A RISING CHINA – Impact on the World and How it matters to Ethnic Chinese 华裔 (Huá-Yì)

Thanks to my good friend Tan Sin Su, I had the opportunity to give a talk on the topic at the Shing Ann  (兴安) Association of Kuala Lumpur and Selangor this afternoon. Below is the gist of what I meant to say, which might not have been well conveyed during the session due to my tendency to suffer from "stage dementia" when I speak in public! 

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百年未有之大变局

(Bǎi Nián Wèi Yǒu Zhī Dà Biàn Jú)

China’s President Xi Jinping has been warning that a once-in-a-hundred-years change is going to befall the world, and all should be prepared for it.

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I am not an academic in geopolitics, nor am I a political scientist or analyst with a think-tank. I am just someone who takes a keen interest in geopolitics, in which everybody is an expert now.

I am not against the US or the West. I still admire them, especially about their universities, architecture, general good tastes and social etiquette.

Those of you who have been following my blog might notice that I have often bashed China and Chinese in the past. However, my sentiment changed after 2018.

Let me begin with these three charts:

In nominal terms, China’s GDP day is about 19 trillion dollars, versus US’s 30 trillion dollars. But in terms of Purchasing Power Parity (PPP), the figures are 38 trillion dollars and 25 trillion dollars respectively. China surpassed the US in 2015. (If the outlandish prices paid by the US government, especially its military, in the procurement of goods are to be believed, and also the McDonalds you pay in the US today, then China’s PPP strength might even be higher!)

You might remember last year many Western and pro-West economists and journalists have been arguing that China’s economy is plateauing, like what happened to Japan after the Plaza Accord in 1985 Their argument did seem justified, considering there was a huge real-estate crisis, young unemployment and weakening Yuan then.

I personally think these economists and journalists do not quite understand the structure of Chinese economy and the resolve of its leaders. To me, China will continue to rise for several years. And the present Tariff War launched by Donald Trump will greatly accelerate the pace.

My confidence is premised on the following factors: It has a political system, hitherto considered menacing to the free world, is now something that is worthy of praise. Xi is like no other Communist ideologue; he is a sage ruler. Its internal market is huge and discerning, and most important of all, its human capital is immense and industrious.

China has leapfrogged (弯道超车) the West in many technological fronts now. Its military strength is the pride of Chinese all over the world.

However, despite the unstoppable trend, China has vowed not to replace the US as the hegemon of the world.

Be that as it may, the next 18 months or so can still be painful to the Chinese economy.

Trump just does not know what Policy [政策] is about…

Policy is a set of principles, ideas or plans used in politics, economics, or business, as a basis for making decisions. Trump is totally devoid of that understanding; he acts egoistically, impulsively and emotionally. Everything is a deal to him – call out bids ridiculously and content to settle for a song – if he thinks he has gained an advantage over his opponent.

His tariffs are against everyone – foes and friends alike.

Some background to begin with…

Deng Xiaoping opened up China. Young Chinese students were too anxious to break out, hence the Tian-An Men incident in 1989. Deng knew the consequences and was quick to reign them in. But China was badly portrayed. The Soviet Union disintegrated in 1991, reinforcing the belief that western democracy is the be-all-and-end-all system for the world to adopt. The US – under Ronald Reagan then – became the undisputed leader of the world.

Notwithstanding, the US was not being seen as the hegemon; rather it was accepted as the global cop.

China got admitted to the World Trade Organisation (WTO) in December 2001 – after 15 years of hard negotiations, largely by Zhu Rongji [朱镕基]. Its economy started to fly. And this attracted the attention of Barack Obama who was facing blatant oppositions from the rising neo-Cons in the country. He had to neutralise the neo-Cons with a “Pivot to Asia” strategy. That was in 2011.

The Chinese leaders read history, and this makes them extremely conscious of the importance of geostrategy and geopolitics in dealing with the external world and they must plan well ahead of time. Besides bringing up the economy, they knew they also needed to strengthen its military; the control of South China Sea must be had.

The China Dream

Xi Jinping [习近平] became the General Secretary Party of the Communist Party of China (CPC) in 2012, and President of China in 2013. The embodiment of Xi’s political ideology is the China Dream [中国梦] – the great rejuvenation of the Chinese nation [中华民族伟大复兴] the objective of which is for China to become a “modern socialist country that is prosperous, strong, democratic, civilised and harmonious.”

