eg Chinese Voices
No. 38 | 27.03.2022
A third prototype of China’s indigenously-developed C919 large passenger jet makes its maiden flight in Shanghai Pudong International Airport.[Photo/COMAC]
Why China is sticking to the zero-Covid policy?
Zhang Wenhong
Zhang Wenhong(张文宏) is the director of the National Center for Infectious Diseases under the China Center for Disease Control and Prevention (CDC) and head of the infectious disease department at Huashan Hospital in Shanghai

Context

In the latest global Covid-19 break-out, over 1.1 million new infections were reported globally on March 21, with more than 60,000 confirmed cases per million people. Meanwhile, in China, 2,313 new cases were recorded on the same day, with only 92 confirmed cases per million people. However, the Chinese government still pledges to adhere to the "dynamic zero-Covid" policy to contain the outbreak. Zhang Wenhong points out that although the mortality rate of the virus has been greatly reduced and the vaccination rate in China has steadily increased (87.7 percent), "this is not a reason to lie flat (躺平tǎng píng)" – or staying indifferent – regarding the eradication of the virus. He explains the reasons why China is sticking to its Covid policy.

Key points

  • Of the 2,266 cases diagnosed in Shanghai in the last six months, most were imported cases, 94 percent occurred in vaccinated people, and only 0.1 percent of those infected became seriously ill. There are still chances of getting infected after being fully vaccinated, but the rate of severe illness and mortality is lower than that of the flu.
  • With this latest outbreak of surging cases, local governments have not been psychologically prepared and lack social resources to respond adequately. A full relaxation of controls now would cause massive infection rates in a short period of time, resulting in medical resources being overwhelmed and people's lives being extremely disrupted.
  • A high percentage of seniors and those with underlying diseases have not yet been fully vaccinated due to a fear of the vaccine's side effects, and thus, these two groups would bear the brunt should there be widespread infections.
  • It is crucial that we continue to adopt a "zero-COVID" policy to keep the extremely fast-spreading wave of Omicron to a fully manageable level; but this does not mean that we will adopt the long-term strategy of lockdowns or mass testing.

Summary

Zhang states that it is pointless to debate the "zero-COVID" or "coexistence with virus" policy. In the near future, China should enact a more comprehensive and sustainable response strategy to the pandemic, which includes providing the third dose of vaccines for all seniors, making oral medicines and affordable self-test kits more readily available to the general public, applying a more effective hierarchical diagnosis and treatment strategy, and continuing with the home quarantine process.

Dispelling the myth of the US model for China’s financial development
Zhang Yundong
Zhang Yundong(张云东)is a former director at the Shenzhen Bureau of China Securities Regulatory Commission

Context

The epidemic has given China the opportunity to rethink its financial sector and its positioning, including the influence of neoliberalism and the US financial model. As a result of the financial and real estate industries' extraction of enormous amounts of capital, and despite the central bank's monetary easing policies in recent years, the real economy has been facing financing difficulties, partly resulting in weakened economic momentum. Zhang Yundong believes that China needs to develop its own path that does not blindly follow the US financial model.

Key points

  • China has not yet learned the lessons from the 2008 US financial crisis. The financialization of China's economy has been remarkable. After the outbreak of Covid-19 in 2020, the net profits of China's listed banks rose 5.62 percent year-on-year in the first quarter, while China's overall economy suffered a 6.8 percent slump.
  • In 2006, the profits of Chinese industrial enterprises with annual revenue of more than 20 million yuan were 4.8 times the profits of financial enterprises; in 2019, it dropped to 2. In just thirteen years, the proportion of profits of industrial enterprises in the overall economy has shrunk, while that of financial enterprises has increased significantly.
  • The manufacturing sector, not the service sector, is the key driver of economic growth. Western countries have pursued "de-industrialization" policies over the past 30 years. In the US, this has created a large rust belt and widening gap between rich and poor. After the outbreak of Covid-19 in the Western countries, the epidemic was uncontrollable partly because of their inability to guarantee the supply of medical supplies.
  • Leveraged transactions and financial derivative transactions have the greatest probability of risk and greatest negative impact. Only on rare occasions do investors escape risk from trading in derivatives, but we have seen repeatedly that European and US financial giants have been hit hard by derivative transactions.
  • The fundamental goal of socialism is to maximize the interests of all the people. Unlike capitalism, which maximizes profit, socialism requires that finance must serve the interests of society as a whole and the real economy.

