Civilisational Repositioning: China's Rise and The Future of The Arab People (Written by Samer Khair Ahmad)

Civilisational Repositioning
Chinas Rise and the Future of the
Arab People
Samer Khair Ahmad

Translated by:
Xinlu Liu and Aisling Dunne
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Contents
Introduction The Arab Crisis of Civilisation
Western Obstructions and Eastern Openness
1 The Foundation of the Arab Renaissance
2 The European Colonization and the Reaction of Arab People:

Two Factors which delayed the Arab Renaissance
The Arab Age of Colonisation

Ideological Changes
7
10
3 Western Obstructions and Eastern Openness
15
Part One The Arab and Chinese Non-Conformist Rise
19
1 Non-Conformist The Foundations of Chinas Rise
21
The Beginnings of New Chinas Rise
21
Finding the Right Path Following the Cultural Revolution
24
Towards a Revival
26
One Nation, Two Systems
30
Socialism with Chinese Characteristics
32
Development and Adjustment
35
The Future for the Chinese
38
The Pace of Political Reform
40
Balanced Development of the Military and Economy
42
Chinas Non-Conformist Development
44
vi
Lessons Arab people might learn from Chinas Non-Conformist

Development
49
The Scope of Reference
49
The Arab Worlds Development of Dependence Predicament
52
Chinas Experience
56
Factors Referenced
59
From Non-Conformist Development to a Non-Conformist Rise
63
Part Two Civilisational Repositioning and the Future of the

Arab People
65
1 What does Civilisational Repositioning actually mean?
67
China acting as a possible example for Arab undertaking of

71
The Mao Zedong Era for China and the World
71
Adjustments to Chinas Foreign Policy
73
Pragmatic Diplomatic Policy
75
The Positive Achievements of the Reform and Opening Up Policy
78
Civilisational Repositioning on Chinas Terms
86
Civilisational Repositioning Factors for Arab People to take

into Consideration
89
What does the Arab World have?
89
The Arab World, China and the Future
93
Epilogue
101
Appendix 1: Chinas Reform and Opening Up Policy

A 30 year Chronicle (19782008)
105
Appendix 2: Deng Xiaopings South China Tour
113
Appendix 3: Chinas Road to Peaceful Development White Paper
117
Preface
This book aims to confront the decades-overdue Arab revival through a criticism
of civilisation, which is composed of two parts:
Firstly, researching others and identifying our commonalities is the making of
success. Secondly, so as to prepare for the future decades of global development,
finding a way to overcome our present obstructions will enable a long awaited
revival.
This book was conceived one evening in July 2007, when I and a number of
friends from various Arab states had just returned to Beijing from a trip to southern
China. As we rambled on a street corner, we asked ourselves: Why has China risen
so suddenly, whilst in spite of our potential and resources, we have failed to realise
such a revival? Is it because we lack the ability to formulate plans? Because we cant
put theory onto practice? Or is it because we havent elaborated as to how to realise
such a revival and come up with specific action plan?
In my opinion, researching Chinas rise has become a very urgent and important
issue, especially as we, Arab people, are paying little attention to the East and
conduct research with a mainly Western orientation. The West uses armed force
against us, and then pressures us to follow them. We resemble the words of Ibn
Khaldun: The conquered is a faithful imitation of the conqueror.
In our opinion, there is also an extremely critical question. If balance of power
in the future is moving from west to east, then a certain balance will be formed.
What will our situation be in the world? Will there be a repeat performance of our
history with the US in our cooperation with China? To face China as their position
on the world stage rises, and to face the passion and pride of Chinese people, our
own countries require preparation. Should China serve the function of resolving our
many complex problems, and improve our potential for emergence?
We must mention an incident when a Chinese official presented our Palestinian
friend with a book which discussed the second Palestinian insurgence: China
understands the problems in Palestine, and supports the legitimate rights of
Palestinians. When I heard those words, I became even more determined that this
question was critical.
From these two questions (Chinas success, and Chinas future), this book
proposes that Arab people should pay attention to the following two aspects when
looking at Chinas rise:
viii
Firstly, researching Chinas rise by looking at the philosophical foundations of

their successful processes can provide direction for Arab people planning their
revival. This book believes that the philosophy of China and the Arab states in the
first half of the 19th century both sought out paths to a renaissance, but used
different philosophical approaches to produce equally satisfactory results. Chinas
rise was established on a foundation of development. By virtue of being nonconformist, it has continuously modified and adjusted its path to revival.
Secondly, by establishing a close-knit community of interests with China, its
impact on the world stage in the future enables the country to cast off the outside
world which has obstructed an Arab revival for some time. Chinas help in the
present and future, especially with regards to material construction and modern
technology will enable our personal development.
This book proposes the idea of civilisational repositioning under specific
conditions. If one partys civilisation lags behind another, their support and power
can help the follower go on and advance. This book believes that due to a number
of objective factors, this idea can be realized if the Arab world has a relationship
with China. It stresses that the Arab people at present are falling apart, and are not
prepared for this sort of approach. In truth, China has already accomplished a
sudden rise, but a solid foundation has been established for this type of relationship
in the future. China may be well prepared, but this means that Arab people must
also be ready to proceed.
Finally, the reader may find that China has been embraced with great enthusiasm.
It must be noted however tha this enthusiasm does not stem from any kind of
sentimental contact with China, or disgust with the two world orders. Chinas rise
has provided an example that enables Arab people to resolve their various longterm problems. Fundamentally, this book opposes any material or spiritual
dependency, so there is only one reason why there should be global recognition for
such enthusiasm: China has made it, and their success is worth our admiration and
attention.
Introduction:
The Arab Crisis of Civilisation
1
The Foundation of the Arab
Renaissance
The ideological and technological aspects of Europes revival lead to an unrelenting

expansion of foreign markets and global trade from which they profited. Until the
late 18th century, Arab countries had gradually regressed into markets for selling
manufactured goods and raw materials to Europe. Meanwhile, European countries
were rapidly expanding their military might due to unrelenting conflict, the most
significant being a war between Britain and France from 1792 to 1815. This war
over land and sea fanned the flames in a number of regions across the world.
Napoleon conquered Egypt in 1798, recaptured by Britain three years later.
According to historians, Napoleons conquest can be seen as the point at which
Arab people turned their attention towards the European revival as an example to
follow.
Once France withdrew from Egypt in 1805, a dynasty set up by Muhammad Ali
Pasha al-Masud ibn Agha was devoted to establishing a developed, modern state.
He reformed the military by organising a system more in line with European models
in terms of training, compulsory military service, the promotion of literacy amongst
soldiers, and modernisation of weaponry. By 1839, the Egyptian Army had already
exceeded 150,000 in number. With regards to society, he established a large number
of schools, hospitals, factories, and printers in pursuit of societal and state
administrative institutional reform. He established a land tax for agricultural
workers used to provide religious scholars and elders with a salary, to construct a
highway connecting the Suez Canal with Alexandria, and to establish a shipping
company towards the development of foreign trade.
Muhammad Alis reign lay at the root of reforms in pursuit of European
aspirations. However, the realisation that as part of The Ottoman Empire, Egypt
was seen as being subordinate to Europe created a chasm. From then on,
Muhammad Ali devoted himself to a more individual course.
The great importance Mohammed Ali attached to Europe led him to send large
numbers of students there, and to France in particular, to study medicine, the
military, humanities, art, and foreign languages, with the view that students would
return and participate in the nations development and construction. This measure
speaks volumes as to the extraordinary value he placed on education, even though