Xi said that young people should "dare to dream, work assiduously to fulfil the dreams and contribute to the revitalization of the nation." 

The concept of the Chinese Dream served as part of the inspiration for the Belt and Road Initiative and Made in China 2025 ambition.

Xi strongly believed in Globalization [全球化]. The world was flat, and the theory of Comparative Advantage was a matter of course. He just wanted Chinese to live a better tomorrow.

Entered Trump 1.0

America was tired of itself and elected Donald Trump, a six-times bankrupt, as their President in November 2016. He visited China in 2017 and what he saw there shocked him. China was enjoying a lifestyle that was built on stuff stolen from the Americans! China must pay for it. Hence the first trade war a couple of months later.

China was not quite prepared for it and two things made China’s situation more vulnerable: the mass protests in Hong Kong and the COVID-19. Fortunately, it had great resolve. On the other hand, the way Trump handled the pandemic made him looked amateurish and helpless as a leader. And for the first time, Taiwan under a re-elected Tsai Ing-wen, became a willing pawn under the open embrace of Mike Pompeo, US’s Secretary of State.

China and Taiwan’s 1992 Consensus [九二共识] – Harmonious co-existence under the big China umbrella – was openly discarded by Tsai, whose DPP had all along been championing an independent Taiwan.

We Chinese do not buy this stuff!

Trump’s ineptness caused him to lose to Joe Biden in the 2020 election.

From the very outset, Biden was all out to retard China. He lost time in dispatching Antony Blinken and Jake Sullivan to Alaska to intimidate China, but only to be humiliated by Yang Jiechi [杨洁篪] with this line “中国人不吃这一套” (Zhōng Guó Rén Bù Chī Zhè Yī Tào). We Chinese do not buy that stuff!

Biden rounded all and sundry to launch AUKUS, Five-Eyes, and what-have-you, and the Chips Act to suppress China on the geopolitical and technological front, far more lethal than tariffs. Tsai felt more embolden, in the wake of Biden team’s lip commitment to America’s One-China policy. The Deep State – America’s military-industrial-media-Jewish complex – openly reared its ugly head.

America’s mood in 2024 was turning sour against Biden. He was seen as weak and semi-demented (but not because of his China policy, but the war in Ukraine.) And Trump was again elected, as American 47^th President!

But China was already unstoppable…

The objectives set for China 2025 have largely been achieved. Save for the more rural areas, it is already a developed world by any standard. It has not only fully taken care of the four basics of life for its people – clothing, food, housing and mobility – but is already at the pinnacle of almost everything.

Some 800 million people have been brought out of poverty. But China’s population has peaked and is trending down. Aging is an issue. It certainly cannot rest on its laurels.

Facing the New Xiong-Nus [匈奴]

The first thing is to secure the South China Sea. Chinese leaders had great foresight. It covertly acquired an aircraft carrier from Ukraine in 1998 and refurnished it and named it Type 001 Liaoning. In 2017 it bought into Moto Sich – Ukraine’s very advanced engine maker. Even though the deal had to be terminated, China had two good years to learn. And they form the basis of China’s air and naval great leapfrogs during the last five years.

Today, maybe some fifty to hundred thousand Ukrainians are said to be happily working in China.

China’s Navy now boasts Type 003 Fujian, but in my opinion, its Type 055 destroyers of 13,000 displacement (8 already in service; more are coming) and Type 095 nuclear submarines are even more deadly.

Its Airforce’s J20 rivals the US’s F35, and the silhouettes of its 6^th generation fighters had already appeared over the Chengdu and Shenyang skies.  

Its Rocket Force is even more lethal. In September 2024, it fired a what is believed to be a DF (Dong Feng) 31 across the Pacific Ocean. Its DF series, some of which are hypersonic – from 21 to 41 – are said to be more advanced than what America has, not to mention it has just successfully tested a non-nuclear Hydrogen Bomb,

Notwithstanding, it is maintaining a 1-million strong Ground Force because of total geostrategic considerations.

China is producing around 1.4 to 1.5 million engineering graduates (about 40% of total) annually, representing nearly one-third of the world's total engineering graduates. It qualifies some 77,000 PhDs a year (USA - 40,000). Many Chinese universities rank in the top global 100 today. Some of their universities of technologies are equally formidable in their research and achievements.

In its March 2023 tracker Australia’s ASPI, which I think quite lowly of, says China leads 37 out of 44 technologies in the world.

