese bar.
How to achieve good governance? Each country, And this is what I call the decision-making process.
each nation should explore approaches, procedures ap- We term it new democratic centralism. Actually, demo-
propriate to its national conditions, and that is the ap- cratic centralism originated with the Soviet Union.
proach China has adopted. This is what China has tried Eventually it became more centralism than democracy.

10 Cancel the British System, Save the People EIR August 18, 2017
But China turned this process, really, changed it com- institute, we have a union which will casts votes on the
pletely. Its really an institutionalized decision-making performance of the director, deputy director, and secre-
process. Essentially, its what we call from the people, tary general. We do this once a year. You want to pro-
to the people, the first round; to the people, from the mote, say, middle-level cadrewe did that just last
people, another round; from the people, to the people, month; then you have a list of all of those who are qual-
again. You go through several rounds of consultations ified, you have opinion surveys for all of them, all the
and in the end you reach better decisions. professors, associate professors, and lecturers. This is
A typical example is Chinas Five-Year Plan. Again, whats called the mass line in the official jargon.
its a product from the Soviet Union, but China has
moved way beyond the Soviet model. Its not manda- The Chinese State
tory planning, its strategic-indicative planning; its the Now, whats more fundamental, is how to under-
orientation of the country, orientation of the economy, stand the Chinese state. I described the Chinese state as
orientation of social development. For instance, China a civilizational state. What does that mean? China is
made a decision five years ago to make renewable unique: China is the worlds longest continuous civili-
energy a strategic sector. So now China is the leader in zation. And this civilization is amalgamated with a su-
renewable energies, whether solar power, wind power, per-large modern state. Its actually made up of hun-
or electric carsChina is the leader in terms of invest- dreds of states made into one. I once said, more or less
ment and output. accurately: if you are familiar with China, you can ob-
But this same process goes through hundreds of serve the way of life and mentality of a typical person
rounds of discussions at different levels of Chinese from Shanghai, a typical Pekinese, a typical Canton-
government and society, with input from many, many esethree major cities in China. The differences be-
think-tanks. In the end, we reach consensus. So its very tween these three groups of people are actually wider
different from the American model which is decisions and greater than among a typical German, Frenchman
by a small circle who then try to sell that to the public. and Englishmaneven to their language, their dia-
We dont need to sell it. This legitimacy of the deci- lects, and internal pronunciation. The gap is bigger
sion-making process is much stronger than in the Amer- than between German and English, or Frenchbut we
ican practice. have the same written language, and this is important.
And then we have, at the grass roots level, what we So the Chinese are not just one state like Aus-
call consultative democracy, across the state and soci- triaits totally different. I will use another phrase; its
ety. In the West, essentially, democracy is confined to not accurate, but to have a European audience under-
regular elections in the political domain, about who will stand, its more as if the Roman Empire had continued
become the next leader. In the case of China, its really to this day. People speak their different dialects, but
a part of social life. For instance, in my university, my they all use Latin as a written language, and then there