he was himself illiterate.
Although every state system and institution underwent some reform, Mohammad
Alis most significant contribution to Egypts revival were security mechanisms.
Without question, Ali is still seen as an ideologist and educator, the originator of an
ideological and theoretical foundation which contributed to Egypts revitalization.
There were certainly other ideologists who contributed, such as Rifaa al-Tahtawi,
recognised as the most important and enlightened thinker of the Arab renaissance.
Tahtawi was one of a number of religious scholars at the Al-Azhar Mosque. In
1826, his teacher Hassan El-Attar recommended that he hold the post of school
chaplain for an international student delegation to France. Tahtawi lived in Paris
from 1926 to 1931, and in that time came to fully understand the rejuvination of a
number of fields such as technology, ideology, and society. He studied the principles,
consistencies and inconsistencies of Islam, and then drew a conclusion: Frances
societal and political mechanisms are a product of their own revolution, and run
counter to the teachings of Islam. Their implementation would completely change
the Muslim form.
Tahtawi greatly appreciated the French philosopher Rousseau, and believed his
ideology could correspond to Islam. For example, Rousseau believed that a healthy
society ought to be just and well-governed. People should serve as members, and
realize their potential within society. Tahtawi took up this point, and added that
people should also participate in national governance, and that the law ought to be
adjusted continuously in accordance with societal change. These viewpoints are all
recorded in his book. When in Paris, Tahtawi also adopted the ideologies of Nation
State and patriotism, believing patriotism to be an excellent foundation for all
government.
When living in Paris, Tahtawi saw for himself what he believed were the positive
influences generated from these specific practices in French Society. He felt that the
French were devoted to work, knowledge, and family whilst attaching great
importance to honour and principle without being confined to minor issues.
Certainly, he could also see their shortcomings; they had no direct connection with
nation building, some people were prone to meanness, and some too lustful.
Tahtawi greatly appreciated the positive factors which brought about the French
Renaissance, and it could be said that his time in Paris was the most important in
his life. All he saw and heard had a massive influence on the formation of his
ideology.
In 1831, Tahtawi returned to Egypt, and carried out translation work at a School
of Language founded by Mohammed Ali. As an ideologist, Tahtawi actively put
forward ideas for the nations revival, and took his findings and recordings from
Paris to write and publish the book A Paris Profile in 1834.
A Paris Profile is said to be the first modern text relating to ideologies for an
Arab renaissance. It stated, It is reasonable to reference French ideology, as a
foundation, and that in truth it deserves to be followed. Hence, it can be said that
The Foundation of the Arab Renaissance
the theoretical foundation for the Arab renaissance were the societal and political
mechanisms Tatami brought back from France, of which there are two parts:
Part 1. Individual Freedom within the social system: Tahtawi firstly referenced
the term individual freedom in Arabic culture and pointed out: Within the legal
system, all French people have a share of individual freedom.
Part 2. Citizenship within the political system. Tahtawi believed that for the
building of a state, a strong collective foundation is required with all citizens
enjoying an equal foundation in terms of rights and duties so as to contribute to the
state.
Tahtawi brought back his experiences from France so as to reform society and
effectively revive the state. It is worth emphasising firstly that Frances Enlightenment
ideology in the initial stages of the Arab renaissance (which Tahtawi represented)
had an enormous influence on Arab people. Secondly, that at the time of the Arab
renaissance, Europe was not seen as a danger to be guarded against, but rather as
an example to be followed.
Certainly, the importance placed on Frances Enlightenment ideology was not
rooted in an obsession with France itself, but in Muslim pursuit of self-interest
towards social progress. Tahtawi took reference from the achievements of French
ideology on the condition that Islamic Law mustnt be violated, especially on a
metaphysical level, as it would present Muslims with the wrong path.
From this originated the beginnings of the Arab renaissance when Tahtawi as
well as other thinkers explored theories of truth wherever they could be found.
They freely appreciated others successes, and made great efforts to assimilate
positive aspects. Meanwhile, Mohammed Ali similarly absorbed the experiences of
those who had studied in Europe, with the intention of realizing a strong and
prosperous state. Throughout this process, Tahtawis writing was highly valued by
Mohammed Ali, leading him to be appointed to numerous important posts in the
fields of education and culture.
Mohammed Ali accepted Tahtawis ideologies, but to some extent gave credit to
Hassan El-Attar. On completion of A Paris Profile, Tahtawi gave the manuscript to
Hassan El-Attar who admired it greatly. He then passed it on to Mohammed Ali
who assigned someone to read it to him. His similar admiration resulted in him
arranging for it to be translated into Osmanli. The two versions in Arabic and
Osmanli were distributed throughout the administration, schools and even the
palaces. The book quickly became famous, and was widely circulated. It is now
considered to be the most influential book in the Arab renaissance.
It is necessary to stress that the foundations of the Arab renaissance were not
built on unrealistic claims, or a bundling together of contradictions. It fully
understood that there is no fundamental conflict between European ideology and
political systems, and the essence of Islamic philosophy in its pursuit of a renaissance.
The Arab renaissance did not deliberately seek out commonalities, but believed that
there was a consistency at root. Although at the time people devoted themselves
tirelessly to realising a renaissance, it was affected by unavoidable limitations and
obstacles such as procrastination and opportunism.
2
The European Colonization and the
Reaction of Arab People: Two Factors
which delayed the Arab Renaissance
The Arab Age of Colonisation

