China is a country about the size of the United States, but with four times as many people – twice as many as in Europe, more than in Africa.
China’s dimensions have always been difficult to grasp, but rarely has the country’s size, combined with its growing political and economic weight, become as apparent to the world as it has over the past eight years.
Xi has fulfilled an important part of his promise, but other hopes have been dashed. Prosperity has increased inside the country and there is also less poverty. At the same time, the power of the state has grown, with Xi having secured his office for life, cemented party rule and perfected the surveillance state. In the west of the country, hundreds of thousands of the Muslim Uighur population are in labor camps, and critics of the regime have fled or been silenced.
Internationally, China is leveraging its power more assertively than it has since the days of the great dynasties. In the South China Sea, Beijing has transformed islands into military bastions; and in Hong Kong, China has pushed aside an international agreement and imposed a draconian security law. Spurred on by the West’s weakness, China is expanding its influence.
China’s northeast is poor when measured against the rest of the country. Manchuria, with a population of 110 million, was once home to heavy industry: coal mines and cement works, steel mills and arms factories.
The north still hasn’t managed to make sufficient progress on structural change, despite billions in investments.
In Manchuria, China doesn’t look like the power and money machine that the West perceives it to be. It’s an emerging country — ambitious, but far from reaching its goal, a state that doesn’t succeed in everything it sets out to do. China’s massive export figures obscure the fact that per capita wealth in China is only about a quarter of that in Europe and America. Perhaps this is one of the reasons the leadership doesn’t trust its people.
Liu says the corona crisis is accelerating trends that emerged before the pandemic, some of which are beneficial to China. “Between March and June 2020,” he says, checking the numbers on his mobile phone, “China’s gross domestic product was only 5 percent below that of the U.S. The mood is good for tech companies in China.” This is in large part due to the fact that Beijing wants to become technologically self-sufficient. “It wouldn’t be this way if relations with Washington were better.”
Entrepreneurs still have more freedom to talk about sensitive issues than scientists, lawyers or even human rights activists. The state praises and encourages young founders like Liu, hoping to profit from their entrepreneurial spirit. But there are red lines that apply for them as well. The party’s primacy has once again become sacrosanct under Xi Jinping. It’s easier to talk about private matters than about the party.
But Zhang doesn’t trust the stock market boom that has swept China in the wake of the pandemic. In the large, industrial provinces along the Yangtze River where most of his clients live, the mood remains cautious. Some companies that manufacture products largely for export are suffering from weaker demand from certain countries.
Like Beijing founder Liu, Zhang is also worried about relations between China and the U.S. and believes the situation is even more fraught than Liu does. “I don’t fear a major war,” he says, “but I do anticipate a regional conflict in which China and the U.S. could get entangled.” The crisis scenarios he discusses with his colleagues focus on the island of Taiwan, which Beijing considers to be an “inalienable part of China.”
It is true that the majority of mainland Chinese consider Taiwan to be a part of China. But with the pandemic, nationalist sentiments have increased dramatically and are being promoted by state propaganda – to make people forget China’s failures at the beginning of the crisis, on the one hand, and to distinguish themselves from Western governments that are perceived as incompetent, on the other. By cutting itself off from the rest of the world, the feeling of superiority is being reinforced from the inside.
Hainan is today one of the most indebted provinces in the country.
This spring, the government decided to turn the whole island into what would become the world’s largest free trade zone. Since then, some in nearby Hong Kong have feared that Hainan could one day overtake Asia’s most important financial center. Gao doesn’t think that’s very likely.
He says that Beijing has another role for Hainan, one that goes beyond making it a profitable tourism center. The island, he says, is located on the “front line of a major geopolitical confrontation,” the conflict between China and the United States. From Beijing’s point of view, Hainan Province also includes islands in the South China Sea – islands that have been developed into military fortresses despite the fact that they are claimed by other countries. “The South China Sea is fully, comprehensively and seamlessly monitored by the Chinese defenses,” says Gao. “Every ship, every submarine, every hostile object is accounted for. War should not be an option, but if one broke out between China and the U.S., the South China Sea will become a graveyard for America’s ships. The Chinese never bluff.”