Generation 40s – 四十世代

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China’s rise is assured in our new world order, but not as a hegemon

CommentInsight & Opinion
2017-10-13
Jean-Pierre Lehmann says though one major power dominated the past two centuries – Britain in the 19th and America in the 20th – in the 21st century, no single country will be calling the shots. Instead, the tussle for influence will be fiercest on the Asia-Pacific stage

During most of my working life, I have commuted physically and intellectually between western Europe and East Asia, where I spent part of my childhood and where I have over the years lived, studied, worked and taught. Of course, to get from one to the other, one has to traverse the Eurasian continent. Which is what I did. In the late 1960s/early 1970s, for example, I would take a ship from Portsmouth to Leningrad (as it then was), a train from Leningrad to Moscow, a plane from Moscow to Khabarovsk, a train from Khabarovsk to Nakhodka, a boat from Nakhodka to Yokohama, then, the final leg, a train from Yokohama to Tokyo.

I would occasionally stop for a few days along the way. The icy cold war atmosphere notwithstanding, the warmth (and liquidity: lots of vodka!) of Russian hospitality lived well up to its reputation. I had read in my teens lots of Russian literature, and was enthralled when I read 15 years ago that splendid history of Russian culture, Natasha’s Dance by Orlando Figes. That was 15 years ago, a year after China acceded to the World Trade Organisation. In the meantime, academically I remained an East-West guy.

I watched, totally bedazzled, the transformations occurring in the Asia-Pacific, especially the awesome developments in China. As a product of the mid-20th century, I was influenced by the view that the words “poor” and “Chinese” were synonymous. This was true not only in the West – whether in Europe or the United States – but also in Japan. The Chinatown in Yokohama, which I occasionally visited in the 1950s with my parents (who lived at the time in Tokyo), was poor. In the second half of the 1980s, when I was based in Tokyo, as rumours of a potential Chinese growth story began circulating and Japan was experiencing stratospheric growth, I found Japanese I spoke to quite dismissive.

By the beginning of this century, the China narrative has been dramatically transformed, as has its impact on the world. The global balance of economic power is moving from West to East, as the Atlantic centuries seem to be entering their concluding chapters and an Asia-Pacific century emerges in the 21st.

Europe’s clout has declined, economically, geopolitically and demographically, and will continue to do so. The US remains a formidable power, but its days of hegemony are reaching their end. The institutions that Uncle Sam put together after the second world war – the United Nations, the World Bank, the International Monetary Fund, the WTO – are becoming moribund. George W. Bush’s illegal invasion of Iraq in 2003 and its catastrophic consequences have undermined American geopolitical and moral leadership; while Donald Trump’s bombastic “America First” rhetoric provides a sort of tragic operatic finale. How embarrassing it must be for Americans to witness this Caligula-like figure drag the country down into barbarity. As Angela Merkel confirmed in her speech in Munich in May, the Western alliance, founded after the war by the US and the UK, is eroding.

The fact that the world is at a turning point is beyond dispute. Where it is turning to is another matter. Because the last two centuries have been dominated by one major global power – Britain in the 19th, the US in the 20th – there is an assumption that it must be someone else’s turn. (Presumably, China?)

In fact, as author Ian Morris compellingly argues in Why the West Rules – For Now, the history of the Eurasian continent – where civilisations flourished and history was made – was one of exchange, mutation and what we would call today, “multipolarity”. Rudyard Kipling’s famous “East is East and West is West” poem portrays a 9th-century imperialist view of the world, and does not correspond to historical reality. Throughout the millennia, Eurasian societies, emanating from five major civilisations (Chinese, Indian, Persian, Arabic and European), fought with each other, traded goods, sciences and ideas with each other, as they learned and borrowed from each other. There was no East and West, Europe and Asia. Arabic thought influenced the Renaissance; Confucian thought influenced the Enlightenment; India invented and developed the zero.

Things began changing with the rise of the Portuguese seaborne empire in the late 15th century. Initially incrementally, then, from the early 19th century on, rapidly and radically, Europe rose as virtually all of Asia declined. Europe’s “superiority” ensured Asia’s subjugation. This century is witnessing the resurgence of Asia; especially the rise of China as a global power. The idea, however, that the world was following a pattern and that China would emerge as the coming hegemon seems unconvincing.