Following the wars amongst European countries, international trade came to life. It
profited from the 1830s rise in the large-scale use of steam ships and railways. Trade
activity also became safer, faster, and cheaper. Flourishing trade brought about a
great deal of wealth for governments and merchants alike. Britain in particular
already had a number of industrial cities in which half the population lived. In
1850, London had more than 2.5 million inhabitants making it the worlds largest
city. Britains total population in 1800 was 16 million rising to 27 million in 1850.
The populations of other European countries also increased.
Europeans knew that they had to develop rapidly, as industry had become so
closely related to their lives and fortunes. For this reason they more than others
needed to urgently seek out suppliers of raw materials for their factories. Ever
increasing populations needed food production, and their products needed to find
export markets. The solution for European states with significant military might
compared to other states, was to control these regions through colonial rule.
So as to develop trade, European countries firstly aimed their colonial attack at
regions of strategic importance, such as The Ottoman Empire which was part of the
Arab Nation. From 1815 to 1850, British exports to the Arab Nation increased by
800%, among which were mostly textiles and metal products. Britain also imported
commodities from the Arab Nation such as olive oil from Tunisia, Lebanese silk,
and Palestinian and Egyptian long stable cotton. Long staple cotton was especially
suitable for industrial cotton spinning, and the amount exported to Britain rose
from nearly zero in 1820 to 1.5 million in 1861.
Although Arab countries had a comparatively large market, there had been long
periods without advancements which made resisting European colonisation
impossible. Rural communities formed mainstream society in Arab countries. Only
a few coastal cities such as Alexandria, a coastal city with the advantage of a port,
experienced any development. In the first half of the 19th century, cholera and
plague epidemics wreaked havoc on the Arab world with the exception of Egypt,
resulting in barely any increase in population.
From the margins of the Ottoman Empire, European countries began to encroach
upon Arab countries until the Arab World became a European colony.
1. In 1830, French troops justified their occupation of Algiers with the fact that
the Masai wanted to take hold of an important trade stronghold on the coast of
Algeria. This generated enormous benefits which tempted the French to continue
into the depths of Algeria to occupy more territory so as to provide even more
security to the strongholds and broaden their markets. By 1847, the French
completed their occupation of Algeria, during which time Abdelkader El Djezairi
was defeated by conflicts in the interior territories. He was finally exiled to
Damascus. Following this, the French began a large land requisition with huge
numbers of French colonizers arriving in Algeria. According to statistics, there
were over 200,000 French in Algeria by 1860 with the native population of
only 2.5 million. The French held large territories of land, and engaged Algerian
agricultural workers to cultivate it. Spanish and Italians also arrived in a continuous
stream, and occupied nearly all flat land for cultivation. Algerian coastal cities were
also inundated with European colonialists who no doubt left their mark. French
colonists gradually increased in these cities, and as their settlements expanded they
became administrators. The colonialists and French political circles maintained
tight relations, and resulted in the colonialists putting pressure on the French to
make Algeria their colony. They even proclaimed, There are no Arabs here. There
are only some speakers of another language.
2. The French and Italians fought intensely to control and rule Tunisia until
finally the French got the upper hand and occupied it. The French took control of
all major programs concerning the national economy and peoples livelihoods in
Tunisia, for example laying railway lines between Tunis and the Algerian border,
and building a harbour. French force successfully overthrew the political reformer
and Prime Minister Hayreddin Pasha in 1877, once and for all killing modern
Tunisias last endeavour to save itself. In 1881, France was induced by the invasion
of the Tunisian Kroumer tribe in Algeria to launch an attack on Tunis. The Tunisian
ruler Muhammed III as-Sadiq was finally compelled to sign the Treaty of Bardo
which recognised French occupation. The French then coerced Muhammed III
as-Sadiq to sign an act announcing that all Tunisian foreign affairs would be
assigned to a French representative. The French dispatched troops to supress
surging opposition across Tunisia, and in 1883, Ali III Bey ibn al-Husayn signed the
Al-Marsa Convention which formalised Tunisia as a French Protectorate, and
ruled in accordance with French governmental requests, administrative proceedings,
and law and fiscal reforms.
3. Britain had coveted Egypt for some time due to its important geographical
location. In 1882, Britain sent troops to Egypt on the pretext of protecting its
expatriates and settling debts which led to the eventual defeat of the leader Ahmed
Urabi. Britain then quickly went on to occupy the whole country. Britain abolished
Egypts constitution, dissolved their parliament, and implemented new economic
The European Colonization and the Reaction of Arab People
policies, reducing it to merely a supplier of raw materials and a market place for
British products. In 1884, after Egyptian troops withdrew from Sudan, Britain
dispatched troops to Sudan claiming to suppress the religious movement led by
Mahdi to establish an Islamic state. After several battles they defeated the Mahdi
army. In 1899 the Anglo-Egyptian administration assumed formal control of Sudan;
in reality just another British administration.
4. In 1878, Britain, France, and Italy attended the Berlin Conference to reach an
agreement as to how regions on the Mediterranean coast should be divided. Cyprus
was assigned to Britain, Tunisia to France, and Libya to Italy. In 1911, safety
concerns were seen as a justification for Italy to dispatch a naval fleet to Libya. It
then quickly occupied Tripoli, Benghazi and Tobruk. In 1912, the Ottoman Empire
and Italy signed the Treaty of Ouchy, and Libya gave up. However, the Libyan
people never ceased to revolt, especially the leader Omar Mukhtar who put up an
extremely hard and bitter fight. During the 14 years following the First World War,
Libya suffered large scale massacres, and Mukhtar was hung. Italy had full control
over Libya until 1932.
5. In 1906, the Moroccan Empires Royal Family and 12 European countries
including France, Britain, Italy, Germany, and Spain attended the Algeciras
Conference convened in Spain with the American President Theodore Roosevelt
taking the role as peace maker. The intention was to coordinate Germany and
Frances interests in Morocco, and resolve problems relating to customs duties,
finances, and policing. In the end, France became the meetings beneficiary. In 1907,
on the pretext of the possibility of local riots influencing financial issues France
dispatched troops to occupy Casablanca followed by the 1911 occupation of Fez and
Meknesm. By 1912, Morocco was declared a French Protectorate. Facing Frances
invasion was a large-scale violent resistance among which the most influential was a
Rif uprising lead by el-Krim. European colonialists spent 20 years quietening down
revolts in Morocco which was completely under French rule until 1926.
6. Efforts to control western regions of Africa resulted in the French colonizing
Mali in 1898. The French then relentlessly invaded Mauritania resulting in it also
becoming a French Protectorate in 1912, and a colony in 1920.
7. European countries, especially Britain, aimed to maintain and expand trade
interests by making all Gulf States either a colony or Protectorate. Britain used
fighting piracy and ending the slave trade as pretests to make Gulf States sign a
number of treaties, becoming British Protectorates. These included Muscat in 1822,
1873, and 1891, Kuwait in 1899, 1820, and 1835, Sharjah in 1853, and Qatar in
1820, 1835, and 1867. Moreover, Britain dispatched troops to occupy Aden in 1839
and Al Mukalla in 1870.
8. In 1916 during the signing of the SykesPicot Agreement, Britain and France
reached an agreement on how Bilad al-Sham and Iraq should be partitioned. This
was later confirmed at the San Remo Convention. In 1922, the League of Nations
council ratified that the regional mandatory administrations for Iraq, Palestine and
East Jordan should be controlled by Britain, and Syria and Lebanon controlled by
France.
10
Ideological Changes
The Arab world once held the view that a European renaissance was something to
work towards, as it was established on a just and equal foundation. However,
striving for hegemony between Britain and France displaced these principles of
fairness, and quickly showed the ideology up for colonial expansionism. Arab
people had just started to follow the examples set by Europe, and were working
towards realising a vision of modernisation and enlightenment, before being forced
to experience its greed. European colonial expansionism was an obstacle for the
Arab World in realising a renaissance; renaissance became less of a priority when
faced with having to resist European invasion and colonial expansion.
It is worth noting that European attempts to colonize the Arab World or rather
their imperialist ambitions did not begin with Napoleons invasion of Egypt.
Napoleon himself has been presented as the saviour of the Egyptian people,
liberating them from the dark reign of the Mameluke Dynasty. Napoleons soldiers
and advisors were not severe or cruel toward the Egyptian people. The historian
Al Jabalah describes life in Cairo at the time: If it were Muslims looking for them,
they wouldnt have forbidden them from entering. If they wished to better
understand them, they would amicably take out pictures, maps, specimens of flora
and fauna as well as the historical materials of distinguished scholars. I visited the
French numerous times, and they showed me all of these things. Perhaps this was
the reason that at the beginning of the Arab renaissance, Arab people has never
before regarded Europeans as enemies, or been daunted by their power. It could be
said, that at this time, the Arab renaissance hadnt experienced negative influences
from outsiders.
However, with European colonialist expansion, the Arab renaissances ideological
foundation was obviously influenced by external negative facts, which were
reflected in two respects.
Firstly, a proportion of Arab people saw Europeans as enemies from the start,
and as Tahtawi said, considered that rebelling against Europe was the road to
modernization. This not only delayed the Arab Worlds modernization, but also
gave those opposing modernisation a reason to criticise and reject it. Those
opposing modernization also revolted against European colonial rule. They instead
chose to find ways to revival by drawing from the legacy left behind by their
Muslim ancestors. To establish the past model of a strong army and state.
Secondly, there was another portion of Arab people who believed the Europe
exploration of the road to renaissance was right, and that Arab people should also
proceed accordingly without any need to radically change or adjust. They also
believed that the Arab World was backward and needed to change, and that Arab
culture was the primary cause for its falling behind.
In the face of European colonial expansion, the Arab peoples thoughts were
either to worship the ancients to serve a revival, or to take the European path to
modernisation and respect their ruling. The reality is that such different attitudes
resulted one always being seen as a burden to the other. In short, although these new
11
propositions claimed they could realise a renaissance, one thing for sure is that Arab
people had abandoned the propositions put forward by Tahtawi. The revival course
was slow, because Arab people were rethinking their ideological guidance. However,
nothing new came to fruition, no goals were accomplished, or any drive in historical
development.
Jamal ad-Din al-Afghani (18391897) was the representative of the Salafi
ideology. Afghanis proposal that progress be made by going back to the ancients
was comparatively traditional, and naturally a type of reform that could not be
compared to the founding principles of the early phase of the Arab renaissance. In
1871, Afghani went to Egypt where he lived for 8 years. During his time teaching
at Al-Azhar University, his ideas had a profound effect on his students. He then
became acquainted with Muhammad Ali Pasha in Istanbul, and together they
discussed their understandings of what they considered to be real Islam, and the
necessity to utilize it to unite, and deal with the risk of European colonization. In
1879, under the pressure of the British consular-general stationed in Egypt, Afghani
was deported by the Khedive Isml and then headed for India. In 1884, Afghani
landed in Paris, where together with his former student Abduh set up the periodical
The Indissoluble Link. It was used to give full expression and discussion to the
Salafi ideology, the manner of colonialism, and its wild ambitions. It discussed
colonisations effect on the Islamic world, as well as the weakness of Muslims.
Although this periodical only published 18 issues and was banned by the Egyptian
government, it still spread across the Arab Nations and had an enormous influence
on intellectuals.
Nothing in the The Indissoluble Link could better embody the Salafi ideology
better than the article People of the past, and how to overcome chronic disease. It
criticised the discourse surrounding the necessity to follow Europe in order to
realise a revival:
Anyone would say that imitating or worshiping other countries will only open
the door to attack by enemies.
The essay proposed that:
In response to the valid risks on people and an essentially Islamic way of life, a
recovery of Islam and its classic guidance should be the beginnings of a new system
and a mass purification and morality. Igniting change will honour the dedication of
our country, and its destiny.
On account of this, Salafi ideology can be reduced to two points; refusing a
European road to modernisation and proposing to bring back the systems and
ideologies of their ancestors. This ideological trend, known as the Islamic
Renaissance Movement, still exists in Arabic contemporary culture, but became the
fundamental ideology of Islamic political movements which rose to prominence in
the 1920s. The Islamic political movement continued to develop following the
withdrawal of the European colonialists, as the troops were evacuated, but the
ideology of imperialist logic was left behind. In short, the principles of the early
stages of the Arab renaissance were not noticed by people advocating Salafi
ideology.
12
The proposition of following the European path was not established, or formed
by one person. Therefore it had no unified content, form or specific procedures. In
reality, it stemmed from those who advocated secularism, nationalism, and
socialism, but not all secularists, nationalists, or socialists had the same notion.
Those who supported the European path were in strong agreement as to its
various findings, inventions and theories. Shibley Shamil, who is recognised as the
pioneer of scientific ideology in the Arab world believes in Darwinism, and even
alleges that the religion of science has already declared war on pas religion.
Salafi thinkers believed that such people were merely beating the drum for
Western Superiority. Shibley Shamil responded to the notion of a dependence on
science for an Arab renaissance by saying Along with the propagation of science,
will come the doom of an authoritarian tyrant.
Arab nationalism and secularism seems to be rooted in Europe. At the start of
the 19th century, nationalism was born in Europe, and Lebanese intellectuals were
influenced by European culture and colonialism. In the mid-19th century, the first
nationalist ideas were introduced so as to provide a basis for Arab people to gain
freedom from the Ottoman Empire.
Arab communists were also influenced by Europe, especially following the
successful Bolshevik revolution in Russia and the establishment of the Soviet
regime. They were unwilling to let go of communist ideas, as it was an example of
something within sight. Also, it is worth mentioning that the Soviet Union clearly
opposed European imperialism and colonialism. For example, two months after the
Soviet Union was established, its government declared that Tsarist Russia and
European countries had signed the SykesPicot Agreement. The Soviet Union was
considered a supporter of Arab liberation, and Arab communists adopted
Communism as being the correct path for an Arab revival. Certainly, the emergence
of the Arab communist movement wasnt due entirely to the establishment of the
Soviet Union, or their opposition to European colonialism. It was the intrinsic
application of Marxism within the communist movement that enabled regional
independence that was appealing, and considered to be an appropriate path for the
Arab Nations path to revival. As the Syrian ideologist Bu Ali Yasin stated:
Scientific socialism is an appropriate path for guiding the revolutionary Arab
populace, as by becoming the ideology of Arabian working-class people, it doesnt
have to answer to Europe or imitate the practices of Europe, Russia or China.
In short, from the start of the European colonial invasions and occupations of
Arab states, the historical development of the Arab renaissance was altered.
Original manuscripts described the current state of Arab people and their culture,
and were the starting off point for establishing an Arab renaissance which had lost
its footing. In response to colonial expansion, those with deep ideological ideas
sprung up in print, and expressed standpoints which tended towards either an
ancient, or an alien culture. Arab ideology is rooted in two very different
perspectives, and these deep changes are reflected in the modern developmental
processes of Arab states. The two different ideological angles in practice are
13
interdependent; the minority depend on the ideologies of the past, and the majority
depend on western countries.
What must point out and explain that from 1920 to the mid 1920s, Arab states
gained independence in quick succession. Ideological trends were organised into
their own political parties and movements. Real action was hoped for, but with
adjustments which could have exceeded the results of their ideologies. This effort
was unsupported which rendered hoped for benefits unrealised. For example, Salafi
ideology always attempted to bind together the traditional and modern; enjoying
the fruits of human civilisation, and abiding by what they believed to be the
principles of Islam. This approach to establishing a new society within an old
ideological system couldnt possibly have worked; a new system built on a
foundation of individual liberty, and an old ideological system which advocated a
collective spirit, and opposed individuality. This attempted hypothesis was not the
early principle proposed by Tahtawi. However, many cultural problems in the Arab
World were attributed to it. Tahtawis proposals werent loaded with contradictions
bound together. Instead, common factors were identified within different issues
which rendered them fundamentally consistent. It must be said that the purpose of
all the various social trends of thought were consistent so as to realise revival.
Rather than a foundation of common factors, they all saw coordination as a
starting point.
3
Western Obstructions and Eastern
Openness
Western countries not only obstructed the Arab Worlds course to modernization
and renaissance throughout the colonial period, even after the troops were
withdrawn, they spared no effort in continuing to cause problems which resulted in
these countries falling even further behind. They either made direct use of stateowned machinery, or worked from the inside by stealthily supporting backwards
forces. For example, when the Arab states were in the process of diverging, intense
bias towards Israel in particular had a serious negative impact on the Arab
renaissance. Western countries have always exploited the third world; especially
Arab states in which they have attempted to foster a dependence these countries had
no choice but to pursue.
These practices came extremely naturally to Western countries, since the Arab
states possessed abundant oil as well as a strategic geographical position. Thus
western countries maintained a remarkable interest in the Arab world. Certainly, it
cannot be said that the Arab civilisational crisis is due completely to external
factors. As with every nation that falls behind, there must be a degree to which
interior reasons are to blame. For instance, cultural factors have played a significant
role in the Arab crisis. Even so, it must still be stressed that various external factors,
and particularly colonialism, have had a disastrous impact upon Arab people.
Just as the residual effects of colonialism continue to remain, so do the two paths
which define the Arab Worlds ideological response: either regress to the past, or
follow their example. This is the most significant reason why an Arab revival is
stunted.
Following the cold war, the Western development model was deemed to be the
the termination of human societal advancement and the final form of government.
The US was seen as the only superpower in the world that controlled international
politics as well as wielding a deep influence worldwide on all fields of development
such as culture, science and technology. The US hoped that globalisation (or
capitalist globalisation) would promote Western liberal economic and societal
development models, and way of life. In the face of these trends, Arab people have
responded with two main approaches:
16
The first is to restore ancient ways. Supporting this ideology were those deeply
immersed in history, and devoted to the notion that repeating Arab approaches to
development through history was the remedy for reforming the Arab World. This
ideology was generated during the early stages of colonization, and was an
extremely emotional response to the intensifying colonialism. Those holding these
ideas believed restoring ancient ways to be more consistent with history. They not
only duplicated a departed social, political, and ideological system, but also took
into account the behaviour, lifestyle and even language custom of the ancients.
The second direction was following the US example. After the US won the Cold
War, liberalism was advocated as a beneficial and realizable path to modernization
owing to its emphasis on liberalization of individuals, politics, and the economy. It
promised to overcome all manner of difficulties, and enable states to reach a level
of Western development by following an efficient method. It should be said that this
following of the US was a worldwide phenomenon, and not unique to the Arab
region. US involvement in international politics, especially in Palestine, severely
harmed the interests of Arab people, but yet solutions were still sought. The US
model is closely related to its political, economic and social systems, and should
therefore not be involved in international politics. More than just merely referring
to US models, these thinkers proposed that they should serve as guidance for
modern Arab ideology, that Arab ideology be in compliance with such models.
Following the examples set out by the US and by colonialism requires wholesale
westernisation, and a relationship with the Arab World that resembles master and
servant. It completely neglects the differences between Arab and US culture.
Mainstream Arab culture is rooted in collectivity and traditional tribal sects, which
are not compatible with liberalism. In addition, the US is unbalanced. Its diplomatic
policies harm the interests of Arab people, especially in 2003 when troops were
dispatched to occupy Iraq, causing the Arab World to reject liberalism. However,
what needs to be explained is that those who oppose liberalism are not in reality
rejecting notions of modernisation and democracy. What they truly reject is US
imperialism, of which liberalism is a representation.
It must be stressed that the above mentioned ideologies are not the only ones.
They just happen to be the most influential. With such obvious divides, the critical
question is: What ideology should we adopt? Restore ancient ways, or follow the
US? In truth, these two ideologies bear no resemblance to the Arab renaissance of
the first half of the 19th century, which was rather to pursue a revival stemming
from Arab countries own conditions.
If Western countries colonization of the Arab and the Arabians ideological
response were two import obstructions to the Arab renaissance, from the current
situation, the Arab Worlds opportunity to realise a revival is remote. Imperialist
countries still have enormous interests which they will not give up, at least for the
first half of the 21st century.
Although Western civilisation has achieved a great deal and deserves to be
studied, the West will not help Arab people, nor create an environment in which
they can realize a revival. This is because, once the Arab world accomplishes
17
independence and revival, it will be impossible for the West to continue to exploit
its natural resources.
An Arab revival which follows the path of the West is already loaded with
obstacles. The West is continuously followed as an example, and the fountain from
which Arab ideologists seek out ideas on reform and modernisation. However,
history has proved that following the West is in no way beneficial to Arab people.
Although Western states have realised enormous advances, the force of colonialism
had brought about a deep crisis in the Arab World. It is a vicious circle.
The Western path is blocked, but the East, mainly consisting of developing
countries, and East Asian states in particular, should be an example from which an
Arab revival might learn. Prior to the mid-20th century, East Asian and Arab states
suffered equally from the effects of colonization and exploitation at the hands of
Western countries, and hence have similarities in terms of development conditions.
Therefore, paying close attention to their experience of development is extremely
beneficial. It can help us understand how East Asian countries have shaken off the
situation of backwardness.
Certainly, we must note that there are differences between East Asian countries
and the Arab World, especially in terms of the impact Western countries have had
on their development. It must also be stressed that the ArabIsraeli conflict in
particular has had an extremely negative impact on Arab liberation and development.
However, we dont want to magnify, and attribute this as the sole reason for a
stunted revival. As mentioned previously, the main reasons lie within.
This books major research presents New Chinas rise, and stresses how it
transformed grand ambitions into detailed and specific action plans which were
successfully implemented. There are two major reasons for researching China. One
is that China is a developing country which shares many developmental
commonalities with Arab countries, and more importantly an early history which
sought out the same paths to a renaissance. Chinese people have always had firm
objectives combined with a flexible ideology, striving to avoid hesitation,
contradiction and opportunism. This results orientated approach is the most
important lesson we can learn from Chinas successes.
Part One
The Arab and Chinese Non-Conformist
Rise
1
Non-Conformist The Foundations of
Chinas Rise
The Beginnings of New Chinas Rise