Huawei, Tencent, AliBaba, SMIC, BYD, DJI, CATL, Xiaomi are just some of the names that came to my mind immediately; there are also DeepSeek and its fellow five little dragons in Hangzhou, not to mention the Wu-Kong game and Ne-Zha film producers.

In space technology, China has already sent up another Shenzhou – Shenzhou 20 this time. Its 2030 moon landing target is likely to be on track. It can even refuel spacecrafts in orbits.

China is mass-producing 7-nm chips without ASML’s EVU machines, albeit at a higher cost. (Apparently, they can also do 5-nm ones.) I understand that they have also made breakthroughs in carbon-based microchips, which is a world first. Tim Cooks says this: China’s quality and quantity of very skilled workforce is totally unmatchable.

It has also gone beyond Engineering to stamp its prowess. It now targets FAM171A2 to treat Parkinson’s disease, has developed lung cancer drug called Ivonescimab (by Akeso) which has been hailed as DeepSeek moment for China’s drug industry, planted electrode chips in brain and spinal cord to help patients walk (Fudan University) and in many areas in agriculture, archaeology, etc.

There is this saying, anything that China goes into will make the product selling at cabbage” prices [白菜价 bái cài jià] in no time. Frightening to the western world indeed!

The West’s paranoia of China knows no bounds…

Biden said this in March 2021: "They [China] have an overall goal to become the leading country in the world, the wealthiest country in the world, and the most powerful country in the world. That's not gonna happen on my watch," He is now gone.

But America’s “might-based” mindset is even more blatant under Trump 2.0. Trump has unveiled the Ugliness of the Americans to the core. To him, everything boils down to DEALS, but he can change his mind in the blink of an eye. Under him, Henry Kissinger’s line of “It may be dangerous to be America's enemy, but to be America's friend is fatal” becomes a reality to allies like Canada and in Europe.

The World is now yearning for a Values-based World Order, or Fairness-based World Order! This is a great opportunity for China!

 

IMPACT ON THE WORLD

 

A rising China has terrified the US. Biden’s preoccupation was a direct result of this fear, ditto Trump’s tariff war now.

But Trump is launching the trade war with a bunch of stable boys. We have an idiom in Chinese: 马夫当将军 (mǎ-fū dāng jiāng-jūn), meaning, using horse handlers to act as generals. Peter Navaro, Stephen Miran, Scott Bessent, Pete Hegseth, Kash Patel, and several others are simply nincompoops! Navaro, though a PhD from Harvard, is an academic fraud. His PhD has had nothing to do with macro-economics. Miran’s concept of using tariff to make America great also has many loopholes in argument.

What is confronting the US today is its perceived trade imbalance with the world and the enormity of its national debt. For the former, Trumps thinks he can solve it by bringing manufacturing back to the country. As for the latter, it is an issue of budgetary incomes and expenses. He thinks tariff can solve both these problems.

It is Americans who will pay the tariff. Does Trump know that? Of course he knows! Why then?

It is his “China, China, China finger-pointing blame game again. He wants to corner everyone to force them to kill China with his tariff weapon. Everyone can see the folly of his motive, still the world shakes with fear. The following is a quote from an author called Anne Applebaum:

 “Sometimes the point is not to make people believe in a lie, it is to make people fear the LIAR.”

Small nations fear the LIAR! Many succumbed.

US’s National Debt stands at 36 trillion dollars. Much of it is really owed to US corporations. (Only 30-35% is held by foreigners!) Its interest burden is about 600 billion dollars, or about 16% of its federal budget. The 10-year bond yield is now about 4.5%. Many of its bonds will be maturing soon and new bonds need to be issued.

Some say Trump’s tariff move is an act of a genius. There is this Bond Yield Theory, which says he is deliberately crashing the market and will do a couple of things to refinance the debt with close to zero interest rates. (Supposedly this is his modus operandi: Tariff to give rise to recession, which will cause inflation, causing the demand for capital and yield to go down, this allows him to refinance the debt at lower cost. After that he will introduce stimuli to revive the economy.)

I do not quite buy the theory. Fed is not playing ball with him and there are simply too many uncertainties that are beyond control to make execution possible, even if he has a first-class team.

In his very simplistic mind, he thinks he can use tariffs to rob the world, especially China. Period.

But he risks WAR! The world needs to trade. Remember how did the Chinese century of humiliation begin? (Answer: When Qian Long denied Lord McCartney of England’s access to China’s market.) And why did the Japanese bombed Pearl Harbour?