Not clear as to where we’re now heading, I was intrigued when I read President Xi Jinping’s speech in Astana on September 7, 2013, in which he launched what has since become known as the “Belt and Road Initiative”.

I have made a considerable effort over the past four years to become more immersed in Eurasian and Central Asian historical patterns, contemporary dynamics and future prospects. I have travelled not just physically, but also intellectually across much of the Eurasian continent. This has included most recently an intensive week of discussions in Moscow with Russian interlocutors from different professions and generations (including a high-school class of 15-year-olds) to hear how they see the world.

Here, I wish to emphasise the concept that Dmitri Trenin, director of the Carnegie Moscow Centre, introduced me to, and which I found very useful in constructing my new view of the world. Whereas recently, there has been much talk of whether Russia is pivoting to the East or maintaining its historical ties with Europe, Trenin speaks of a “360-degree vision, where Moscow serves as the central element of a new geopolitical construct: Eurasia writ large, aka Greater Eurasia”.

In this Greater Eurasia are the former great civilisations and great powers: China, India, Mongolia, Korea, Japan, the members of the Association of Southeast Asian Nations (especially Indonesia), the countries of Central Asia and the Levant, Russia, Turkey and the European Union. The EU’s past was integrated into that of Eurasia, and so, it would seem, will be its future. As Merkel implied in her speech in May, with Brexit and the election of Donald Trump in 2016, the Western alliance has reached its twilight.

In this Greater Eurasian space, China clearly dominates. Its gross domestic product is roughly 10 times the size of Russia’s and more than five times the size of India’s. But for a number of reasons, there will be no Chinese hegemon comparable to the UK or US. China is unlikely to match the US in hard power, and its soft power is weak.

The UK and the US gained hegemony in part by waging brutal imperialist wars and enforcing exploitative subjugation on much of the world – in Asia, Africa and Latin America. Whether China can be different, whether it can achieve its “peaceful rise”, will be the dominant question this century. Greater Eurasia is full of exciting potential. It is also, however, a geopolitical cauldron. Whatever happens, the narrative of the 21st century will be written there.

Jean-Pierre Lehmann is emeritus professor at IMD, founder of The Evian Group, and visiting professor at the University of Hong Kong

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With cowboy Trump leading trigger-happy America, should the world worry?

CommentInsight & Opinion
2017-10-10
Tom Plate says gun culture is in the DNA of America, represented by Donald Trump in the best tradition of John Wayne Westerns. Until diplomatic balance is achieved, this is a fact that the world, including China, must live with

Individual gun ownership is a right proffered under the ­second amendment to the US Constitution. In killing 58 people and injuring about 500 last week, the perpetrator of the Las Vegas mass shooting had at the ready about two dozen guns in his hotel room, and dozens elsewhere. The average citizen’s right to bear arms mirrors the way the US thinks about foreign relations – which will also lead to unnecessary tragedy.

These days, neither near-absolute gun rights at home nor the reliance on military power abroad is working well for America. The Las Vegas massacre prompted knowing shrugs and dismissive ­gestures around the world. America is widely viewed as gun crazy and, after last week, the world might well view roll-the-dice Vegas as a symbol for our culture of risk.

Foreign policy is no easy subject even for university graduate students; so imagine my fear standing in front of a packed classroom of Chinese middle-school students, visiting my Loyola Marymount University not long ago, where I was to offer 90 minutes about US relations with the world. What does – what can – a professor say to 12- to 16-year-olds from Shenzhen? A John Wayne simulation seemed the best option – staging a virtual foreign-policy shootout. These great kids were asked to make believe they were in a Hollywood movie – like a John Wayne Western, with the Good Guys (white hats) aiming to take down the Bad Guys (black hats). After a few cowboy videos to illustrate, and utilising classroom rulers as guns, we randomly decided on a few Bad Guys to shoot and had the white-hats (more aggressive-looking kids) go after them, rulers blazing. Before long, we had got rid of all the Bad Guys (bad actors, rogue nations) who were of course responsible for all the “problems” (international tension, war threats).

Having created this virtual ­utopia, the students were gleeful and proud, until it was pointed out that two of the dead Bad Guys were really Good Guys. While they were shot by innocent mistake, they were still dead, and so now we had a different problem. How to tell the bad from the good guys – you can’t just shoot everyone.

