When the Chinese Communist Party celebrated its 70th birthday last month, it did so with a jaw-dropping display of armaments, the size and scale of which has never been seen before.
The vast parade in Tiananmen Square included 15,000 troops, 580 pieces of tracked, wheeled and towed weaponry, including dozens of DF-41s, the world’s fastest and most powerful inter-continental missiles.
China‘s leaders are increasingly happy to show off their new military hardware, but that is only one part of the story.
The country’s rise as a military superpower is matched by investment in diplomacy and technology – all backed by the vast power of its economy. For the People’s Republic aims not merely to challenge the dominance of the US but to place itself at the heart of a global sphere of influence with different and disturbingly authoritarian rules. And it is time the West woke up.
Alibaba is now the world’s largest e-commerce retailer, bigger than Amazon and eBay combined. It also offers its own payment and banking service
Perhaps the best way of illustrating this lies not on the parade ground, but in the shopping and dating habits of hundreds of millions of ordinary citizens. Most of us have grasped the idea that China restricts the internet, blocking US tech giants such as Google, Amazon and Facebook.
Less well understood is that China has built a complete internet of its own, featuring home-grown tech titans and developed with aggressive state funding.
Alibaba is now the world’s largest e-commerce retailer, bigger than Amazon and eBay combined. It also offers its own payment and banking service. China Mobile is the world’s largest mobile phone company, worth almost £155 billion.
Tencent, China’s Facebook, operates many super apps enabling users to chat, shop online, pay taxes and utility bills, and play games, all under one platform. And Huawei, a company all-too familiar in the West, is arguably the world’s largest and most advanced provider of telecommunications equipment.
The simplicity and efficiency of these systems make them easy to sell, and they are lucrative. So, when foreign governments are offered state-of-the-art capability at below market prices, they find it hard to say no.
Membership of this ‘China Club’ might begin voluntarily, with promises of impressive Chinese investment, but once signed up it’s very difficult to leave.
Move on a notch and China could easily insist that, for example, customers of Chinese phones made by Huawei move away from GPS – the Western system of global positioning satellites – to the Chinese system run by Baidu. These satellites are an indispensable component of our advancing tech world.
In short, China’s tech platforms stand at the frontier of its war with the West – and it is winning. American dominance is under threat. So convenient are Chinese payment systems, and so powerful its economy, the renminbi could soon overtake the mighty dollar as a global reserve currency.
China makes no secret of its ambition to secure global dominance in automation, artificial intelligence and digital technology, and if it succeeds in harnessing the next big tech jump, namely quantum computing, then the show is over.
China makes no secret of its ambition to secure global dominance in automation, artificial intelligence and digital technology, and if it succeeds in harnessing the next big tech jump, namely quantum computing, then the show is over (file image)
This next generation of machine-thinking is so fast that it makes current processors look like abacuses, with encryption of data which cannot be broken. American funding in this area is around £155 million a year; China is investing £7.7 billion in one facility alone.
There are other fronts in Chinese expansionism, too. Its global ambitions are backed by a campaign of foreign investment, especially across East Asia and Africa. The One Belt One Road initiative involves developing billions of pounds worth of infrastructure abroad, but it has led to criticism that partner countries are left with huge debts.
One example of this so-called ‘debt trap diplomacy’ is an £6.2 billion loan to Sri Lanka for the building of Hambantota Port, which they were unable to pay. As a result, Sri Lanka has ceded full control of the port to China’s navy.
Global debt owed to China has increased from £385 billion in 2000 to more than £3.85 trillion today, of which £1 trillion is owed by the US. China is making strategic real estate investments across the world. It owns the Port of Piraeus in Athens and is about to build its own port in Abu Dhabi.
Twenty years ago, China’s defence budget was on par with the UK’s. Today it is five times larger at £193 billion and climbing. Defence spending already outmatches Russia and is closing the gap with the US.
Its navy grows by the size of ours every single year. Its air force is the largest in Asia. China’s Army is the largest in the world. China is investing in space technology, too.
With a £7 billion annual budget, it now launches more rockets than any other country, has landed a rocket – and a team of scientists – on the far side of the moon, and is perfecting space-based weapons systems. There are no agreed rules for the use of space and there is nothing to stop the Chinese doing what they like.
To compound matters, the nature of warfare is changing and our own tech systems are all-too vulnerable to interference from afar – the theft of intellectual property, or cyber-attacks on businesses. We are under constant threat, with few reprisals available.
China is a sophisticated observer of Western political debates. It recognises the threshold below which it can act without prompting any meaningful response. But left unchecked, the extraordinary trajectory of technological, economic and military intentions will inevitably mean conflict.
China and the West are like two trains on a collision course – thousands of miles apart but moving at speed. We in the West must recognise that our world is fast splitting in two.
On the one side is the way of life we recognise, based on international rules and a liberal free market. On the other is the darker prospect of an international order based on real-politik and authoritarian regimes.
Remember, in less than a week the map of Syria has been redrawn, with a Nato ally invading a neighbouring state, our Kurdish allies in Syria attacked, and thousands of jihadi prisoners roaming free. It has been a terrible few days for the so-called international rules-based order. China is watching and taking note.
With co-ordinated and concerted effort, we can avoid this drift towards a bi-polar world but this requires acknowledging our own failures. The West’s record with China in the last few centuries is not one of which we should be proud.
China has not forgotten the ‘century of humiliation’ (from 1839-1949) and exploitation at the hands of colonial powers including Japan, US, France and Britain – countries that now want China to play fair.
The Chinese Communist Party is quick to remind Western nations that they achieved dominance through force.
Yet China’s colossal economic growth relies on continued trade with the rest of the world. That is its Achilles heel. Bilateral trade with the US is worth £462 billion. Its prosperity is linked to the international community.
The rules of the old world order are out of date. The vast scale of technological advance has outstripped them and they must be renegotiated.
When, in 1944, the 44 Allied nations met at Bretton Woods to impose order amid the ruins of the war, China was not invited. Today, that mistake would be unthinkable. The world urgently requires Bretton Woods 2.0 – a recognition that our technology-driven world requires new rules and methods to enforce them.
According to President Xi Jinping: ‘There is no force that can shake the status of this great nation. No force can stop the Chinese people and the Chinese nation from forging ahead.’
We should listen.
The old world order is falling apart and our politicians need to build a new one. Fast.
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