On 1st October 1949, the Chinese Communist Party (CCP) declared to the world
at the Chinese Peoples Political Consultative Conference that The Peoples Republic
of China had been established. According to the states founder, Mao Zedong, this
was a transitional period in which a new democracy was to be steered towards
socialism.
In 1954, New China formally issued the first part of its constitution. It stipulated
that the state institution would include the Peoples National Peoples Congress, The
State Council of the Peoples Republic of China, the Supreme Peoples Court and
Supreme Peoples Procuratorate, the Local Peoples Assembly of Representatives,
the Local Peoples Congresses at Various Levels and their Standing Committees, and
The Organs of Self-Government of National Autonomous Areas. The Chinese
Communist Party and the military under its leader played a leading role in state
politics.
The Chinese Communist Party was first established in 1921, and adopted a
nationalist rather than internationalist standing which differentiated it from most
other communist states. Agricultural workers were the revolutionary strength
behind the Chinese Communist Party. Sino-Soviet divergences illustrates this issue
well.
Mao Zedong was New Chinas leader from its initial establishment until his
death in 1976, but continues to symbolize its fairy tale even after his death. After
his death, many policies were modified, but this had no impact on their position.
China was once poor and weak, and had suffered a great deal of intimidation.
China has now come to occupy an important global position as a great power.
Mao Zedongs ideology had a large degree of flexibility, which allowed for
adjustments in response to different situations at any given time. For example,
before the founding of New China, Mao Zedong distributed land among agricultural
workers, reduced rent and lowered interest rates. This won him the support of a
vast number of agricultural workers for the revolution. However after its founding,
22
Mao Zedong sanctioned state control of land and all agricultural products so as to
expand the scale of production, and the countrys 740,000 agricultural workers
were organised into 26,425 peoples communes.
Following the eight years of the Second Chinese-Japanese War as well as four years
of civil war between the Kuomintang and the Communist Party, Mao Zedong faced
a disastrous economic situation. As China had always been an agrarian country, Mao
Zedong established a centralised planned economy, similar to that of the Soviet Union.
Firstly, agricultural land and then other fields of industry were taken into an expanding
realm of public ownership. Major reforms abolished private ownership. This measure
was part of Chinas first five year plan which led to large improvement. The gross
domestic product (GPD) rose from 6.7 billion RMB in 1952 to 10.68 billion in 1957
which included large increases in agricultural product from various production
departments. The state successfully controlled inflation, reorganised taxation, invested
in development, and increased employment opportunities and wages.
Large-scale natural disasters brought about a great deal of agricultural instability
in the late 1950s until the early 1960s. The lives of agricultural workers were
heavily impacted, but the Chinese economy nevertheless redeveloped at a reasonable
pace. All agricultural products were under state administration, and had to be
rationed during this period of hardship, in order to meet lifes basic requirement for
sustenance. This hardship and rationing transformed the peoples communes, and
resulted in a slowdown in productivity, inaccurate grain output figures, and theft.
It could be said that these rural reforms brought little to Chinas agricultural
workers, and had a negative effect on its economic development.
The value of Chinas industrial output trebled between 1949 and 1966. The
country prioritized developing aircraft and automotive manufacturing, heavy
machinery, metallurgy, coal, electricity generation, and the precise instruments
required for heavy industry. A host of industrial and mining enterprises were built
across the country, including in remote areas.
Ancient Chinas glorious civilisation and unique inventions are world famous.
After the establishment of New China, the Communists attached a great deal of
importance to the development and advancement of science and technology. They
enthusiastically encouraged overseas Chinese scientists to return home. This created
excellent conditions in which to study, and resulted in the establishment of scientific
research institutions across the country. In 1949, when the communist party came
into power, there were only 30 scientific research institutions, and no more than 500
full time staff. By the mid-1950s, the number of scientific research institutions had
reached 840 with 400,000 full time employees. Along with the field of science,
China made other great advancements. In October 1964 and May 1965, two
atomic bombs were detonated, making China a nuclear power.
Chinas made great military, agricultural, space, and manufacturing advances,
benefiting Chinas investment in education. Following the establishment of New China,
the school enrolment rate continuously increased. In 1949, only 20% of children
across the country received an education. By 1985, this had increased to 96%.
Non-Conformist The Foundations of Chinas Rise
23
Medical treatment and public health also saw clear improvements, with marked
increases in average life expectancy. Mao Zedong did not, however, advocate a
family planning policy, which resulted in China experiencing unprecedented
population increases. New China had a population of around 541 million people
when it was established in 1949. By 1976, the population had reached 933
million.
New China issued a series of laws to protect the rights of women as well as men
in the workplace, and provided equal opportunity for them to participate in
education, and social activities. Therefore, the scale of womens contribution to the
workforce and their productivity were subject to dramatic increase. It is worth
noting that although society made great advances in many ways during this period,
improvements to the standard of living were slow. For example, Chinas GDP in
1952 of 67.9 billion RMB increased to 300 billion by 1975. However, increases to
peoples incomes in the corresponding period were relatively limited.
The Chinese Communist Party was devoted to strengthening leadership within
Chinese society, and opposed any attempt to destroy and divide the state. However,
this did not hamper the cultural heritage of minority groups, many of which were
entrusted with a great deal of autonomous power. Since the death of Mao Zedong,
this policy has continued to be implemented and developed.
Chinas development has no doubt been impacted by international conditions
and by conflicting ideological camps during the Cold War. Though Chinas conflict
with Japan ended after Japan was defeated during the Second World War, they have
remained, ever since, rivals.
In 1950, the Korean War broke out and the Chinese Peoples Volunteers
supported North Korea so as to protect their national security. On the North
Korean battlefields, China achieved a series of significant victories, and American
troops, seemingly so invincible during the Second World War, came under enormous
pressure. President Eisenhower even threatened to use nuclear weapons. In 1953,
the signing of the Korean Armistice Agreement brought an end to the Korean War,
but China paid an enormous price, and sensed the USs imperialist ambitions for the
first time. Following the war, the US lent support to countries surrounding China,
especially her old enemy Japan. Supporting them was an attempt to contain and
threaten New China. This behaviour, with its intention towards China, resulted in
the Vietnam War. China supported revolutionary activities which resisted US
occupation, so it can be said that China-US relations during the 1950s and 1960s
were essentially hostile.
Ideological divergences with the Soviet Union had a negative impact on
production. For instance, China was no longer able to learn from the Soviet Union
in research areas such as nuclear weaponry in which they had a leading edge. Such
technology would have helped a great deal with Chinas development. A more acute
consequence of deteriorating China-Soviet relations came in the form of armed
conflicts in the border regions in 1969. Around this time, the US approached China,
hoping to improve relations and suppress the Soviet Union.
24
In short, Mao Zedong led China along the correct road to revival and
advancement, and significantly improved the countrys position in regional and
international affairs. As a result, in 1971 it recovered its role as a permanent
member of the United Nations Security Council. Of course, this does not mean that
everything Mao Zedong did was somehow great. Certain measures had a deleterious
impact on the nations development, the most significant of which was the Cultural
Revolution.
Finding the Right Path Following the Cultural Revolution