August 18, 2017 EIR Cancel the British System, Save the People 11
is a centralized government, a modern economy,
and the worlds largest middle class some-
thing like that. Its not accurate but its a useful
So this kind of state cannot afford todays
Western political system; if you tried this system,
the country would break up immediately. Just
like the Roman Empire, if it continued today,
would break up with the Western political
For this kind of country, the political tradi-
tion of running this kind of country, the political
governance or political culture for state-gover-
nance or statecraft, is always a unified ruling
entity, a united political entity. So the Chinese
Communist Party is different from the Republi-
can Party or Democratic Party. Those Western
political parties are openly representative of certain Noits very different. Its a civilization, a civiliza-
groups, and then they compete with each other for elec- tional state, and many traditions continue.
In the case of China, it is such a huge country. It was The Economy
first unified in 221 B.C., 2,200 years ago. Ninety-five In the economic domain, China is a mixed economy.
percent or more of the time, China was under one, uni- Its officially called a socialist market economy. In the
fied political entity, the emperor, the courtand this West, theres the difference between the continental
situation continues to this day. So I call the Chinese model, in which the state plays a larger role, versus the
Communist Party a grand coalition. Anglo-Saxon model. But in the case of China, you have
You have all kinds of different voices, interests, state ownership of land. We are all property owners, but
ways, within the party, but you have to reach consen- we have a contract with the state: You own the right to
sus and move on the consensus. So sometimes, I use use this piece of land for seventy years, and then it will
another term. As I said, in the West, political parties be renewed. The advantage of this system is China can
are openly representative of partial interests, the in- carry out this larger-scale infrastructure development in
terests of certain groups: In the case of China, even the public interest.
with its long past, you have to represent so-called all And then, when I say mixed economy, I can give
under Heaven. If you cannot represent, you have to an example. China is now leading the world in mobile
claim you represent all under Heaven. If you claim phone technology. Whats our objective? We call this,
you represent only part of the society, you cannot the fourth industrial revolutionwith one mobile
come to power at all. This is a very different political phone you can do everything. For instance, in Shang-
tradition. hai, you dont need a credit card, you dont need cash;
This is my quick summary of the so-called China everything is paid by your mobile phone. Its already
model. And politically, essentially, its selection plus achieved. And today this mobile phone payment in
election: You have a vigorous process of selection, and China is already larger than Japans GDP. Its fifty times
then you have a process of election. And you have a that in the United States.
unified ruling entitytoday its called the Communist And behind the mixed economyChina now has a
Party. Many people dont like this name, especially in company, you must have heard of it, called Alibaba, of
the West. For Germany, you have the East Germany ex- Jack Ma. He invented a shopping festival, shopping
perience, but whats more important is the substance. spree, Double 11, so 11.11, for Singles. But actually its
Some people in the West always think China is nothing for everyone. So, in the Double 11 festival last year, the
but another East Germany, but ten times larger. one day e-commerce volume was larger than the e-

12 Cancel the British System, Save the People EIR August 18, 2017
single province can perform this job. Thats
why China has shaped this long tradition of a
slightly larger role for the central government.
So whatever surveys you do, the central govern-
ment always enjoys tremendous support among
the Chinese public. This is almost always the

Minxin and Minyi

Now, this is importantthe philosophy
behind Chinese statecraft. Today, we have this
issue of populism, and in my debate with Pro-
fessor Fukuyama, I said, Im deeply worried
about the rise of simple-minded populism in the
United States. He said, with confidence, even
Abraham Lincoln famously said, you can fool
some of the people some of the time, but not all
commerce volume of the whole country of India in one of the people all of the time. You know, with the free
year. Its 120.7 billion yuan, or about $18 billion; its media, with freedom of speech, we can correct these
larger than Indias e-commerce for the whole year. Jack mistakes. I said, Im not that optimistic. [laughs]
Mas Alibaba is a private company, and its doing ex- Im being slightly cynical, because I know the United
tremely well. States well.
But, I say its a mixed economy: The whole logis- In the end, indeed, populism causes a lot of prob-
tics, highway, expressways, high-speed trains, this lems. But in Chinese statecraft, this idea of popular
mobile system4G, 5Gnow, 4G already covers the opinion is called minyi; and then there is minxinone
whole country, 99%, and its a vast country, all these are has still to find the right translation; I have tried to use
done by state-owned companies. Its indeed a combina- the expression hearts and minds of the people. In
tion of two sectors, the state sector and the private other words, minyi is more or less public opinion;
sector. Chinas a vast country, and you have many vil- minxin is more about the long-term and overall interest
lages in the mountains, but China started a project of your nation, or your country. So the governance in
called the Hard-Paved Ways to Each and Every Vil- China is based on minxin, very importantly. Minyi, or
lage, which has been achieved. Power, electricity cov- public opinion, could reflect minxin, the hearts and
erage for the whole nation has been achieved. So all minds, the long-term intentions of your country, or
these are done by the state sector. So, indeed, this is could not reflect itbecause in the Internet age, in this
mixture of both state sector and private sector. The pri- new social media age, public opinion can shift in min-
vate sector is extremely dynamic, and then you also utes or hours.
have the important role of the state sector. So I think at this moment of time in history, empha-
In the social domain, its more about interactions sis on minxin is crucially important. Fortunately we
between the state and society, rather thanespecially have a system which can do that, through what we call
as against the American modelsociety versus state, consultative democracy.
society against the state is different. Because, in the And this is interesting. I just tried to show you a
United States, the tradition is the state is a necessary study done by an American scholar: that in the West
evil. But in the case of China, the state has long been we hear very often, even in Germany, of so-called
viewed as a necessary virtue. In Chinas long history, European values, or universal values. This term
two major rivers, the Yangtze River and Yellow River, itself is okay. The point is, to what extent is it really
run across much of the country. The two rivers cause universal? This study was actually the product of the
regular floods, and we have to control the floods. To debate about Asian values in the 1990s. They sug-
control a flood, nationwide coordination is needed; no gest that, yes, there are certain values which all peo-

