The Commerce Times

Waking the sleeping dragon

Dr. Cheng Li of the Brookings Institution. Courtesy : Day Walters Photography

January 20, 2010 0 | By Michael Chu

When someone is as knowledgeable of Chinese affairs and international relations as Dr. Cheng Li, it was only a matter of time before President Barack Obama and Secretary of State Hillary Clinton went to him.

Li, a senior fellow at the esteemed Brookings Institute located in Washington DC and director of research at the John L. Thornton China Center, has advised both Obama and Clinton with China-U.S. relations. Because of China’s rise to prominence in the world, Li has been integral in assisting the United States to gain a more thorough comprehension of China.

Can you share with us a little about the Brookings Institute?
The Brookings Institute has a 97-year history and is the largest think tank in the United States. We established the China Center about five years ago. We believe the rise of China is arguably the most important event of the first half of the 21st century. The United States and the Western world are not really prepared for that major geopolitical shift, so we need to do more homework to understand the various aspects of China’s rise so that American policy makers understand the social impact, military security and cultural [impact] with China’s rise. The Brookings institute is bipartisan. We do not belong to any particular party (Democratic or Republican). However, the Brookings Institute was very close to the Obama administration during his campaign. And altogether 40 people joined the administration, including 16 senior colleagues. Some of these people became ambassadors to the United Nations, the Ambassador to Mexico, the Ambassador to NATO and  the second in command at the state department.

“We believe the rise of China is arguably the most important event of the first half of the 21st century”

Why do you feel the emerging middle class is one the most important issues facing China?
Well, it’s not necessarily the most important issue facing China; it’s the issue that will reshape China, reshape the world. Because of the size of the middle class 15 years ago, there was no such thing as a middle class. According to the Mackenzie report, in 2025 there will be altogether 520 million people belonging to the middle class, in the Eastern coast region: Beijing, Shanghai and some inland cities. The global economic landscape will forever change and it has profoundly contributed to the global market. This also has possible negative consequences for China’s environment. This will not only change China’s political landscape, but stimulate China’s domestic demand. So in social, political and economic terms, they are all profoundly important.

Is China’s decision to let their currency appreciate against other currencies a sign of strengthened ties with the United States?
China in the past three or four years has appreciated their currency about 20 per cent. Some countries still push China for appreciation, particularly European countries and China’s neighbouring countries. The United States wants China’s currency to appreciate for its own exports. But China was facing an export problem, and employment pressure in the near future would be really slow. China has already emerged as an economic giant and has a responsibility to take. So eventually I do believe that China will continue to appreciate their currency. China’s premier said that the currency will gradually be flexible and meet market demand.

Because it took Stephen Harper so long to officially visit China, will this hinder Canadian opportunities in China?
Going later is better than not going at all. I think Canadians should change their perspective of China. The United States has already changed its policies and I will mention that Western countries should change accordingly. Previously we always used a logical approach; point our fingers at China and blame China all the time. But you cannot do that. First of all this is wrong. This doesn’t mean we shouldn’t talk about real issues like human rights, Tibet and religious freedom. These are not problems unique to China. We ourselves have terrible problems in treatment of minorities: Native Americans and our history of slavery. But my point is we should not think that we are moral policemen. We need to adjust that. But now with China’s growing economic power, we don’t have that authority. We are only self-defeating by worrying over ideological things. Again, I’m not saying that these issues are not real, China is [also] addressing these issues. The Chinese talk about human rights. I believe there will be a civil  rights movement in China eventually, but through China’s own development.

Where do you see China economically in 10 years?
If the prediction of China’s evergrowing middle class is true, we have only seen the beginning. It’s the tip of the iceberg. China will continue to grow for the next few decades. My sense is that China will surpass the United States not in per capita GDP but overall GDP.