Summary

Since the 19th National Congress, preventing and resolving major financial risks have been listed as one of the three major battles. China must adhere to the “working for the best, preparing for the worst", (底线思维 Dǐxiàn sīwéi) approach of managing financial services for the real economy and enhancing the regulatory framework for financial derivatives. In terms of policy towards foreign investment, direct industrial investment should be encouraged, while financial investment and financial transactions should be managed more prudently. At the same time, the establishment of a statistical monitoring system should be accelerated, and contingency plans should be set up for large fluctuations and financial attacks.

The arrogance of the US against China over the Ukraine crisis is unacceptable
Li Haidong
Li Haidong(李海东) is a professor at the Institute of International Relations of China Foreign Affairs University

Context

Since the outbreak of the Russian-Ukrainian conflict, China has been actively mediating for a peaceful resolution. On March 18, President Joe Biden invited President Xi Jinping to a video call, where Xi proposed a Chinese solution to the Ukraine crisis. Li Haidong interprets Xi's statements and China's position on the crisis.

Key points

  • The prolonged conflict between Russia and Ukraine means that the European security framework and its structure is fatally flawed. This is demonstrated by the aggressiveness of a new NATO that is dominated by the US and its Cold War mentality.
  • In the call with President Biden, Xi Jinping's reference to "let the one who tied the bell on the tiger take it off”(解铃还须系铃人 jiě líng hái xū xì líng rén)refers to the fact that the US caused the crisis in Ukraine and should reflect on how to resolve it. Instead, the US attempted to blame China and tried to drag it into the process of the US geopolitical jousting with Russia. "It takes two to tango" (一个巴掌拍不响 yīgè bāzhang pāi bù xiǎng) refers to the fact that both the US and NATO should share responsibility in solving the Russian-Ukrainian conflict.
  • Many of the US sanctions against Russia and consequently against the rest of the world, originate from US domestic laws. They are typical of the long-arm jurisdiction used by the US, and they depart from international law and the basic principles in conducting international relations.
  • Four months ago, Biden affirmed, in a video meeting with Xi, that the US does not support "Taiwan independence" and has no intention of involving itself in China's internal affairs. Recent trips by some US officials to Taiwan to discuss arms sales, advocate for the return of the island to the United Nations' system, and to create an Asia-Pacific version of the Ukrainian crisis, prove that the US commitment of non-interference is only diplomatic rhetoric.

Summary

Li Haidong explains that the US is characterized by a short-sightedness in dealing with China-US relations. The US is only focused on China's help in reconciling the Russian-Ukrainian conflict. They show no sincerity in addressing the core issues of Chinese concern, like Taiwan, and they lack a pragmatic, rational, and strategic understanding of US-China relations. To deal with the crisis in Ukraine, as President Xi Jinping emphasized, the US should abandon its Cold War mentality, refrain from instigating bloc confrontation, and truly create a balanced, effective, and sustainable regional security architecture so as to achieve long-term peace and security on the European continent.

Behind the Huawei Ban: The rise of China’s industrial power
Lu Feng
Lu Feng(路风) is professor at the Department of Political Economy, School of Government, Peking University

Context

Huawei's 5G breakthrough, banned by the US and its allies, has led to a consensus among the Chinese people on independent technological innovation. Lu Feng has traced the origins of the driving force of the innovation of Chinese enterprises, i.e., the Chinese industrial spirit, and presented the rise and fall of China’s industries since 1949 and the robust revival in the 21st century.

Key points

  • There exists two seemingly contradictory goals since the founding of New China: eradicating extreme poverty to raise the people's standard of living (富民 fù mín) and following a politically independent path to make China a powerful country (强国 qiáng guó).
  • China's founding leaders made building a stronger country their first priority. From the 1960s to the end of the 1970s, China followed the strategy of independent technological innovation and made great breakthroughs in many fields. The successful research and development on the Two Bombs, One Satellite (两弹一星liǎng dàn yì xīng)was a typical example.
  • Since the end of the 1970s, the top priority of the government shifted to significantly raising the standard of living of the people by implementing reform and opening up policies. It also led to a total shift of the technological strategy, i.e., abandoning the guidance of “technological self-reliance and independence” and relying on imports to enhance technology. Typical examples of this policy were discontinuing the production of Hongqi automobiles and the Shanghai Y-10. The Chinese industrial spirit was on the wane.
  • During the 1980s and 1990s, the Chinese technology strategy could be summarized as the introduction of overseas advanced technologies, domestication of these technologies, and self-development. The policy, however, resulted in China’s heavy reliance on foreign technology and expertise, and led to the ‘low-end lock-in’ phenomenon of Chinese manufacturing in the global value chain. For example, China’s automotive industry was unable to develop a new vehicle model for 20 years.
  • The key factor in the revival of China's industrial spirit in the 21st century was the foundational capabilities accumulated during China's self-reliance(自力更生zì lì gēng shēng)phase. The technological origins of ZTE and Huawei's meteoric rise are based on China's first stored program control (SPC) switch machine. The SPC switch technical team participated in a Chinese military-led research and development project of mainframe computers in the 1970s.
  • Due to the 60-year accumulation of information in independent product development by China's railway and equipment industries, rather than the result of technology introduction, China, with its world-class high-speed train, has become the world's leader in transportation.