August 18, 2017 EIR Cancel the British System, Save the People 13
ples of all nations share. Yet, due to different political The Belt and Road
and cultural traditions, these values are given different And then, the procedures are always the most im-
priorities. In the United States, its freedom of speech; portant thing. I agree, procedures are very important,
in East Asiathere is almost no exceptionits public but look at the West today, the United States in particu-
order. And the reason is very simple, because you have lar. From my humble observation of the world today, all
a very large population and you have relatively countries need some kind of reforms, the United States,
smaller, per-capita resources. So if there is no social Germany, European countries, Chinese Taiwan, Hong
order, its chaos. If you ask a Chinese, what do you Kong they all need reforms! But!Actually, most
fear most, he will tell you chaos. So this is the key countries can hardly conduct reform. For one thing, the
difference. procedures are so complicated. For instance, if you
But, always, I share this view with my American want to have reform in the United States, you need to
friends: I say, do you really have freedom of speech? revise the Constitution. Actually, its impossible to
The United States is such a politically correct soci- revise the Constitution. As a result you cannot carry out
ety! You have so many taboos, far more taboos than reforms.
China, that you cannot touch upon. But thats the same China is arguably one of the very few countries
with the European countrieseven in Germany, as which can push reforms. Now in the United States, the
well, you have this problem. problem is democracy or money-talkracy. I think, in the
Thats my thinking about the American model. In year 2010 and the year 2014, the Supreme Court of the
my debate with Fukuyama, I mentioned briefly the United States decided not to set a ceiling for campaign
problem with the U.S. system, why its not the end of contributions for companies or individuals. You can
history; its the end of the end of history, because there contribute as much as you want. So this is not a democ-
are certain things, which are like genetic flawsone is racy, its a money-talkracy, i.e., the key message is
this assumption that human beings are rational, and this money talks.
whole idea of one person, one vote based on that! And then, the issue of weak governanceFuku-
Indeed, with the new social media, you find that in- yamas phrase called it a vetocracy, different institu-
creasingly its difficult to keep rational and reasoned tions veto each other; then the economy is heavily in
discussions. In the United States, with the involvement debt.
of the money, and then the new social media, you want Now, this will be an interesting fallout from the
to be rational? Its not that easy. China model. I will describe the China model, and how
And then, rights have become absolute. Thats in it operates, and then its relation with the Belt and Road
Europe as well. Rights, rights, rights! From a humble Initiative. So I will describe how the model operates in
Chinese view, rights and obligations always go to- terms of ideas, in terms of the models features, and
gether, otherwise the society cannot operate on a long- then see their relations with the Belt and Road Initia-
term basis. tive.