The kids got the point – that trying to “solve problems” by pulling a gun and looking for troublemakers creates dangers itself. Yet, from Vietnam to Iraq, the US seeks to ­improve the world with guns and militaristic poses, though we are hardly the only country with a big military. In fact, the session ended with the classroom-wide hope that China will not “go cowboy” when faced with foreign-policy “problems” but will find a smarter way.

Alas, in America, the historic Chinese naval build-up has raised fears, not eased them. But, in addition to that new worry is the related fear that we Americans are starting to have about ourselves. Suddenly, there are visible holes in the “Great Wall of American ­exceptionalism”. To employ Jean Paul Sartre’s prescient phrase, it is as if the West understood it “was springing leaks everywhere”.

Las Vegas, where more people died than in any comparable incident in US history, ­offered unmistakable evidence of structural societal leakage.

Irrationality can be a symptom of insecurity: if you add up everything spent on defence not just by giant China but also by Russia – and also add in the defence budgets of Britain, Japan, India, France and Saudi Arabia – it all still bulks up to less than the US continues to spend.

China did not cause this long-running American spending binge that sets history’s high bar for perpetual militarisation. Such was in our DNA – macho movie star John Wayne rolling in front of our eyes with all the self-confidence we imagine guns can buy. Given a cultural heritage like this, might not President Donald Trump, a former casino owner, conflate a blazing missile offensive with hitting the jackpot? We hope not – but would it really be totally out of character when you consider his characteristic John Wayne public posturing and tweeting over North Korea?

“Sorry – but only one thing will work”, he bellowed over the weekend about Pyongyang.

Admittedly, there is no doubt that the rise of China, which started decades ago, of course, but only relatively recently caught the attention of the US public, has added weight to the droop in confidence – and need for ego reinforcement.

So, just as the gun-control movement in America will probably go nowhere, so too movement in ­reversing national armament levels – including, sadly, nuclear weapons – will go nowhere. DNA is destiny: and this is what the world, not to mention China, must be prepared to live with.

It is the one very big takeaway from the Vegas tragedy.

The so-named “Thucydides Trap”, so popular in certain circles, hypothesises that when the fast-rising power threatens the dominance of the established power, the conditions for war between them intensify. But it’s only one hypothesis.

Another hypothesis (mine) says that when the rising power brushes up against the established power, the rising power – if it is smart – will negotiate differences to keep a ­rational lid on its armaments spending, thus freeing up funds for the people’s true welfare.

This is the “Alliance-for-Progress Escape from the Thucydides Trap”. I know, it’s no catchy phrase. But it does propose a path away from hell, which is what happened in Vegas, reminding us anew that the violence option is often the problem itself.

To believe otherwise – especially in this nuclear age – is, well, moronic. Getting the balance right is the best way to avoid becoming seriously unbalanced.

Columnist Tom Plate is a Loyola Marymount University professor and an author of many books about Asia, including the recent Yo-Yo Diplomacy


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How Hong Kong can maintain a competitive edge in fintech development

CommentInsight & Opinion
2017-10-11
Kenny Shui and Jonathan Ng say Hong Kong should learn from Singapore, Australia and elsewhere to create a more helpful regulatory environment for foreign and start-up financial technology developers

Hong Kong is a well-known international financial centre, and financial technology is one of the major trends affecting the global financial community. Two weeks ago, the Hong Kong Monetary Authority outlined a plan to launch an enhanced fintech supervisory sandbox this year. It’s clear the government is taking fintech seriously.

The HKMA’s sandbox, along with the Securities and Futures Commission’s and the Insurance Authority’s new sandboxes are all examples of a “safe place” for fintech entities to test products in a restricted environment without the usual regulatory consequence of pilot activities.

We recently presented an advocacy study highlighting four aspects of the existing fintech supervisory sandbox that could be improved: collaboration, inclusivity, facilitation and scalability. It is encouraging to see that the HKMA’s enhanced sandbox reflects our considerations in at least three areas, but we still believe improvements can be made.

The first aspect is in collaboration. Plans to link the SFC’s and Insurance Authority’s new regulatory sandboxes with that of the HKMA, creating a single point of entry for cross-sector fintech, is welcome.