Summary

The author points out that the revival of China's industrial spirit is based on its first thirty years (1949-1979) of constructing important infrastructure so that it could industrialize the nation and shape the worldview of the Chinese people. The Taiwan Straits Crisis of 1996, manipulated by the US, has aroused the peoples' aspiration for a “stronger country”. Entering the WTO gave China a huge economic lift due to the development of global economic trade, but the country remained relatively low in the global supply chain. The recognition of the need to combine "becoming richer" with "becoming stronger" contributed to the revival of the 21st century Chinese industrial spirit. Industry practitioners have realized that China must take the lead in technological and industrial development to compete with global developed countries and inspire the growth of other developing countries.

Unity and Struggle between the Communist Party of China and Kuomintang during the War of Resistance Against Japanese Aggression
Jin Chongji
Jin Chongji (金冲及) is the former executive deputy director of the Literature Research Office of the Central Committee of the Communist Party of China (CPC)

Context

The Lugou Bridge Incident on July 7, 1937, marked the beginning of Japan's full-scale invasion of China. The the Communist Party of China (CPC), represented by Mao Zedong, established and firmly defended the National United Front Against Japanese Aggression (抗日民族统一战线 Kàngrì mínzú tǒngyī zhànxiàn) and eventually won the War of Resistance Against Japanese Aggression. In this article, Jin Chongji explains how the CPC united with the Kuomintang (KMT) to fight against Japan from 1937 to 1941, seeking cooperation in the midst of struggle, and applying the Marxist theory of creating a united front to the reality of the Chinese revolution.

Key points

  • On August 13, the Battle of Songhu broke out and the Japanese invaders approached Nanjing, the ruling center of the KMT; Chiang Kai-shek urgently needed the Communist-led Workers' and Peasants' Red Army(工农红军gōngnóng hóngjūn) to go to the front and fight against the Japanese.
  • During the Japanese aggression, it was the KMT's intention to destroy the Red army by "integrating" them into the KMT forces. Mao Zedong, however, raised the issue of "independence in the united front," insisted that the Red Army must have an independent political structure, and demanded the issuance of a declaration of cooperation between the CPC and KMT that affirmed the legal status of the Communists. Cooperation between the two sides was achieved.
  • After October 1938, the Japanese offensive slowed down, and Chiang Kai-shek instigated more aggression against the Communists, including the "Pingjiang bloodbath", which killed the correspondents of the New Fourth Army, and aggressively attacked the revolutionary bases in Shanxi and Hebei. Mao Zedong explained the attitude of the Communist Party by saying, "If people do not offend me, I will not offend them; if they offend me, I will offend them".
  • On March 11, 1940, Mao Zedong stated in his report "The Tactical Problems of the Current National United Front Against Japanese Aggression": "Struggle is the means, unity is the end". This was a clear guideline for the Communist Party to manage the complicated relations between the Kuomintang and the Communist Party.
  • In January 1941, the Kuomintang launched the South Anhui Incident in which the New Fourth Army suffered about 7,000 casualties, causing great indignation and condemnation within the Communist Party, the domestic public, and the international community. Chiang Kai-shek publicly pledged "not to suppress the Communists", and the Communists decided not to initiate a military counter-offensive.

Summary

The establishment of the National United Front Against Japanese Aggression was full of contradictions. The experience of the South Anhui Incident made the CPC realize the vital importance of "winning over the centrists". In order to fight against the Japanese invaders, even in the face of the KMT killings, the CPC insisted on a "reasonable, favorable, and moderate" struggle. The CPC's strenuous efforts avoided a split between the two parties and a civil war, and won over the support of the majority of the people, thus finally achieving a victory in the war of resistance against Japan and the War of Liberation(解放战争 jiěfàng zhànzhēng).

(Chinese Voices will continue to interpret the historical context and developmental logic of Marxism's Sinicization)

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