14 Cancel the British System, Save the People EIR August 18, 2017
The Belt and Road Initiative

You know that the Chinese President put forward But, I think if you only confine yourself to these two
this Belt and Road Initiative four years ago. Its really considerations, you miss a lot of far more important im-
about a platform across Eurasia on land and sea routes plications of this initiative. The China model has one
from China through the South China Sea all the way to feature better than the Western model, which is, it can
the Indian Ocean, South Asia, Africa, Europe, and to plan for the future. It really plans for the next and next-
Indonesia. after-that generations, for the next fifty to one hundred
So this is a gigantic project, and when it was first put years. I will explain how the China model operates in
forward four years ago, and even now, it always meets this whole initiative.
a lot of suspicion in the West. If you look at the Western First, this is called, peoples livelihood first. We
doubts, or suspicions, they are mainly twofold: One is, all know, at this moment of history, a lot of countries
China is now an economy with excessive industrial ca- European countries includedare experiencing a de-
pacity; it wants to export this excessive industrial ca- globalization. People are not happy with globalization.
pacity. This is one interpretation. China is one of the very few countries that has, indeed,
The other is geopolitical: China has geopolitical in- benefitted from globalization. You may say that China
tentions, to create this new sphere of influence. And in is the largest beneficiary from globalization. Why so?
honesty, I must say, yes, China has indeed excessive Whats the Chinese secret?
industrial capacity, so this argument stands. China Actually, its very simple: Because China defines
wants to export its excessive capacity. And given the globalization only as economic globalization, not as po-
size of this projectit will cover 4.4 billion people litical globalizationthats the key difference. Be-
along the routesof course it will have geopolitical cause, over the past twenty or so years, globalization
and geo-economic fallout. No doubt about this. was actually whats called neoliberal globalization.

August 18, 2017 EIR Cancel the British System, Save the People 15
Its about privatization; thats already political. Its connectivity, especially infrastructural links between
about democratizationthats very political. In other nations. At the vertical level its also interesting: You
words, the Americans not only want to impose eco- have the underground pipelines for oil, for natural gas;
nomic liberalization, but also their political model you have highway construction, bullet trains, or normal
worldwide. Thats why you have this Arab Spring, trains, sea links, air linksits already a bit vertical.
you have the color revolutions, you have the fall of the Whats more important now, is China is also putting
Soviet Union, fall of the East, the Berlin Wall, etc. Good forward cooperation in the satellite business.
or bad, but China said, for us, globalization is only And then, whats more interesting has to do with the
economic. Politically, no. Thats the key difference. Europeans, what we call the Beidou system, which is
So with this kind of approach, China has become one Chinas GPS system. And unfortunately, the Europeans
of the largest beneficiaries of globalization. And why missed an opportunity, because originally, China
economic globalization? Because behind this is Chinese planned to do this project in cooperation with the Euro-
logic, one of the key features of the China model: the pean Union. We signed a strategic agreement: for
peoples livelihood first, is the guiding philosophy. Europe you have the Galileo program; China has the
What does it mean? It means whatever you doeco- Beidou program. And yet, the EU has a lot of suspicion
nomic reform, social reform, or political reformyou about China, whether we are going to steal European
should not allow the political machine or the state struc- technologies, or whatever. [laughs] So in the end, the
ture to operate in vain or become a chatting shop. No! It partnership with the European countries for this GPS
has to do something concrete, tangible for peoples lives. system broke up; it didnt work. So, China in the end
It could be material; it could be more than material, but it has done it alone. Now, China is way ahead of Europe.
has to boil down to something concrete, for the people. So China has its own GPS system for the Belt and
And thus, The peoples livelihood first. It reminds me Road countries; by next year, 2018, it will cover all Belt
of the famous line from Bill Clinton, when he said, Its and Road countries, and by the year 2020, in three years
the economy, stupid. He advised those politicians who from now, it will cover the whole world; so it will be an
wanted to become prime minister or President, Pay at- alternative to the GPS system. In China we use this al-
tention to economic performance. So China has all ready.
along focused on this, trying to improve peoples living So this is what I called vertical connectivity.
standards, rather than chanting empty slogans. Then, consultative democracy. I mentioned this
The second part, again, of the China models phi- already briefly. In the Belt and Road Initiative, the
losophy, is seeking truth from facts. Thats the famous slogan and methodology is called discussing together
line from Deng Xiaoping, Chinas late leader. He said, or planning together, building together, and benefitting
we should seek truth from facts, not from dogmas, together. In other words, a country, out of its own in-
whether its from communist dogma or from capitalist terest, decides to join this initiative, or not; China will
dogma; whether its East dogma or West dogma. East not impose its view on you. If you feel its in your inter-
dogma is a utopian outlook; Western dogma is about est, you can join. If its not in your interest, you dont
democracythe markets represent the best, and the need to join; its voluntary. So this is in part a fallout
rest is nonsense. So Deng said we should try our own from the China model, what we call consultative de-
approach, because its Chinese-style socialism. In the mocracy.
end, it has worked. And then, more important, in the China model we
Then you have this opening up at home and have a relatively strong state, but I mentioned the his-
abroad. In the Belt and Road Initiative, it becomes torical legacies from Chinas long history as a civili-
what we call connectivity. Connectivity at the policy zational state. Its also relatively neutral, and rela-
level, at the infrastructure level, in the trade level, at tively disinterested. In the Chinese model, the central
customs levels. government plays a central role, because you have the
different regions in China, and they also have their
True Economic Development own interests. The central government must remain
And I will try to introduce another concept: Its relatively neutral so that they can take care of overall
called vertical connectivity. I mentioned horizontal interests.

