China's Silent Army
Page 1
Translation copyright © 2013 by Catherine Mansfield
All rights reserved.
Published in the United States by Crown Publishers,
an imprint of the Crown Publishing Group,
a division of Random House, Inc., New York.
www.crownpublishing.com
CROWN and the Crown colophon are registered
trademarks of Random House, Inc.
Originally published in Spain as La silenciosa conquista china by Editorial Crítica, Barcelona, in 2011. This translation originally published in hardcover in the UK by Allen Lane, an imprint of the Penguin Group, London, in 2013. Copyright © 2011, 2013 by Juan Pablo Cardenal and Heriberto Araújo.
Library of Congress Cataloging-in-Publication Data
Cardenal, Juan Pablo, 1968–
[Silenciosa conquista China. English]
China’s silent army : the pioneers, traders, fixers and workers who are
remaking the world in Beijing’s image / Juan Pablo Cardenal and
Heriberto Araújo ; translated by Catherine Mansfield.
English translation of the author’s La silenciosa conquista china,
published in 2011 in Barcelona by Crítica.
Includes bibliographical references.
1. China—Foreign economic relations. 2. China—Economic
policy—2000– 3. China—Economic conditions—2000– 4. China—Commerce. 5. Economic development—China. I. Araújo, Heriberto.
II. Title.
HF1604.C26713 2013
337.51—dc23
2012047488
eISBN: 978-0-385-34658-0
Jacket design by Elena Giavaldi
Authors photograph: Christina Marti
v3.1
Heriberto:
For my mother, father and sister, and to Julie C. and the rest
of the Calderón Gómez family.
Juan Pablo:
To my wife and children, Cristina, Jimena and Bosco.
“Observe and analyze calmly, secure our position, tackle changes patiently, hide our abilities and wait for the right moment, keep a low profile, never claim leadership, carry out business modestly.”
The strategy announced by Deng Xiaoping in early 1990—shortly after the Tiananmen massacre—as a way of managing the changes taking place at that time. Largely, continues to dominate China’s international strategy to this day.
Contents
Cover
Title Page
Copyright
Dedication
Epigraph
Acknowledgments
Note to the English Edition
Introduction
Photo Insert
1 The Mingongs Take on the World
2 The New Silk Road
3 Chinese Mines in the New Wild West
4 China’s “Black Gold” Offensive
5 The Foundations of the Chinese World
6 The New Victims of the “Factory of the World”
7 The Chinese Miracle Defies the Planet
8 The Pax Sinica of the Middle Kingdom
Epilogue: The New Master of the World
Notes
Acknowledgments
This book would not have been possible without the help and support of Keiko Aoki, Gustavo Ayala, Ombretta Borgia, Lito Cardenal, Angelo Carella, Ricardo Córdido, José Luis Díaz, Jesús Egusquiza, João Feijó, Montserrat Galdo, Alicia García Herrero, Antonio Hidalgo, Ainur Kulzhanova, Rosana Lake, Anatoly Lebedev, Iván Máñez, Eduardo Morcillo, Gamble Nelkin, Awad Nubia, Mark O’Neill, Christian Phong, Philippe Robinet, Hkanhpa Sadan, Luis Tolosa, Jason G. Tower, Aliya Tshai, Mariano Turzi, Shannon Van Sant, Harry Verhoeven and Jumpei Yoshioka. We would like to say a big thank you to all of them for the invaluable help, logistic support, enthusiasm and time they have invested in this project.
Maddalena Simoncelli deserves a very special mention for her patience, hard work, support and kindness. We will never forget it.
We would also like to thank Liu Guijin, the Chinese government’s Special Representative for African Affairs, for his good-natured willingness to grant us an interview. Ambassador Liu has been the friendliest face of a government that we have otherwise turned to time and time again in search of answers without much success.
Our gratitude also goes out to the 500 people, approximately, who were interviewed for this book, and to the many more anonymous people across the world who unselfishly agreed to tell us their stories, helping our investigations by giving us the key to understanding what was happening on the ground; nor should we forget all the people who have contributed to our knowledge of China’s reality over the last few years. We would also like to give a special mention to the hundreds of Chinese people, both in the twenty-five countries we visited and in China itself, who welcomed us into their lives and helped us understand the inner workings of the Chinese world.
We also thank Félix Balanzó, Nicholas Bequelin, Madhu Bhalla, Enrique Criado, Geoffrey Crothall, Michael Elleman, Ángeles Espinosa, Josh Gordon, Fraser Howie, Guaicaipuro Lameda, Irene Jay Lui, Susana Moreira, William Nee, Alek Nomi, Pál Nyíri, Nicolás de Pedro, Xulio Ríos, José Manuel Seage, Ian J. Storey, José Toro Hardy and Víctor Torres for all of their comments, corrections and suggestions when revising these chapters. Their contribution has been invaluable and the responsibility for any errors found here rests entirely with us.
