Tag Archives: Silk Road

October 18, 2017

Author Gary Moreau, aka Avam Hale in fiction

Wednesday, October 18, 2017, will be an important day for the world. Its ultimate significance is likely to be even greater than the 2016 US presidential election.

On this day, the 19th Communist Party of China National Congress will convene in Beijing to review the Party’s work over the past five years, discuss and set the future direction for the country, and to elect a new central leadership.

During this Congress, it is widely expected that Chairman Xi Jinping will both secure his legacy and tighten his grip on power. It appears an almost foregone conclusion that he will come away from the Congress with a grip on power not seen since the reign of Mao Zedong himself, although no leader will ever quite achieve the historical status that Chairman Mao has.

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Assuming that comes to pass, the world can expect Chairman Xi to double down on the major initiatives of the past five years for the next five, at least. All will be aligned with achieving the Chinese Dream at the heart of Xi’s political, social, and economic agendas. It is a redemptive legacy designed, first and foremost, to assign the Chinese Century of Humiliation (roughly 1850-1950) to the historical dustbin. This task will both influence and define everything else.

That said, here are my predictions for the next five years and beyond.

1. Energy – According to China Daily, more than 2.5 million people currently work in China’s solar power sector. That’s roughly ten times the number employed by the solar industry in the US. And in January of this year China vowed to invest 365 billion USD in renewable power generation by 2020.

Starting in 2019, China’s automotive companies will be required to begin the phase out of cars powered with internal-combustion engines. Some have predicted that by 2030 they will be outlawed completely.

China will continue to take the global lead in renewable energy and climate change. It has to and it wants to. China’s environmental degradation is not sustainable and it believes that the world will ultimately face the same challenges it does as population levels continue to rise. That spells economic opportunity for those companies at the forefront of renewable and alternative energy technology.

2. SOE Reform – Following China’s “opening up”, a process that began in 1989 and ushered in an era of unparalleled economic growth, many state-owned enterprises were privatized. Much of China’s economic growth, and a significant share of its burgeoning personal wealth, flowed from this transformation.

Some of China’s most powerful and influential industries, however, such as banking and financial services, remain under government ownership. By the end of this year, however, the Party has committed to turning all SOE’s into limited liability or joint-stock companies. This may well unleash an even more powerful surge in economic growth at a time when the Western economies continue to struggle for wage and inflation growth. China’s economy, as a result, now the second largest in the world, should equal the US in the next one or two decades.

3. South China Sea – There will be no backing down by China. China will risk World War III to protect its sovereignty. In its mind, it has no option. The West will ultimately be forced to accept this reality, with or without armed conflict.

4. North Korea – In one form or another, the rogue province will ultimately become a sovereign territory of China. China cannot and will not allow South Korea and its American ally to occupy the 880-mile (1,420 km) border it shares with North Korea.

For both environmental and competitive reasons, moreover, China needs to decompress the geographic concentration of its heavy industry (e.g. steel) and find new sources of low cost labor. North Korea will provide a convenient and geographically well-positioned opportunity to address both needs while providing a security buffer to China’s all-important southern region.

5. Regulation – Despite the ownership reforms cited above, government regulation will both federalize and increase in the future. The environment will be regulated with an iron fist. The Chinese Internet will be rigorously defended as both a Chinese asset and a tool for social and economic progress, not a medium for personal political expression. American technology companies will find limited opportunity there.

6. Hong Kong and Taiwan –  Neither will be granted the kind of political independence that Western political activists would like to see. This won’t even be considered. (On the contrary, North Korea will ultimately join them.) And any resulting social unrest, which should be quite limited, will be swiftly quelled.

7. Belt & Road –  Otherwise known as China’s Silk Road Initiative, China will continue to view this as a top foreign policy initiative. China views this as its best chance to economically develop its western provinces and release some of the cultural and political pressure it currently faces there. This will have a significant impact on all of Central and South Asia, including India, Pakistan, and many of the former members of the Soviet axis.

8. Politics –  China will exhibit no desire to export its political model except in matters of national security. Nor, however, will it move to adopt any form of the US political model. To most Chinese, the American model is not an attraction. If they are to borrow any foreign political ideals they will look to the socialism of Scandinavia, with “Chinese characteristics”, of course.

Is this good or bad news for the US and the West? In the end, it doesn’t matter. It will happen. The West, for a myriad of reasons, has lost the ability to shape world events. Phase III of Western imperialism (i.e. I. colonization, II. de-colonization, III. colonial dominance—the global dominance of the former colonies) will inevitably unfold.

As a pragmatist, I accept this reality. It is what it is. And if forced to choose, I believe, on balance, that this can be a period of positive replenishment for the US and its citizens. We will achieve far more by focusing our resources and our energy on renewing the American spirit, revitalizing American infrastructure, and revitalizing opportunity for all American citizens and immigrants, than we will on continuing to pursue inevitably ineffective attempts to reshape the world in our image.

It’s not a digital choice, however. We aren’t limited to putting America or the rest of the world first. Isolation isn’t a realistic option, as China itself has learned. By being a collaborative partner and embracing the diversity of the world, and accepting the inevitable ills of unfettered free markets and their corporate champions (e.g., polarized wealth distribution), we can help to usher in an era of unparalleled global prosperity, peace, and enlightenment.

And it could all start on October 18.