16 Cancel the British System, Save the People EIR August 18, 2017
Another interesting phenomenonmany
Europeans asked, Can it be successful?
We met some scholars yesterday, who said,
You do not have a road map. Europeans
believe that you must have clear guidelines,
a clear road map, and clear rules to go by,
and then we can do it. Otherwise, we have
suspicions, reservations. But the Chinese ap-
proach, if you look at the four decades of
change since 1978, is different. We start not
with a road map, we start with a compass.
We just know the orientation, the direction.
And Deng Xiaoping said, the orientations
are clear: first, improving peoples living
standards, and second, a more market-ori-
ented economy. So, market orientation, and
peoples livelihood, are the two orientations.
Ill mention again, China is not a small country. I And under this orientation, you encourage all kinds
made a rough calculation: in Europe each country is of experiments, and the central government will say,
roughly 14 million people on average, per nation, per this experiment is great, lets do it, extend it nation-
county. China is 1.4 billion people. So China is one wide. That experiment is not successful, we should stop
hundred times the size of the average European state. it. So thats the overall approach. Most probably a road
As a result, when we look at globalization up to now, map will emerge in due course. Not now, perhaps ten
what many countries, especially developing countries years from now for the Belt and Road Initiative. So now
are concerned with about the existing international in- there are some interesting developments all the time.
stitutionswith the IMF/World Bank, WTO, you name And then, building bridges between the old and
itthey are, from a non-Western countries point of the new. This is also a very important feature of how
view, biased toward the West, rather than toward the the China model operates. For instance, in the process
developing countries. As a result, China said, lets do of Chinas change over the past four decades, the re-
something more neutraland we tried the AIIB, the forms of the state sector came much later; we have kept
Asian Infrastructure Investment Bank, and the Silk the state sector intact, but we created a private sector
Road Fund, etc. So these are ideas which originated from scratch, and then we tried to build a bridge be-
from China, backed with Chinese money and other tween the state sector and the private sector, and let
money. This is important. them compete with each other. And the state sector has
And they also have a sense of priorities and se- to reform itself, and then become partners. Thats the
quences. If you look at China as a whole, the whole overall approach.
reform process started with the countryside, with agri- So in the Belt and Road Initiative, the same thing is
culture, and then industry, and then commerce. It started happening. You have the existing arrangementlike
with the coastal areas, and then the interior parts of in Russia, they have whats called the Eurasian Eco-
China. The same with the Belt and Road Initiative: We nomic Union. China said, You stay with that, and
have the idea of what we call the key projects, or well build a bridge between the BRI and your plan.
pivot projects, and pivot countries. Its not all the Same with Kazakhstan: They have whats called a
countries simultaneously. You have conditions that Shining Road and we said, Stay with that, and well
differ from one to another. Some countries have more build a bridge between the two, so the two sides can
mature conditions, so we do it firstand then try to cooperate.
have what we call the demonstration effect, to show And then, we have the great new economy, new
others, so others can decide to follow or not. So there is drivers. So the Chinese model has this: If you ask a
a sense of priorities and sequences. Chinese official how to develop an economy, he will