We would like to show our appreciation, too, for our colleagues at Notimex and El Economista for being so understanding when the posts of Beijing Correspondent and Hong Kong Correspondent were left empty while we were carrying out part of this project. We would like to give a special mention to Sergio Uzeta, Miguel Ángel Sola and Salvador Borja, as well as to Alejandro Valente, Alexandra Pineda and all the outstanding professionals working at the Spanish-language office of Radio France Internationale.
We would also like to say a big thank you to our editor, Vanessa Mobley, for her enthusiastic belief in this project from day one, to our agent, Felicity Bryan, for making this book go global, and to our translator, Catherine Mansfield.
A very special mention goes to our friend, the great photographer Luis de las Alas, who joined us on our “paradisiacal” journey through Africa. Part of this project also belongs to him.
Finally, our warmest thanks go to Wu Ye for her matchless efforts spent arranging paperwork, organizing interviews with Chinese people, translating, sorting out logistics and generally righting the wrongs that took place during the more thankless parts of our journalistic investigation from China. The same can be said for our friend and great adventurer H. S., who played a vital role in gaining access to Chinese projects and to the Chinese emigrants who are silently conquering the world. Thanks to him, we got much further on the ground than we ever could have done alone. It is a great shame that we have had to omit their real names here because of the reprisals they might otherwise face in China.
Note to the English Edition
Writing a book about a phenomenon as dynamic and complex as China’s international expansion carries definite risks. The emergence of the new Asian giant has such wide-ranging implications that, as you will see for yourselves over the course of the following pages, these inevitably create both light and shadow. A thin line often separates the positive from the negative, and this must be understood if we are to get to the essence of a phenomenon that is changing the world.
The playing out of events over the year since publication of this book’s original Spanish edition—with such abrupt changes as the global repercussions of the Arab Spring and the internal evolution of the Chinese regime itself, now moving somewhat turbulently through the first changes in the highest ranks of its leadership in a decad
e—could have made what we describe in this book obsolete. As it turns out, this has very much not been the case.
To the contrary, everything described in these pages has become further validated by the passage of time. This is not only because none of the phenomena explored in China’s Silent Army have lost their relevance, but also because the book’s principle thesis and conclusions have been reinforced. From Tehran to San Juan de Marcona in Peru, from Luanda to Hanoi, the rise of the giant is happening on an overwhelming scale, although still concealed by the lack of transparency typical of Chinese initiatives in the developing world.
China’s arrival in Africa, Asia, the Middle East and Latin America is the theme of the book in your hands, which has been fully updated for Anglophone readers. In it, we draw on countless human stories and over 500 interviews to describe how China is guaranteeing its future supply of natural resources, opening new markets and creating strong alliances. China is setting itself up as an autocratic superpower without any interference from the usual counterweights which might otherwise submit its world conquest to international scrutiny. We also examine the consequences of all this activity for the countries currently receiving investment, money and support from China.
The intensification of the financial crisis in 2012, whose painful effects have become particularly visible in Europe, has strengthened the hypothesis that we gradually developed over the two years of active research needed to write this book: that China’s expansion is inexorable, has a global scope and is driven by the depression in the West. Furthermore, the crisis has not only boosted China’s presence in the developing world, but has also already led the Asian giant to come knocking on the door of the West, which because of the economic turmoil itself currently offers some mouth-watering opportunities, particularly in Europe.
China’s conquest of the planet has therefore entered its second phase: a gradual entry into Western markets. This is done with the help of the indisputable firepower of its state capitalism, including its endless supplies of cash, its influential and seductive diplomacy, an army of tireless entrepreneurs and the sheer force of Chinese products, which are becoming ever more difficult to compete with. There is no doubt that we are witnessing the start of a long-distance offensive, which, however discreet and tactful, is nonetheless happening unstoppably—in the West as in the developing world.
If you are a lover of Bordeaux wine, for example, it may surprise you to hear that Chinese investors have engaged in the largest wave of investments at the world center of premium wine between 2010 and 2012, acquiring dozens of chateaux and properties. If you are interested in the world of high fashion, you may know that wealthy Chinese dressmaking companies based in Tuscany have already made a name for themselves in the “Made in Italy” market. Alternatively, you may have heard how Chinese millionaires are targeting the property market in the United Kingdom and United States.
And that is not all. The crisis has given the Chinese state the opportunity to acquire controlling stakes in strategic assets abroad, something that was always closed to them in the past. Now, thanks to the depth of their pockets and the West’s pressing need for investments to help create employment in the short term, China can easily sweep away the obstacles that have impeded its access to Western markets. The Chinese now have a clear road towards the West’s most valuable assets and technology, essential if China is to take a further leap forwards in terms of quality and innovation.
Perhaps the most important example—although by no means the only one—is Europe’s first “Chinese” port, the Port of Piraeus in Greece. This infrastructure of unique geostrategic importance has been managed by the Chinese state-owned company Cosco since 2009 and will be for the next thirty years, after the company paid out over 3 billion euros for the privilege. Similarly, Chinese state-owned businesses have landed at the heart of the Portuguese electricity sector, while a Chinese sovereign fund has acquired 8.68 percent of the British water company Thames Water. The expansion has even reached as far as powerful Germany, where China has become the largest foreign investor in terms of the number of operations, overtaking the United States for the first time in history.