Soon after Mao Zedongs death, Chinese Communist Party leaders began to requestion the policies adopted since, strove to learn from its experiences, and move
on from the Cultural Revolution. Efforts were made to clear up residual issues such
as exonerating Liu Shaoqi, various other party leaders and the millions of people
who had been rehabilitated.
In the months that followed, the Hua Guofeng continued to use Mao Zedongs
slogans. In February 1977 the Two Alls were introduced, stating that, All of
Chairman Maos decisions must be upheld; all of his instructions will always be
abided by. The Two Alls triggered people to question the capabilities of Hua
Guofeng while Deng Xiaopings were regarded with certainty. He cited Mao
Zedongs two famous slogans used before the establishment of New China; Be
Practical and Realistic and Practice is the sole criterion for testing truth in
opposition to Hua Guofengs Two Alls. Deng Xiaoping believed that in order for
China to be successful, it would need to overcome dogmatic constraints.
In December 1978, the Third Plenary Session of the 11th Central Committee of
the Chinese Communist Party convened in Beijing. After the meeting, Deng
Xiaoping and his colleagues at the Political Bureau held nearly all leadership
positions, and Deng Xiaoping became Chinas leader.
Deng Xiaoping and this new leadership had much education and past experience
at their disposal. They applied themselves to conceiving a plan which would
encompass every field, especially new policies in the field of economics. In December
1978, the Third Plenary Session of the 11th Central Committee of the CPC was
convened. It was stated that imprisoned ideologies needed to be liberated, and that
the party and nations central functions had moved on from class struggle to
economic construction.
Although the new leadership had done away with Maos class struggle, and
endeavoured to resolve the negative residual effects left behind by the Cultural
Revolution, the policies they decided upon would not impact the role of Marxism,
as it was still deemed to be the foundation for Chinas victory and advancement.
Neither did the new leadership undermine Mao Zedongs historical contribution to
the construction and liberation of New China. All responsibility for the period of
chaos during the Cultural Revolution was placed on The Gang of Four. On 30th
March 1979, the CPC Central Committee convened the first Theoretical Work
25
Retreat, and Deng Xiaoping proposed that China reform and modernise with the
Four Cardinal Principles. It stated that the socialist path and proletarian
dictatorship should be followed by a Communist Party leadership, and an adherence
to Marxist-Leninist and Maoist ideology. The principles of these reforms may seem
inconsistent at first glance, but should be interpreted objectively as intended to
create the favourable conditions in which Deng Xiaoping hoped Chinas reforms for
modernisation and construction might be achieved. According to Deng Xiaoping,
political stability was crucial as only a stable state could have the energy and focus
for reform, rather than for non-political or ideological conflict.
Deng Xiaoping emphasised developing production, and the notion of improving
productivity became more predominant. In 1984, Deng Xiaoping proposed in his
essay Building Socialism with Chinese Characteristics:
Marxism paid great attention to developing productivity. We speak of
communism, but what does it actually mean? That one should work according
to their ability, and distribution should be as required. This requires that
societies have a high level of productivity in order to develop, and enjoy the
utmost material wealth. Therefore, the phase most fundamental to socialism is
developing productivity. What makes socialism superior is that it embodies
higher and faster productivity than capitalist development. If you say our
national construction has its shortcomings, then this must be due to neglected
aspects related to productivity. Socialism wants to wipe out poverty. Poverty is
not socialist, and it certainly is not communist.
On the basis of Deng Xiaopings socialism with Chinese characteristics, China
applied market economic mechanisms for managing its economy. Perhaps some
people would become prosperous first, but this would attract overseas Chinese to
return home and invest. In turn, this would reduce the states need to subsidise
various products and services. During this time, China began opening up to the
outside world. It is worth emphasising that during this process, China always
stressed its need to maintain sovereignty and independence. In 1984, Deng Xiaoping
always pointed out to his foreign guests that China needed investment and
technology from foreign countries, but that the foundation of its reform and
opening-up policy was independence.
Chinas leadership formulated what has become known as the Three Step
development strategy. The first step was to double the 1980 GDP by the end of the
decade which would resolve food and clothing shortages. The second step was to
double GDP again by the end of the 20th century so as to enable quality of life to
reach a comfortable level. The third step was to raise GDP per capita to the level of
a moderately developed country by the mid-21st century in which people are
comparatively affluent. The foundations to making this possible were modernising
agriculture, industry, science and technology, and national defence.
Reforms specific to the First Step were composed of two parts starting with
agricultural reforms in 1978 and urban reforms 1985.
26
Towards a Revival
Deng Xiaoping always pursued the advancement of reform step by step. Reforms
within the First Step were usually tested in select regions, and then expanded when
successful.
1. Industry and Technology

