China's Silent Army

by Juan Pablo Cardenal,Heriberto Araujo

  When justifying his political decisions, Arias does not fail to mention Taiwan, which he criticizes for its “tight-fisted aid.” He assures us that he never went to Taiwan to ask for funding to pay for his electoral campaign, which other candidates supposedly did, not only in his country but across the entire region. Did that mean that China did not offer anything in return? “The negotiator, Bruno Stagno, is the one who knows the details on that matter,” he told us, evasively. Arias had already defended the intellectual reasons which had led him to throw himself into China’s arms, but he did not want to go into any details. As Arias is a master in the art of dodging questions, we assumed that the conversation was over. So we went to see Bruno Stagno, the former minister of foreign affairs.

  “The key moment took place on May 18, 2006,” Stagno told us at his home in San José. “Mexico invited me to a dinner at the Mexican capital which was going to be attended by every Central American country apart from El Salvador. To my surprise, the Chinese Minister of Foreign Affairs Li Zhaoxing was there. I immediately realized that all of the countries present were in conversation with China about establishing relations.” One small detail revealed that China was particularly interested in building a relationship with Costa Rica. “At one point in the dinner, he [Li] turned to me and said in French, ‘Both of us love Paris and that is why I think that the French capital would be the perfect setting for negotiating the establishment of bilateral relations.’ I immediately understood that he knew everything about our government. He knew that I’m married to a French woman and that I studied in France. I understood that the real negotiation process was already beginning, because I doubt that any other ministers there spoke French and could understand what he had said to me.”

  Soon after that a process of negotiations began which, according to Stagno, was spied on by Taiwan. “They tried to influence the Costa Rican press by giving them printing machines as gifts and inviting journalists to travel to Taiwan. Taipei knew that if it lost the support of Costa Rica it would be defeated in the diplomatic battle.” This “betrayal,” as it was seen by Taipei, finally took place in Beijing at two o’clock in the morning on May 31, 2007, after three rounds of negotiations. While China was raising the red flag in Central America, the “rebel island” saw the move as a well-aimed diplomatic blow. In order to achieve it, China had to bring $430 million to the table: $30 million in cash, $300 million through buying bonds in the Costa Rican Treasury, and $100 million in the form of donated Chinese goods (including the National Stadium).38

  Just as Taiwan had feared, Costa Rica’s decision had a significant impact on the other Central American governments. Countries such as Panama, Nicaragua and El Salvador began to show their willingness to follow the trail blazed by San José by recognizing China. However, by then Beijing had put the brakes on new additions to the club of countries which had sworn eternal fidelity to China in order to avoid jeopardizing its relationship with Taipei.39 With Taiwan’s recent change in policy and with Chen Shui-bian safely out of the picture, the new defections would have caused a wave of discontent in Taiwan which could have potentially derailed negotiations over the ECFA or disturbed the honeymoon that was beginning to take place between Beijing and Taipei. Therefore, after the first piece had fallen it was China itself which paradoxically put an end to the domino effect. The international and diplomatic battle had already been won: it seems that a truce is justified if the final goal is China’s reunification with Taiwan.

  Bruno Stagno makes a positive assessment of the last few years of relations between his country and China, although he admits that bilateral ties do have their challenges. “Japan and South Korea take us more seriously now,” he assures us, suggesting that the relationship with Beijing has helped to improve Costa Rica’s international position. However, he admits that “Costa Rica has lost some freedom” in terms of its foreign policy, in relation to issues such as Tibet or human rights. “The honeymoon is not going to last forever,” he concludes. “Chinese companies are going to have to adapt to local standards. We have always told China not to make the same mistakes as Taiwan,” he explains, in relation to the visa scandal linked to the construction of the National Stadium (described in Chapter 5).

  ENVELOPES FOR BUYING JOURNALISTS

  Perhaps the “mistakes” mentioned by Stagno have something to do with the episodes experienced by at least two Costa Rican journalists at the newspaper La Nación. The broadsheet, one of the most respected in the country, has closely followed relations between San José and Beijing and had therefore briefly covered the demonstrations carried out by the spiritual group Falun Gong—another specter of the Chinese regime, which is banned and persecuted in China—in the Costa Rican capital ahead of the first visit of the Chinese president, Hu Jintao, to the country in November 2008.

  “One day a Chinese journalist called me and said that his name was Jia Zechi. He told me that he was the chief correspondent in Mexico at the newspaper Wenhui and that he was in San José for a few days. From the beginning he showed an interest in finding out about the atmosphere surrounding Hu Jintao’s visit, particularly in relation to potential protests by groups critical of Beijing’s regime. We arranged to have dinner to chat about it,” one of the La Nación journalists told us in the Costa Rican capital. “We met at the restaurant of the Grano de Oro Hotel, close to the Paseo Colón. At least six people of Chinese origin entered the restaurant in the space of ten minutes. Jia was a young man, about thirty years old, and dressed in informal clothes.