There is no doubt whatsoever that this irruption—from Africa, Latin America, the Middle East and Asia to Europe, the United States and Australia—has set a momentous tectonic shift in motion, suggesting a new world order. Now is the time, for example, when the developing world will find out whether the Chinese recipe for success really is the best option for its development; when Brussels will continue maneuvering in an almost desperate attempt to realign its relationship with Beijing, a relationship which seems to be getting more asymmetric by the day; or when the United States will define the nature of its co-existence with a new world power.
At the same time, in domestic terms we are witnessing the transfer of power to a new generation of leaders in the upper levels of Chinese politics. This transition process began in November 2012 with the meeting of the Communist Party of China (CPC) and will culminate in the spring of 2013. It came as no surprise that the XVIII Congress of the CPC, which will put an end to Hu Jintao’s decade of power and establish Xi Jinping as the new strongman of the regime, has been shrouded in the usual veil of secrecy. What was a surprise, on the other hand, was the fact that the date of the congress was announced several weeks late as a result of the scandal unleashed by the so-called “Bo Xilai case.”
Bo Xilai was arguably China’s most charismatic politician, and the aura of success emitted by both his revolutionary heritage and his expeditious approach to politics had led him to be summoned as a new member of the next Politburo Standing Committee of the CPC. This is the country’s most powerful organism, which in practice decides the destiny of China’s 1.35 billion inhabitants. The role would have placed him in a privileged position to eventually reach the pinnacle of power, even giving him the opportunity to defy the established order.
All this probably would have happened if Bo hadn’t fallen from grace following China’s biggest political scandal to be made public in decades. The plot was thick with corruption, nepotism, betrayal and illicit million-dollar business deals overseas. Like some action-packed detective novel, it included the murder of a British business consultant and the attempted defection of Bo’s closest collaborator, the “super-cop” Wang Lijun. The regime attempted to plug the open wound in the reputation of both China’s political elite and the Party itself with Bo’s immediate expulsion from the CPC, as well as severe prison sentences for everyone involved.
The “Bo Xilai case” has once again shown how difficult it is to unite wills and reach a consensus at the heart of the Party, where balancing the influence of the various factions—from the military to the directors of the biggest state-owned companies, from the descendants of revolutionary leaders to the organizational heads of the Party—requires intense negotiations in order to make decisions and share power. With the downfall of Bo Xilai, the next president, Xi Jinping, is free of one of his biggest political rivals, and can now take up his new role with greater internal support than his immediate predecessors.
With his revolutionary blood and strong connections in the upper echelons of the military, Xi stands out for his pragmatic and technocratic approach to politics. However, it is difficult to judge how he will govern the most populated country on Earth, or what type of relationship he will establish with his regional neighbors, the West and the rest of the world. We must wait to see whether he will incline towards going ahead with the political reforms that were expected from Hu Jintao, or opt for the gradualism that has prevailed in high-level Chinese politics since the death of Mao Zedong.
Whatever happens, the future direction of global affairs depends on his sensitivity in terms of governing and how he will choose to wield his power during his decade-long mandate, during which time we might see China becoming the most powerful economy in the world. And, of course, his hand will hold the baton which will direct—in one way or another—the orchestra that will play to the so
und of China’s expansion across the planet.
As we already mentioned, this international offensive is taking place in the West, where it is still in the early stages but going strong, and in Africa, Latin America and Asia, where it has played an important role for over a decade and is described in detail in this book. Both campaigns run parallel to one another and complement each other, underlining an unstoppable and silent world conquest that is set to change the course of human history.
October 1, 2012
Introduction
“The Chinese can’t be seen … but they’re everywhere.”
An Egyptian shopkeeper in Cairo commenting
on Chinese immigrants in the city
For most people, this date perhaps no longer means anything at all, but at exactly 8:08 p.m. on August 8, 2008, history changed its course.1 That moment marked the beginning of the opening ceremony of the Beijing Olympic Games, the first event of its kind to take place in a developing country. It was an event that came shrouded in controversy and doubt. As well as the uncertainty caused by the organizers’ lack of experience there were concerns over the politicization of the sporting contest, a consequence of the latest of countless suppressed uprisings in Tibet that had occurred just months before and, more generally, of the dictatorial nature of China’s regime.
However, eighteen days later the Games came to an end with another spectacular display to match the one with which they began. China had passed the final test: the organization was outstanding and for the first time the country had become the sporting power to beat, overtaking the United States in the medal table. However, the greatest victory of all was not hammered out on the athletics track at the mighty Bird’s Nest stadium or in the cube-shaped Olympic swimming pool. The real triumph took place on the television sets of over 2 billion people who watched the event on the small screen and witnessed the fresh and likable image of a modern country confident in its own abilities: the image of twenty-first-century China.