August 18, 2017 EIR Cancel the British System, Save the People 17
worlds largest economy in ten yearsthats by official
exchange rates. If its by purchasing power parity,
China is already the largest economy. And China now
produces the size of one U.K. economy, with its extra
GDP, created every three years.
And Chinas middle class will be twice the U.S.
population in a decade. Today, Chinas middle class is
about 300 million. So ten years from now, China will
have a middle class, by my estimate, of at least 600 mil-
lion, or twice the U.S. population. For one thing, China
has now already produced the worlds largestI dont
like the wordpropertied class. All people have
properties. In the cities its 85%, and in the countryside
its one hundred percent. And I just checked the latest
data: The average room surface size is forty square
meters, which is slightly larger than in Germany. Its
unbelievable; it just took four decades. In Shanghai,
study with you what will be the possible new drivers for when I was a boy, the average space for an individual
the economy. Then, lets do it together, developing the was four square meters, now its ten times bigger. Its
new drivers. Last year, in Hangzhou, we hosted the unbelievable.
G-20 summit. Why the choice of Hangzhou? Because Of course, medical insurance for all, and pensions
Hangzhou is the headquarters of Alibaba and other for all: China achieved that. When you look at the U.S.
large companiesextremely dynamic. Its the first medical care reform, it has almost lasted for one hun-
Chinese city in which you can survive without cash, dred years, and is not achieved, but China has done this
without credit cards. You can buy a bottle of water with within five years.
your mobile phoneits very easy. So the new econ- And of course, the level of protection differs from
omy shows the road. region to region, but basic insurance, and pensions for
all has been achieved. Also China will produce more
The Road Ahead tourists, as is the case now and in the future. And China
Theres a Chinese word, called shi, which means now is the world leader in alternative energies, renew-
overall trend. In playing the Chinese game of go, its able energies.
somewhat like chess, but different from chess. The So eventually it will have this kind of impactwe
purpose is not to physically destroy one enemy, or two are to witness a paradigm shift from democracy versus
enemies. Its to create space and trends. If these trends dictatorship, to good governance or bad governance
are favorable to you, others will follow and there will and good governance can take the form of the Western
be no other choices. Its like the AIIB, the Asian Infra- political systems, but it also can take the form of the
structure Investment Bank. The United States said, non-Western political systems. Likewise, bad gover-
No, its not good. Japan said, No. But China cre- nance can take the form of Western political systems,
ated a trend, shi, so all the other countries wanted to and can take the form of non-Western political sys-
join, and the U.K. took the lead! Germany is also part tems.
of it. By the end of this year, we expect the AIIB will And the global impact will be enormous. I think we
have a membership of eighty-eight or ninety members, have a vertical order today, in which the West, espe-
so it will be an international financial institution al- cially the United States, is above the rest, in terms of
ready. That will really reshape globalization from wealth, in terms of ideas. But this order will become
whats been called a zero-sum game to a win-win more horizontal. So the rest, especially China, will be
partnership. on a par with the West in terms of both wealth and ideas.
And my last slide is a projection about Chinas The world will thus be indeed very different.
future, or Chinese socialism. China will become the And many thanks! Thank you very much.

18 Cancel the British System, Save the People EIR August 18, 2017