Crisis is both Threats and Opportunities

Chinese leaders have been schooled in the best of Kung-tze and Sun-tze wisdoms. The former is about statecraft and the latter, war and battle preparations.  

 

得德多助; 失德寡助 Dé dào duō zhù , Shī dào guǎ zhù

站在正义的一方

(Fortune comes to those who act righteously; Disaster falls on those who cause harm to others – One must stand on the right side of history.)

A thorn in the flesh will be removed

Trump’s decoupling madness has accelerated China’s resolve to bring back Taiwan to its fold. Taiwan may just become another province of China, if its ruling party DPP (Democratic Progressive Party) still cannot read the writing on the wall in good time. One thing for certain, though – Taiwan does not need to spend billions on defence anymore.

Once the thorn is removed, peace will return to South China Sea and China can be more generous with its neighbours, maybe even the Philippines, on the geography of the South China Sea.

The world from disorder to a new order

Trump’s term ends in 2029, we do not know who the new President is going to be. But for sure, the US will continue to want to bully China.

But for sure also, China will be able to stare down the bully and 分庭抗礼 [fēn tíng kàng lǐ – act, without reservations, as a full equal] with the US in the global stage.

The Beacon of HOPE will turn dark

The Statue of Liberty has long symbolised HOPE for people to want to have a new life. Now the harsh immigration and deportation policy has put paid to that hope. This will deprive the US of talents from many countries, especially China, which alone accounts for 20-30% of the top echelon of US’s STEM brainpower in universities and industries.

The Hegemon will finally be reined in

The fear for its Military-Industrial-Media complex will be diminished. Chinese Navy’s Blue Ocean capability will be pronounced, and The US cannot call the shots anymore.

The world will more be a Values- or Fairness-based World Order than the present Might-based World Order.

Unbridled Liberal Capitalism will be checked

The oligarchs will no longer have a field day. They need to pay taxes to repay the US’s infrastructure.

The formidability of the Chinese systems will be more widely acknowledged. The way their leaders are selected and decisions based on long-term and posterity considerations are wisdoms that are not to be scorned at anymore. The silliness of the US’s 4-year “emperor” or the Australia’s 3-year election cycles will become more pronounced.

A new architecture will evolve for the Global Financial System

The dollar accounts for 47.1% of world trade today (RMB about 6%), even though the US’s share of the world trade is only 10% (China 15%). By 2030; China is likely to account for 25% of the world trade.

The dollar’s dominance will be greatly diminished, but not totally gone

China has already launched a cross-border interbank payment system (CIPS); its M-Bridge initiative is also in place. They will lay the foundation for this new architecture.

 We might see less volatile, calmer forex. And maybe, a new currency pegging system.

 Other Benefits and Risks to the World

China’s technological and AI prowess will bring better connectivity to the world. As it is TikTok and XiaoHongShu are already helping others to appreciate China’s rise.

 There will be increasing use of China Standards in products, acceptance and advocation of Chinese and integrative medicines.

The international community will certainly want UN, WTO, WHO to be reformed to provide clarity to responsibilities and accountabilities.

If there is no war for the next two years, we should see a more peaceful world after that.

Risks and costs to the lesser Global South

On the other hand, the nature of Chinese innovativeness and productivity is likely to be too domineering and pre-emptive for the rest the world. Many countries may find themselves edged out to become mere commodity providers in the supply chain. This would also be bad for China too.

A delicate balance must be struck.

We need to go into a more complex matrix to do a deeper benefits and risks analysis. The exercise involves political/geopolitical/geostrategic, economic, military, technological, ideological, social dimensions vis-à-vis “Peoples” axes - the Whites; the pseudo-West – Japanese, Koreans, Filipinos, Taiwanese, some ethnic Chinese living in various parts of the world; Muslims – West Asia, Central Asia; India; Global South – neighbouring nations, far-flung countries, differentiating between leader, elites and the masses. They think and act differently.

China is fortunate to have Jeffrey Sachs, George Yeo, Kishore Mahbubani, Hugh White and Keyu Jin, amongst others, to help give unbiased opinions about China, but I don’t believe they have many western followers.

Jeffrey Sachs, a Columbia University thinker, has been telling the world that China is NOT a threat to the world!

But China’s Success model is difficult for others to emulate. Maybe the Singapore model can.