But because Hong Kong has separate regulators, time and effort may still be needed to assess the viability of linking the three sandboxes. Thus, the government should consider a new administrative office, perhaps under the existing Financial Stability Committee. This would allow multiple inputs from different regulators, so the administrative office could ensure cross-sector regulatory procedures are more streamlined and efficient.

Second is inclusivity. We appreciate that the HKMA is taking the needs of fintech firms into account, establishing a “fintech supervisory chat room” to provide direct feedback, but they still need to collaborate with banks to participate in the fintech supervisory sandbox. Sandboxes in jurisdictions such as Australia, Singapore and the UK are even accessible for fintech start-ups.

Therefore, a more inclusive approach for fintech start-ups should be considered. The administrative office should grant eligible start-ups up to 24 months for product testing.

The third aspect is facilitation. While the plan to set up a single point of entry to facilitate cross-sector fintech product testing is welcome, further improvements are possible. More specifically, there is no single point of contact in Hong Kong to assist overseas fintech companies in obtaining operating licences.

Take as an example Lufax, one of China’s largest internet finance platforms, which chose Singapore over Hong Kong to set up its first overseas platform. The decision can be attributed to the fact that Singapore has a single regulator to deal with, while Hong Kong’s various regulators made the licensing process more time-consuming.

Hence, the new administrative office should act as a one-stop shop to assist large and overseas fintech companies get the appropriate licences by dealing with the different regulatory bodies if they want to establish a platform in Hong Kong.

Lastly, while the HKMA has made attempts to address the three aspects above, scalability needs to be considered. Once the testing period ends, successful fintech start-ups can either obtain a full licence or consider reapplying for the sandbox if a licence has not yet been granted. However, those eligible to reapply may want to expand their market reach.

To rectify this aspect, upon successful completion of sandbox testing, the start-up could be allowed to apply to have their initial testing restrictions lifted, such as by expanding the number of customers.

Improving Hong Kong’s regulatory sandboxes does not necessarily mean we will succeed in fintech. However, if we don’t try to improve, the chances of success will be diminished. In light of Hong Kong’s comparative advantage in finance, we should seize this opportunity and maintain our competitive edge in fintech development.

Kenny Shui is a senior researcher and Jonathan Ng is an assistant researcher at the Public Policy Institute of Our Hong Kong Foundation


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Hong Kong’s young democracy campaigners risk losing sight of the real changes needed in society

2017-10-06
Anson Au says democracy is just another form of government, far from perfect and equally prone to ideological excess. Instead of chasing universal suffrage, Hong Kong needs to negotiate the best way forward to create a better society

The past couple of weeks have seen a resurgence in the push for democracy among youth in Hong Kong. Zealous cries for a new order have filled the air once more, in the wake of the anniversary on September 28 of Occupy Central, which ignited massive dissent among thousands of youth bound to the vision of democracy.

And just two weeks ago, former governor Chris Patten concluded his four-day visit by rallying Hongkongers to the pursuit of democracy and urging Beijing to consent.

Joined by a host of global media outlets, these sentiments betray a belief in the inherent good of ­democracy – but overlook the purpose of governance itself.

We must stay grounded. ­Democracy, as with all forms of governance, is but a means to an end – which is the establishment of a good society. My research explores what constitutes a good society and what can destroy it, and it shows that the answers don’t lie in any one form of governance.

We must separate ideology from practicality in the context of governance for a good society. As history tells us, it’s when we fail to do so that a society moves to atrocious ­extremes.

First, democracy is not without its dark side. Whereas popular belief holds that it’s inherently good, political research uncovers the ­uncomfortable truth that this isn’t the case. Democracy is not built upon the premise of bringing about “the most good for the majority”. Rather, it’s structured upon “the most good decided by the majority”.

Both modern history and the ­recent past have witnessed atrocities willed into being by the majority of a given society. Minorities in a populace often belong to economically impoverished and politically marginalised categories. As such, they possess significantly less ability to resist convenient and swift suppression by a hostile, intolerant majority. In Yugoslavia, they were the Bosnian Muslims and Croats, popularly hated minorities unable to resist violence by Serb militants.

In the days leading up to the establishment of Nazi Germany, they were the already stigmatised Jews, homosexuals, elderly and disabled – powerless to resist oppression, arrest and cleansing by a regime that channelled, rather than moderated, ideological hatred among the majority.