In 1980, four special economic zones were established, and became the windows
that opened up China. Shenzhen neighbouring Hong Kong, Zhuhai next to Macao,
and facing Taiwan separated only by sea is Shantou and Xiamen. Shenzhen, Zhuhai
and Shantou are all located in Guangdong province and Xiamen in Fujian province.
These special economic zones implemented comparatively low tariffs and taxation,
allowing private enterprise to establish, and build a securities market. These special
zones were successful in attracting foreigners, especially capital and technology
from Hong Kong driving rapid industrial development.
These special economic zones brought favourable benefits. In 1984, the Chinese
government decided to expand this experiment to 14 other coastal cities, such as
Dalian, Shanghai, and Tianjin. In 1992, 52 National Economic and Technical
Development Zones were promoted across China, and foreign research and
developmental institutions and new high-technology enterprises were given
preferential policies, and mitigated tariffs and taxes. The role of these policies was
to speed up the development of new high-technology industries, which gave rise to
a large number of major industries such as aircraft manufacturing, aerospace
technology, computer equipment, and electronics. The success of these economic
and technical development zones in addition to the further promotion of Advanced
Technology Parks in various regions propelled Chinas industrial and technological
advance.
So as to provide a favourable climate for industry, China produced a series of
laws and regulations aimed at protecting industrial development. For example, the
Trademark Law was issued in 1982, the Patent Law in 1984, and the Copyright
Law in 1990, thus powerfully safeguarding the interests of enterprise, and
promoting optimal market development. China also underwent a number of
measures and devised laws so as to develop and safeguard state-owned industries,
for example the Enterprise Bankruptcy Law and Industrial Enterprises Owned by
the Whole People were introduced successively in 1987 and 1988. These two laws
stipulated that:
State-owned enterprises must acquire a person of judicial qualification, in
accordance with the law, who autonomously operates, assumes sole responsibility
for profit and losses, and keeps independent business accounts of the socialist
commodities produced by operated units.
27
The enterprise has the right to possess, use and dispose of the assets in
accordance with the law, which are authorised by the state to be under operation
and management of the enterprise.
Enterprises creating serious losses due to poor management, or who are unable
to repay debts will be declared bankrupt in accordance with the law.
With the states encouragement and support, some state-owned enterprises have
been successful and industry leaders, whereas others have failed in the face of
competition and become bankrupt. China has also adapted its centrally planned
economy to focus on expanding the proportion of tax revenue shared with local
government so as to boost their enthusiasm. Party members and cadres at various
levels as well as entrepreneurs were required to operate within an administrative
region, and particular individuals with outstanding performance were rewarded
with promotion.
From 1984, China officially allowed the establishment of private enterprise,
which impacted every industrial, commercial, and service industry. Their numbers
multiplied year on year, and made a correspondingly significant contribution to the
Chinese economy. However, it is worth noting that the main reason for the rapid
development of private enterprise in the 1980s was due to the increased global
demand for consumer goods and services. The balance of market supply and
demand was adequate until the 1990s when commodities started being produced in
excess. This compelled small enterprises to merge and reorganise so as to improve
competitiveness, and also strive towards improving the quality and technological
features of products.
The global high technology boom created an increasingly challenging international
marketplace. China implemented the 863 Plan in 1986 to promote the research
and development of high technology. According to the program, 15 major projects
were established covering seven fields of great importance to Chinas future
economic and social development- such as biology, space science and information
technology- in order to pursue advanced global standards. Twenty years of
development following the 863 plan resulted in more than 8000 patents in China,
and the formulation of more than 1800 national and industrial standards. The 863
Program continued to support independent innovation, the achievements of which
came close to an advanced international standard. High performance computers,
third generation mobile communications, high speed information networks, deep
sea androids and industrial robots, space and marine observation systems and
exploration, new generation nuclear reactors, super-hybrid rice, insect resistant
cotton, and genetic engineering are the various fields which have already won a
place on the world stage. Bioengineered pharmaceuticals, communication equipment,
high performance computers, Chinese language information processing, intraocular
lenses and optoelectronic materials and devices have all been extremely competitive
in their respective emerging fields, and have successfully developed products with
proprietary intellectual property rights thus creating growth areas for Chinas high
technology industries.
28
2. Agriculture
Following the Third Plenary Session of the 11th Central Committee of the Chinese
Communist Party, China enacted the Household Contract Responsibility System
which linked remuneration to output. This enabled rural workers without land to
contract it, and enjoy the wealth generated from the sale of its produce. From 1979,
the produce from summer crops appeared on the market. The state purchase price of
grain increased by 20%, and the price for above-quota purchase increased by 50%.
At the same time, chemical fertiliser, pesticides, and agricultural implements reduced
massively in cost and motivated agricultural workers to join the system in droves thus
immensely improving productivity. According to statistics, in 1979 only 1% of Chinas
arable land had implemented the Household Contract Responsibility System, but this
had reached 20% by 1980, 45% by 1982, 80% by 1983, and 99% by 1984. In 1983,
China officially abolished 25 years of the Peoples Commune System. In 1984, it was
decided that household contracts could be extended from 15 to 30 years.
In addition to establishing this system, the Chinese government placed a high
premium on elevating the technological standard of agricultural production. In the
early 1980s, China created 500 Agricultural Technology Model Villages across the
country to test advanced technology and their effect on productivity. This was
essential for 80% of the countrys population who worked in agriculture, and the
advanced experience derived from these agricultural models were disseminated
throughout the country. In addition, the government attached importance to
agriculture utilizing foreign capital and technology, and through reduced tax
revenues were successful in attracting foreign agricultural enterprises to invest.
The aforementioned reforms proved beneficial as the total value of Chinas
agricultural output increased annually by an average of 2.5% through the 1970s,
and up to 9.3% in the 1980s. The average incomes for agricultural workers also
enjoyed a 17% annual increase. Following these large increases in productivity,
workers sold off surplus agricultural products in cities which brought about the
birth of middlemen, who were more familiar urban shopping habits. Meanwhile,
farmers markets opened around the outskirts of cities, and their reasonable prices
led urban residents to shop there rather than in state-run shops.
Along with the development of rural productivity, township enterprises sprung
up producing food and drink products, clothes and shoes, ceramics and kitchen
ware, and agricultural machinery. Products from township enterprises increased in
share not only in the domestic market, but also started being exported abroad. In
1990, 24% of Chinas total export market was produced by township enterprises,
and they crucially contributed to resolving unemployment problems. In 1979,
township enterprises absorbed a labour force of 29 million people accounting for
amounted to 9.93% of the total rural workforce in that year. In 1990, the township
enterprises labour force amounted to 92.62 million, accounting for 22.05%. In
2001, the township enterprises absorbed a labour force of 127.3 million people
accounting for 25.94% of the total rural workforce in that year. Of course, the
distribution of Chinas labour force was uneven and mainly concentrated in the
coastal regions of Shandong, Guangdong, Jiangsu, Hebei, and Fujian provinces.
29
3. International Trade
Following the reform and opening-up policy, China established 5 special economic
zones, opened up 14 coastal port cities, developed the Pudong New District of
Shanghai, and established 15 free trade zones, 32 economic and technological
development zones, 52 high-tech development zones, and 38 export processing
zones. In succession, provincial capitals were opened up; 13 along the coast, 6 along
the Yangtze River, and 18 inland. They were all given specific economic policies,
thus giving substantial support to Chinas economic development, especially foreign
trade. In 1978, Chinas foreign trade amounted to $20.6 billion, and broken
through to $115.5 billion with a surplus of $8.7 billion by 1990.
4. Education
After 1978, New Chinas leadership started to make adjustments to reforming their
education plan. In the new leaderships view, education and Chinas various fields
of development, in particular economics and technology, went hand in hand. All
levels of schools were required to serve the modernization and construction of the
state. In response to increasing international competition, talents were needed to
satisfy requirements for future development. Promoting students moral, intellectual
and physical education, improvements to state student services, and a sense of
responsibility to society enabled people to courageously explore innovation, and
develop practical problem solving skills.
In reality, New China attached great importance to education from its very
inception. In 1978, the number of school aged children in China had massively
increased, and from then on great steps were taken to improve school enrolment
rates in various regions. A major development in educational reforms included the
addition of English in primary school syllabuses. Competent educational authorities
created specific regulations with regards to teaching methods. For instance, that
primary should be a happy and joyous period in a childs life. School work should
be relaxing and enjoyable, with a reasonable amount of homework. First-grade
students were forbidden from receiving homework, second and third-grade
homework could not exceed 30 minutes, fourth-grade could not exceed 45 minutes,
and fifth and sixth no more than 1 hour. Primary school students required no less
than 10 hours sleep. Teaching was considered an opportunity to freely express ideas
to students, and any physical punishment was forbidden.
By 1985, the rate of school-aged children enrolment had reached 95.9% and
100% in one-third of provinces across the country. In 1986, the Peoples Republic
of China Compulsory Education Law was issued with the following stipulations:
State implementation of 9 year compulsory education requires that provinces,
autonomous regions, and can determine their own steps for carrying out the 9-year
compulsory education according to their own cultural and economic development
conditions.
30
According to the law, state, society, schools, and families must ensure that
children of school age, from the age of 6 years and regardless of gender, nationality,
or race must enter into a school and receive the stipulated compulsory education. It
is forbidden for any organisation or individual to employ children of school age.
Implementing compulsory education requires operational expenses and investment
in capital construction, so the State Council and Local Peoples Congresses at
Various Levels and their Standing Committees are responsible for raising funds, and
guaranteeing all implementation. What is worth mentioning is that the government
not only highly valued students education and their scientific knowledge, but also
placed emphasis on improving their practical skills. For example in the 1980s,
middle and primary schools in cities would often build small factories where they
could work during their extracurricular time. The produce was sold in markets, and
the earnings used to supplement the schools development. Students from rural
primary and middle schools were organised to work for an allocated one month a
year during the busy seasons. The practice of student work enhanced students
production skills as well as their emotional connections with other workers.
The Chinese government also paid close attention to developing the quality as
well as quantity of higher education. In 1978 following Chinas implementation of
the reform and opening-up policy Policy, development was prioritized in the Four
Modernizations. In the governments view, Chinas future relied on advanced
science and technological labour, rather than labour intensive industries. Across the
country hundreds universities and colleges were established, and private capital was
encouraged to participate in and develop higher education. With this as a backdrop,
Chinese university enrolment rates increased year on year. Students enrolled by
colleges and universities reached 2.6 million in 2001, which was a 44% increase on
2000. According to the Chinese governments published development goals, by
2015 the gross enrolment rate for Chinese universities will be 40%, and more than
20% of the entire work force will have received a higher education. So as to
improve the quality of the labour force and develop the economy, China is putting
effort into developing economics, law, business administration, information
technology, foreign languages, and applied sciences.
In conclusion, Deng Xiaopings reform initiatives have propelled Chinas
enormous development, and an average growth rate per annum of 10%. Chinese
people lived in poverty for a long time, and now enjoy remarkable improvements
to their quality of life.
One Nation, Two Systems