Next, Its Symbolisation to Hua-Yi

I do not use the term to underscore that it is a process, rather than an outcome.

China will prevail in the long run, because it is fighting a global tyrant.

The US containment of China, from the dying days of Trump 1.0, has given Chinese all over the world a never-before-seen wave of “patriotism” or pride and an acceptance of China as their ancestral land [祖国].

Of course, there are still many Chinese, especially disgruntled Hong Kongers and closed-minded Taiwanese, who continue to refuse to accept their heritage.

 A risen China, for sure, will give Chinese all over the world a better berth, socially speaking.

Save for a period when China was in a very pathetic stage (in the 1930s, when China was dirt poor – as dramatised in Pearl S Buck’s Good Earth), the Qing and Mao legacies ingrained many in the West the image of China as an archaic civilisation and Chinese as pigtailed and exude Fu Manchu “image” – sinister, not trustworthy.  JD Vance loudly described Chinese as peasants (when he himself was raised in a broken hillbilly family). Even cultured ones tend to notice Chinese tendency to be casual with personal and public hygiene, smoking in non-smoking areas, and “missing-out’ rushing habits.

The West with their built-in superiority complex is now unable to accept these Blue Ants are equal or better than them,

What do all these mean to Hua Yi?

The Marco Polo admiration can only return when we have totally risen above the Whites.

The more enlightened leaders have understood China’s rise,

But Sinophobia or Yellow Peril will continue in many western mind - Yellow Peri

Chinese in Southeast Asia in particular…

Let us be honest. People generally do not like Chinese – thanks to stereotyping by media and prejudices.

…华裔 and 华侨 distinction

But if your daughter-in-law's 娘家 [niáng jiā – daughter-in-law’s family] is powerful and wealthy, how dare you bully your daughter-in-law?

We used to fear 排华 [pái Huá – mass action to boot out Chinese] this will be a thing of the past…

Wang Gungwu makes a very strong difference between华裔 [Huá yì – ethnic Chinese] and 华侨 [Huá qiáo – overseas Chinese]. We are ethnic Chinese in Malaysia, not overseas Chinese in Malaysia. Our primary loyalty is to the country you live in, not China.

… Education and Entrepreneurship Pursuits

There will be many Tan Li Bu’s and Tan Eng Hock’s in no time.

Instead of going to the UK, Australia and New Zealand, and the US for their university degrees, students can more confidently enrol to study in Chinese universities, especially those who do their secondary in Chinese schools here. Many will continue to pursue higher degrees and work there. Entrepreneurship is just a matter of course.

… Agents of Change and Image Ambassadors

To become a truly admired country and people, China and Chinese still have many formidable miles to run. All of us have read about the recent collapse of a Chinese-built yet-to-complete high-rise in Bangkok after Myanmar was hit by an 8.2 magnitude earthquake. We have also read about the horrible scams in Myawaddy. I live half the time in Melbourne; I could see the huge capital flights – from corruption, I suspect – that is taking place from China there. These are very bad aspects of Chineseness.

We have the good fortune of being ingrained over two millennia with Ru-Dao-Fó (儒, 道, 佛) philosophy and cultural practices, even though we subscribe to different religions. We also have the best of East and West exposures. And many of you possess intimate knowledge of Chinese history and culture. Many of us are at the top of the good chain.

We can perhaps serve as the Change Agents and Image Ambassadors of good Chineseness?

  

CONCLUSION

However, we can hardly predict things beyond the next five years. Xi may no longer be around by then. Megalomaniacs can do stupid things. Hopefully, this will not happen for the next twenty years.

China still has a few last miles to run, if it wants to be convincingly accepted by the world, a need which I have written about in my blog some time ago.

Nonetheless, I am happy to bet on today’s China.

A NOTE ON CHINA’S GEOSTRATEGY

Geo-strategically, there was a theory expounded by someone in the mid-20^th century, which says, "Whoever controls the Rimland rules Eurasia, who rules Eurasia controls the destinies of the world". Eurasia, comprising the landmass of northern and western China, Siberia, and the Stans (including Afghanistan), because of its great tribal and religious diversity will always remain a source of potential flashing point – due to its great cultural and religious diversity.

Wonder why China has to maintain a 1 million strong army?

End

Stop Press:

It is believed that Pakistan's J10Cs have shot down several of India's Rafale fighters in their recent conflict. The western world should now be convinced that Chinese are not producing toys!