In Rwanda, they were the Tutsi and moderate Hutu leaders, defenceless against the anti-Tutsi radicalism washing over the Hutu state. The result was the infamous Rwandan genocide, whose ghosts still haunt the nation and human rights committees the world over. When organised by the majority alone, the state becomes a voice for the majority alone – rather than moderate hateful sentiments harboured by the majority, it channels them.

Strongman ­tyrants can ascend to power in democracies by capitalising on ideological fervour and insecurities among the majority. We need not look very far into history: the broad, recent rise of the far right across Europe and America prove the contemporary relevance of this admonition.

Both Geert Wilders in the Netherlands and Marine Le Pen in France championed, to great success, Islamophobia and the rejection of refugees in appealing to lower- and middle-class xenophobia. They were only narrowly beaten by more moderate candidates.

In the UK, Brexit attracted popular support, despite the economic disasters that pundits confirmed it would bring. On the ill-informed, misleading platform that Britain could accrue more capital outside the European Union, Brexit succeeded in convincing a majority more invested in nationalism than practicality. And most recently, Donald Trump rose to the White House by targeting immigrants and trumpeting the purge of big money from governance. Manipulated for their insecurities with employment, a majority rallied behind his claims, despite his very apparent financial conflicts of interest.

Second, Hong Kong is seeing divisions between the young and old. Young adults have lashed out against older citizens for retreating from the push for democracy, ­accusing them of political apathy, or worse, treason against Hong Kong society. But difference should beget discussion, not exclusion.

The legacy of Occupy Central has been … distorted into ideological fervour among youth

Incendiary reactions to difference show how the legacy of Occupy Central has been an improved consciousness of democracy, but distorted into ideological fervour among youth not unlike that of the Red Guard and other cross-national cases in world history. The convergences evoke historical memories of very real dangers.

In China, the Red Guards turned over their families, peers, teachers and schools to state punishment. In Cambodia, French-trained cadres led by Pol Pot swept the country with party purges and fratricides for a modernised, agrarian society.

Both cases show what happens when a country’s young ideologues rally behind a mode of governance for its own sake. Families are divided; the younger and older generations are split; unrest and violence ensue. Institutions embodying tradition are destroyed, and evidence-based assessments of what’s good for society are abandoned. Uprooting a plant always pulls up with it soil, grass, and living creatures. What does a heavy-handed democratic revolution threaten to uproot – policies, relations, institutions – along with the existing mode of governance? What will fill the gaping hole left in the earth afterwards? Who will benefit?

What does a heavy-handed democratic revolution threaten to uproot along with the existing mode of governance?

Third, stop focusing on democracy. Democracy, as with any governance, is only a means to an end. Thinking otherwise gives rise to ideological sentiments with disastrous consequences, as historical precedents have shown.

Furthermore, it distracts us from discussing the changes, the actual fruits of governance, that we want to see. Affordable housing; more ­resources for health services; a better old-age living allowance.

The calls for universal suffrage fail to address how any such issues or policies would be improved.

Real, positive change can only happen in Hong Kong by negotiating at the table, not by overturning it and attempting to build a new one; by engaging with actual policies and relations, instead of an abstract “fight”; by discussing the real, concrete needs of Hong Kong citizens, more than ideals written by a few on paper. We must forego visions of governance motivated by ideology to see the ends, rather than the means, in order to build a better society and prevent disaster.

I do not blame ethnic majorities for extreme crises. Ethnic majorities do not create extreme crises, but they can empower the ones who do: ranging from the endorsement of right-wing fascism to platforms that literally fracture nations.

Democracy claims to benefit all of society, but so does virtually every other mode of governance – what matters is how it is brought to effect.

A system lives for the people – not the other way around. We must refocus on the practical consequences of governance itself.

As Nelson Mandela – at a widely televised New York town hall in 1990 with American news anchor Ted Koppel – said in response to a question about the type of economy he envisioned for South Africa: “We are not concerned with models. We are not concerned with labels. We are practical men and women whose solutions are dictated by the actual conditions existing in our country. It does not matter whether the cat is black or white – so long as it can catch mice.”

Anson Au is a visiting researcher in the Department of Sociology at the Hong Kong Baptist University and a research officer at the LSE Health and Social Care and Department of Social Policy (joint) at the London School of Economics and Political Science.