  “He immediately began to ask me about the Falun Gong group and he told me the Chinese version of the conflict. Then we talked about Tibet, also following the official version, and in the end we didn’t say anything at all about the diplomatic relationship between China and Costa Rica, which is what he had originally said he wanted to talk about. He only took notes once, when I told him about the appearance and number of the Falun Gong protesters. Over the course of the conversation I became very aware of several people who appeared to be Chinese who were walking around the restaurant and who changed table on at least one occasion,” remembers the source, who at that point was already beginning to suspect that Jia was not the journalist he claimed to be.

  “When I was about to leave, he told me that he had a present for me. He joked about the idea that the Chinese always give tea as a gift and he took out a red packet which he said contained special green tea. When I had already stood up from the table, Jia added that he had ‘something else’ for me, as he understood that the meeting and the information I had given him meant that I was working overtime. He immediately took out an open white envelope, which I could see contained money in cash. They looked like fifty-dollar notes and I think there were no less than fifteen [$750].

  “I immediately rejected the offer, giving personal and ethical reasons based on company policy and common sense, as I didn’t feel that I was working for anybody at that time. He tried to insist, using arguments such as ‘we Chinese are not used to people rejecting our gifts’ and ‘don’t worry, it’s not a check, it’s only cash.’ He tried to make me take the envelope and look at the money, and he made it clear that if I wasn’t satisfied with the amount then there could be more payments in the future. Straightaway, I took my hands off the table. I had realized that outside the restaurant there were two Chinese men who were going to take my photograph as soon as I touched the envelope. When I continued to refuse, Jia got up and left.”

  Epilogue: The New Master of the World

  “China is not a superpower, nor will she ever seek to be one. If one day China should change her color and turn into a superpower, if she too should play the tyrant in the world, and everywhere subject others to her bullying, aggression and exploitation, the people of the world should identify her social-imperialism, expose it, oppose it and work together with the Chinese people to overthrow it.”

  Deng Xiaoping, speech made at the UN, April 10, 1974

  It was raining cats and dogs in Caracas and Dr. Mei Qixi
an insisted on accompanying us to the Chinese restaurant on the corner, barely 100 meters from his traditional medicine clinic. “This is a very dangerous place. I don’t want to leave you alone,” he insisted, with his umbrella in hand, as we walked along the rundown streets of the Venezuelan capital. A sense of paranoia caused by insecurity had spread like wildfire among Venezuela’s Chinese community, which was going through a difficult time at the end of 2010 having become the favorite target of organized crime groups. The community’s traditional success in business—the fruit, among other things, of a matchless capacity for self-sacrifice—had made them juicy prey for kidnappers, murderers and crooks whose criminal activity had multiplied exponentially since Hugo Chávez came to power.1

  Walking along behind this thin, fragile man whose Spanish is barely comprehensible despite having lived in the country for twenty years but who makes up for this with exceptional poise and exquisite manners, we saw in him all the virtues that are innate to the Chinese people. Mei had arrived in Venezuela from his native Enping in Canton province with the sole purpose of practicing acupuncture and building himself a better future. He chose to try his luck in an unknown land on the other side of the world, with nothing but the basic knowledge of a type of medicine which sounded like little more than shamanism in the Latin American country at that time. However, his skill in the ancient techniques of traditional Chinese medicine and his own hard work triumphed over the prejudice and xenophobia which dog the footsteps of Chinese emigrants wherever they go. Today, Mei enjoys a comfortable life and the social status which comes from having been the personal doctor to three Venezuelan presidents.

  Characterized by a constant sense of struggle and the blind determination to succeed, Dr. Mei’s story was something that really stuck in our minds. It mixed with the memory of the shanta sini pushing their heavy bundles full of cheap clothes through the dark streets of Cairo, or the image of the Chinese workers exploited in Gabon who we met at our office in Beijing. It also mixed with the tales of all the other anonymous emigrants with their enviable will to survive and their hard and honest work whom we had met throughout our journey. With their admirable flesh-and-blood stories, some of which are captured in this book, they are all silently weaving the spider’s web of a historic and unstoppable phenomenon. They are the living proof that China’s hour has finally arrived; that the Chinese world is already here.

  These courageous laborers, engineers, tailors, traders, cooks and entrepreneurs put a human face to China’s conquest of the planet. It is their hands which are carrying out the biggest reconstruction of Africa since the colonial era, building the new Angola, laying asphalt on thousands of kilometers of roads throughout the continent. Meanwhile in Central Asia, their work building oil and gas pipelines has allowed gas from this remote and strategic region to flow into the kitchens of Shanghai and Beijing. This titanic effort, which has created new ports, roads, dams and football stadiums across the world, is perhaps the most visible face of China’s global expansion. However, it is just the tip of the iceberg.

  The long shadow of the Chinese state inevitably looms over all these infrastructure projects. It is determined to regain the superpower status in this new century which it enjoyed for hundreds of years, up to the beginning of the 1800s. “The world talks about the emergence of China as if it were a new phenomenon, while in Beijing it is simply seen as a return to the natural state of things: a state in which China comes first in everything,” says Pankaj Ghemawat, economist and professor at Harvard University. The developing world—with its abundant natural resources and virgin markets waiting to be exploited—plays a fundamental role in this strategy aimed at situating China once more at the center of global affairs.