You may contact the author at gary@gmoreau.com
Visit my personal blog at www.gmoreau.com

Here’s what legendary Kirkus Reviews has to say about the author’s new book: “More than a guidebook for managers, this is a manifesto for an intellectually deeper – and happier – world of business.” Kirkus Reviews (starred review)
click here

The latest in the Understanding Series is now available.
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China’s Two Sessions & U.S. Presidential Politics

This past week China wrapped up its annual 10-day plenary sessions of the National People’s Congress (NPC), and the Chinese People’s Political Consultative Conference (CPPCC). Given the complicated acronyms, much less the names, however, most Chinese simply refer to them as the ‘two sessions.’

These two bodies are the country’s top legislative and political advisory forums, respectively, and are attended by more than 5,000 deputies and members from all walks of life, including artists, movie stars, and sports stars. (Yao Ming attended again this year – he’s hard to miss in a crowd.) All 56 ethnic groups are represented as well and many wear the elaborate traditional clothing and headwear of their ethnic group, giving the meetings an air of traditional Chinese formality and visual richness.

Much of the time is devoted to working reports by the government’s various bureaus and department heads. The delegates do, however, have the opportunity to submit their own ideas for consideration and many do.

One of the benefits of the Chinese legislative process is that the president and premier are appointed for one ten-year term and the legislature and government departments work with five-year plans. This year the two sessions focused on the 13th Five-Year Plan, highlighted by seven key issues:

  1. Poverty alleviation
  2. Supply-side reform
  3. One Belt, One Road Initiative
  4. Charity Law
  5. Reform of the judicial system
  6. Green development
  7. Anti-corruption

A couple of notes in passing. There was no mention of the South China Sea. There was no mention of the Diaoyu Islands. And, thank goodness, there was no mention whatsoever of the U.S. presidential elections. In fact, when asked at the closing press conference what impact the U.S. presidential elections might have on China, Premier Li Keqiang effectively said, ‘none.’

And, I believe, that was more of a practical observation than a personal or ideological one. With the advent of the 24/7/365 media cycle, and no corresponding adjustment to the U.S. political calendar, the practical effect is non-stop electioneering. And that, of course, results in a non-stop stalemate. If Americans are frustrated, and Bernie Sanders and Donald Trump are certainly proving that they are, their angst can be summed up in one word – nothing.

It’s not that people don’t like what’s happening. It’s not even that they have a strong preference for doing something else. It’s their frustration with the fact that in the world of politics the new normal is – well, do nothing.

That’s particularly unfortunate because as the activity cycle has shortened, the necessary action cycle has elongated. Nobody expects we are going to fix climate change overnight. Nobody expects we are going to eliminate poverty in one election cycle. No one thinks for a minute that one administration is going to have the kind of impact on the world that might have been the case in the era of Lincoln or Roosevelt.

I personally believe that #3 above, the One Belt, One Road Initiative may be the most brilliant idea yet. If you’re not familiar with it the basic idea is to revive the old Silk Road, bringing economic prosperity to the western provinces of China and the western countries of the old Soviet Union and the eastern countries of Europe.

This bloc could easily, over time, rival NAFTA in terms of economic power and, not coincidentally, is home to a lot of people who don’t particularly like the West. That’s not to suggest, for a minute, that is why China is pursuing this very long-term strategy. It is merely to say that the Chinese are pragmatists. Whatever else you hear on the nightly news, they stand less on ideology than the West does.

For me the most overriding aspect of the Two Sessions this year was the degree to which the agendas were inwardly focused. They talked about China and the Chinese people. There was no grandstanding about this despot and that tyrant and their backroom deal to end life as we Westerners know it. There was only talk about how do we improve people’s lives – economically, environmentally, and in terms of social and judicial justice.

Not bad.

The point really hit home for me the other day when I was Face Timing with my daughter, now 15, and living in the U.S. She has never voted in a presidential election. She has no memory of the Clintons or the Bushs or even the Trumps. But her unsolicited opinion was that America has lost its mind and that the best vote this time around would be the person who will do the least harm to the world.

Me? I don’t do politics. But I do like Bernie. He gets it and he has heart and that still counts for something in my book.

But, in the end, I agree with Premier Li – it really doesn’t matter. We’re arguing over building big walls to keep out the immigrants and China is laying plans for a new Silk Road. We’re wondering what the going rate for a 20-minute speech to Goldman Sachs should be (nothing, in my opinion) for a former government official who was paid by the taxpayers while building her speaking resume, and the Chinese have put poverty alleviation at the top of their latest five-year agenda.

Go figure.


Some early praise for the author’s latest book, “Understanding China – There is reason for the difference”

“An insightful, compelling introduction to the intricacies of Chinese business and life.” – Kirkus Review

To see the full review from this prestigious literary company, please click on this direct link:


“Understanding China is a “must-read” for anyone interested in culture, working with Asian businesses, visiting China or simply if you enjoy a well-written book! I worked in China in the 90’s and while I eventually understood the differences, I never understood “why” until now. Moreau does a great job explaining the “why”. Well done!!”

(Not a relative!)

“Having done business and gone on personal journeys through the Asia Pacific region, I wish I’d read a book like this first. The premise is that being happy and effective in China requires more than just learning how things operate and working within the established system. This will bring frustration and leave you ineffective because you, the Westerner, will still be looking at these cultural differences as irrational. Mr. Moreau contends that only by understanding why things are the way they are in China and in the West can a Westerner actually influence outcome in China.

The author proceeds to explain the differences with very engaging writing that made me say, “Of, of course! It all makes sense now.”

(Also not a relative!)

Copyright © 2016 Gary Moreau

Gary Moreau Beijing, China
Gary Moreau
Beijing, China

Note: The views expressed in this post are strictly those of the writer acting in a personal capacity.

You may contact the author at glassmakerinchina@gmail.com