With wounded Russia in retreat, a rising China is riding the waves of globalisation

Jean-Pierre Lehmann finds Kiev a vantage point from which to compare China’s growing international clout, evident in its grand vision of the Belt and Road, with Russia’s declining global fortunes

PUBLISHED : Tuesday, 18 October, 2016, 4:55pm
UPDATED : Monday, 01 May, 2017, 2:00pm

There is only one planet earth, but it looks very different depending on where you are standing. I was in Kiev last week. My last visit was 10 years ago. A lot has happened during that decade, especially recently with the February 2014 revolution and the carnage in Independence Square that ensued. On the main street leading to the square are portraits of those who were killed: all ages, all professions, and both genders. Three I noticed side by side were born in 1970, 1941 and 1993. Shortly after, the Russian invasion and the annexation of Crimea followed. Tens of thousands of Russian troops remain posted in the Donbass region and the wider eastern Ukraine. Ukraine is a country partly under foreign military occupation.

Still, the traumas notwithstanding, Kiev remains the dynamic, beautiful and friendly city I remembered. I was invited to give a series of presentations on the current forces and trends of globalisation, to students, faculty and business leaders. Just a month prior to my trip, I had spent a few days in Xian (西安) to participate in the Silk Road Chamber of International Congress business summit. While there were many delegations from different parts of the Eurasian continent, as well as from the Middle East, Africa and Latin America, I was intrigued by the size and active participation of the Ukrainian delegation.

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I had intended to make the New Silk Road (otherwise known as “One Belt, One Road”) a topic of my presentations and, with the Xian experience and Ukrainian contacts I made, I was all the more resolved to do so. Standing on the Ukrainian part of planet earth, however, it is clear that while the Chinese promise may be rising, the Russians are not just at the doorstep, but defiantly inside the door.

From an observer’s viewpoint, Kiev is a good platform from which to perceive and compare Russia and China. I might add in passing that as I write from my flat in Lausanne, Russian Foreign Minister Sergey Lavrov and US Secretary of State John Kerry are meeting (over Syria) at the Beau Rivage Hotel about a five-minute walk away. The talks did not produce anything substantial – still, as Winston Churchill said, “To jaw-jaw is always better than to war-war”. On the other side of the planet, in Goa, the BRICS summit was taking place, which did not produce anything either, as from its very conception it was vacuous.

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So, there was a good deal of discussion about Russia, not only in the sessions, but also in sundry conversations, including with the highly articulate young driver who took me from the institute where I had spoken to my hotel. I have been to Russia frequently, the first time dating back to 1965, but make no claim to know, let alone understand, it. Rather, I remain inspired by Churchill’s (again!) famous definition of Russia as a “riddle, wrapped in a mystery, inside an enigma”.

Whereas China has ‘embraced’ globalisation, even if increasingly on its own terms, Russia has failed

From the Kiev vantage point, several points can be made. China, after its century-plus of humiliation and ostracism, is indisputably a rising global power, while Russia, after having been the alternate global superpower to the US, is a rapidly declining power. From a geopolitical perspective, declining empires are much more dangerous than rising powers – think of the declining decades of the Ottoman or Austro-Hungarian empires, the violent consequences of which are still with us today and are the subject of the Lavrov-Kerry talks, or indeed of the ravages of the declining decades of the Qing dynasty.

More concretely in the context of globalisation, whereas China, following the reforms undertaken by Deng Xiaoping ( 鄧小平 ), has “embraced” globalisation, even if increasingly on its own terms; Russia has failed. With the exception of its atavistic military role, Russia is conspicuous by its absence on the international scene. Whereas there may be some debate about whether China is a “genuine” market economy, there can be no doubt when looking at Russia that it is emphatically not a market economy. When compared with the China of 40 years ago, it is awesome the degree to which not only the

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Chinese economy but also society have changed. When compared to the years of the rule of Leonid Brezhnev (1964-1982), a time when I was frequently travelling across Russia, it is striking today how present are the many vestiges of the Soviet Union.

Here are two illustrations. On the morning after my evening presentation at the MIM-Kyiv institute, I bumped into a group of Chinese in the lift going down to breakfast. They informed me they were a delegation from a Chinese university and had come to Kiev for discussions on student exchange programmes. The globalisation of Chinese universities and indeed of Chinese university students (second in the number of foreign students, just after the US, at the London School of Economics) is one dynamic of China’s embrace of globalisation. (Though it has to be said that the Chinese government is rather bizarrely seeking to isolate their students from foreign “ideological pollution”; ultimately, it is reasonable to assume the efforts will be in vain.)

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This week in Brussels, I have been invited by the business association ChinaEU for a dinner discussion on “China in the Global E-commerce: Opportunities for Europe”, followed in the morning by a presentation by Duncan Clark on his recent book, Alibaba: The House that Jack Ma Built. The Chinese economy is weighed down by its state-owned enterprises, especially in heavy industry, and its financial sector is ropey, but it also has a highly dynamic and innovative private sector strongly engaged in hi-tech. Though Alibaba is special, it is not unique. My colleague Georges Haour argues in his book, Created in China: How China is Becoming a Global Innovator, that not only is China riding a hi-tech wave, it is also increasingly creating it.

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China is no Utopia. There are significant political, geopolitical, social, environmental and economic challenges. But, looking at the world from Kiev, the contrast between the globalising rising Chinese power and the globally declining Russian power is striking. In fact, “One Belt, One Road” is arguably the most promising initiative on the global agenda currently. It has the potential to redraw global economic geography and provide a big boost to two regions of the world, Central Asia and Eastern Europe, that have been marginalised, stagnant economically and turbulent geopolitically.

Success or failure will very much depend on Russian attitudes and policies. While officially in favour – and there were Russian representatives at the summit in Xian – the Sino-Russian relationship has traditionally been tense and characterised by mutual suspicion. Now the Russians see the Chinese emerging into what they consider their territory – indeed, their backyard.

In the meantime, Ukrainian entrepreneurs, policymakers and thought leaders must persist in seeking to engage Chinese partnerships, especially in relation to the Belt and Road initiative, while trying not to irritate too much the wounded Russian bear. Good luck!

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