The 2021 Ideas Network 2030 Summer University

Session 7:
Geopolitical – Is the Rise of China Inevitable?

2 September 2021

Moderator: Roland Freudenstein
Panellists: Tom Tugendhat MP and Steve Tsang
Rapporteur: Ivan Botoucharov

General observations:

• The ultimate rise of China as the largest Global power is by no means inevitable. The trajectory is less clear than it was previously and the expectation that China will be the world’s greatest power is not as certain as it used to be.

• The rise of China has a qualitative and quantitative aspect.

• China is the second largest economy, about to eclipse the US economy in terms of size in a matter of years. By it’s centenary in 2049 it will be second to none.

• However, on the ground we see two China’s. The large and prosperous cities, mostly along the coast, and the relatively poor interior.

• A lot of the decisions that gave power to the rise of China are coming home to roost.

• The demographic challenge is now unprecedented. China is increasingly aging.

• A key question is will China get old before it gets rich, and how much of it will get rich before it gets old.

Specific observations:

• China is a middle-income country and it may be caught in a middle-income trap for the long-term.

• The success it achieved in the 1980s and 90s was delivered from Hong Kong, Taiwan, Europe, Asia, Australia and elsewhere. They hugely contributed to its economic miracle.

• This is now changing as China has changed its stance towards the rest of the world as compared to the 90s.

• This stance will likely remain as it is now because there is very little scope for policy debates, even in the upper echelon of politics – as Xi Jinping has consolidated so much power in himself.

• President Xi has also opted out of giving people in his elite circle access to the strategy for the future.

• He has also removed the 10-year turnover of Politburo members. This has made him stronger in the short term, but weaker in the long term, with ambitious politicians holding grudges.

• The tricky bit is not taking power, it is handing over power in a way that is stable and sustainable. China is at risk of state failure. This would be a direct challenge to the UK and to our economy.

• In addition, China for 30 years “has opted out of its youth”. It has not accelerated its innovation and transformation.

• The percentage of High School graduates in China is in the 30s which is very low and affects China’s potential.

• China has been a great innovator throughout history. However, the recent education policy is now stunting this, as parents do not have the opportunity to educate their children to a high level with many schools being very basic.

• In terms of innovation Jack Ma is a strong example of the increasing crackdown on entrepreneurship.

• In a knowledge economy, we are seeing an extraordinary decision by the central committee to punish those who succeed, thereby creating a fundamental weakness in the economy.

Miscellaneous observations:

• There are many Chinese people who seek refuge in free countries, even the most rich and powerful Chinese leaders seek citizenship of Western countries.

Written summaries of other Summer University Ideas sessions

Session 5: Technology – Who regulates Cyberspace?

Session 6: Economy and Trade: Resilience of Openness?

Session 9: Sustainability – How to Make a Success of COP26?