  In developing countries, China’s re-emergence is not only looked on with approval but with outright enthusiasm in the case of many political elites. “This twenty-first century is the century for China to lead the world. And when you are leading the world, we want to be close behind you. When you are going to the moon, we don’t want to be left behind,” said the then Nigerian president Olusegun Obasanjo during Hu Jintao’s visit to the African country in 2006. This speech sums up the sense of relief which is generally felt by the leaders of developing countries when faced with the prospect of a multipolar future world, with China eventually taking the role of conductor of the orchestra. Beijing’s powers of seduction combine the use of a subliminally anti-colonialist discourse with a chameleon-like diplomatic strategy, while simultaneously using multi-million-dollar investments to unfold the tentacles of its influence throughout the planet.

  Beijing’s double standards demonstrate the first of these factors. For example, China intervened at the UN to put an end to the civil war in Sudan, and yet it also gave a ceremonial welcome to the Sudanese president, Omar al-Bashir, who is wanted by international law. An example of the second factor can be seen in the $340 billion which Chinese companies (most of them state-owned) paid out between 2005 and mid-2012 in places such as Sri Lanka, Zimbabwe, Brazil and other countries. All this took place within the context of a crisis which caused the West to fall into the trap of its own financial system, giving China the boost it needed to become the new “world’s banker”: the perfect springboard for conquering the world.

  History shows that access to financial clout is essential. Experts pinpoint the transition from European to American dominance in the early twentieth century when the United States became the world’s biggest lender and—like China today—a manufacturing superpower.2 Under Washington’s lead, the United States went on to create the United Nations and to found international financial institutions such as the World Bank and the International Monetary Fund, as well as liberalizing trade. These three elements are characteristic of the world order established after the Second World War. China is currently living through a similar situation to the one experienced by the United States during the interwar period: industrial expansion and access to an almost unlimited amount of financial muscle. If this is so, does this not suggest that the Asian country is treading the same path towards overturning the current status quo and laying the foundations for a new world order?

  Perhaps it is too early to give a definitive answer to this question. However, there is no doubt that the whole planet can now hear the deafening grinding of the tectonic movements caused by the rise of China, whose unique model, values and modus operandi are generally looked on with a mixture of admiration and fear. The new world order is excellent news for many countries in the developing world. China’s pragmatism offers undisputable benefits to, for example, the many African countries that today have access to infrastructure which they had never even dreamed of, as well as affordable Chinese products. We are not only talking about a great variety of hardware, “Made in China” jeans and mobile telephones, but also cars, technology and machinery which are particularly attractive in Africa, Asia and Latin America because of their competitive prices. But that is not all. As well as offering cheap goods to supply these markets, China is also a reliable long-term buyer.

  In this sense, China’s insatiable demand for raw materials represents a golden opportunity for countries which are rich in natural resources. Chinese companies working in the extractive sectors are more inclined to take risks than their Western competitors, and they arrive in these markets with their own financing, technology and human resources under their arms in order to maintain, increase or embark on the production of oil wells, rubber or soya plantations and mineral deposits. With the support of the Chinese state, state-owned corporations can make decisions quickly and do not turn their backs on business opportunities with meager margins, as they know they are also entrusted with securing the nation’s strategic interests: China’s future supply of raw materials and, by extension, its energy security.

  Chinese demand and consumption have sent the price of raw materials rocketing to record highs, resulting in lasting trade flows and significant incomes which, in theory, should serve to modernize the receiving countries
and help raise millions of people out of poverty. Furthermore, the value of the resulting infrastructure is not insignificant and should not be taken lightly, even if many of the roads or railway lines were originally conceived in order to facilitate projects aimed at extracting natural resources. However, China’s “charm offensive” for natural resources fuels the heated debate surrounding the real impact of these projects. What returns are the owners of the resources getting on these projects? “There is no denying the positive effects [of the charm offensive], which have an impact on the balance of trade and allow an outflow of income which filters down to the entire economy. However, that is not enough. That is not how development happens,” says Javier Santiso, a former senior economist at the Organization for Economic Co-operation and Development (OECD) and current professor at the Esade Business School in Madrid.

  The views of this renowned academic go straight to the crux of the matter. His words refer to the strategic error being made by many countries rich in raw materials: by not insisting that China should provide added value to their economies and by positioning themselves as simple primary suppliers of resources, they are wasting the opportunities offered by China’s urgent need for supplies. It would only be a simple matter of using the strategy enforced by Beijing thirty years ago3 when it opened its doors to foreign investments in exchange for knowledge transfer and the creation of wealth and added value at a local level. An example of what might have been but wasn’t can be seen in the case of lithium, a rare mineral of strategic importance because of its role in the production of batteries and mobile phones. Bolivia is one of the countries with the largest reserves of lithium in the world. “The lithium export market is worth a billion US dollars; the market for exporting electric batteries is worth 25 billion dollars and the market for exporting the cars which use electric batteries made from lithium is worth 200 billion dollars,” Santiso explains. “Being positioned, as Bolivia, at the first link in the production chain is a waste of a strategic opportunity.”