The most significant issue facing Chinas rise that must be addressed is its unity as
a single state. The leadership was always committed to recovering Hong Kong and
Macau which were formerly occupied colonies (Hong Kong by Britain, and Macau
by Portugal) as well as Taiwan which was occupied by the Kuomintang in 1949,
and are issues being addressed with a great deal of pragmatism.
31
The societal and market economic systems of Hong Kong, Macau, and Taiwan
are quite different to that of the Mainland, so if the PRC were to recover these
regions, the formation of their societies and economic structures would probably
change.
To ameliorate the panic and doubt felt by compatriots in Hong Kong, Macau
and Taiwan in the face of a return to China, Deng Xiaoping proposed that one
nation is the common aspiration of all Chinese people, but this does not mean that
the Mainland requires that its ideology be exported. When Deng Xiaoping met with
the British Prime Minister Margaret Thatcher in 1982, the concept One Nation,
Two Systems was proposed, in which Hong Kong, Macau and Taiwan would still
retain their current systems upon being returned to the motherland, but would
operate within the premise of One China.
The One Nation, Two Systems concept proposed that citizens of Hong Kong,
Macau and Taiwan had different lifestyles and economic conditions superior to
those in Mainland China. They needed to believe in the great benefits that would
come from being returned, and that they would have the right to manage their own
affairs. In addition, this concept also aimed at freeing Western countries from worry
about their economic interests in these areas. In actuality, retaining the economic
structures in place in Hong Kong and Macau are to Chinas benefit. These three
areas possess booming economies and can bring the capital and technology required
for Mainland Chinas economic development. It will also inspire confidence in
foreign investors, and entice them to invest in the Mainland also.
In July 1987, the Secretary of State for Foreign Affairs, Geoffrey Howe met again
with Deng Xiaoping to go over Hong Kongs One Nation, Two Systems concept.
The Chinese government wishes to resolve any issues over Hong Kong, and that
its position, principles, and policies should remain unaltered. It has been discussed
repeatedly that after our government regains sovereignty in 1997, Hong Kongs
society, economic structure, and way of life will remain unchanged and its legal
system will be fundamentally unchanged. Its status as a free port for international
trade and as a financial centre will also remain unchanged. Hong Kong will continue
to maintain and develop their economic relations with other countries and regions.
We have discussed many times that aside from troops being dispatched from Beijing,
no government cadres will be sent to Hong Kongs Special Administrative Zone.
This also will not change. Maintaining state security is the reason we dispatch
troops, not to interfere with Hong Kong domestic affairs. Government policies
regarding Hong Kong haven not changed in fifty years which must be counted.
This was conceived as a foundation, and in December 1984 China and the UK
officially signed the Joint Declaration of the Government of the United Kingdom of
Great Britain and Northern Ireland and the Government of the Peoples Republic of
China on the Question of Hong Kong. In accordance with this declaration, the UK
returned Hong Kong on 1st July 1997 to the Chinese government after 156 years
of British occupation. Prince Charles, the British Prime Minister Tony Blair, and the
Chinese President Jiang Zemin and Prime Minister Li Peng were all in attendance
for the official handover ceremony.
32
As with Hong Kong, Macau was handed back to China on 20th December 1999.
If you say that Hong Kong is an important global investment and trade centre,
Macaus gambling industry is just as famous. Even still, China still follows Deng
Xiaopings principle to give consideration to history and reality. Macaus social
and economic system, as well as its way of life has not been changed.
Taiwan is no different to that of Hong Kong and Macau. The issue doesnt stem
from its western colonial occupation, but from history left unresolved from the civil
war between the Kuomintang and Communist Party. In the early 1970s, New China
recovered its position as a permanent member of the United Nations. Even though
the US initiated improvements to relations with China, so as to confront the Soviet
Union, broke off relations with Taiwan, and recognised the PRC government as the
sole legitimate government, the US government still continued to support Taiwan
on the political stage and sold them weapons. Taiwan is used as a political issue to
pressure Mainland China in international politics.
Due to US intervention, the problem with Taiwan is much more complicated
than that of Hong Kong and Macau. Even so, One Nation, Two Systems has
always been seen as the basic principle for resolving the Taiwan problem. On the
international stage, China opposes any country interacting with Taiwan, its
recognition as a sovereign state, and admittance to join international organisations.
Meanwhile the Mainland attaches importance to strengthening trade relations with
Taiwan, and encouraging Taiwanese enterprises to invest in the Mainland. The
Mainland hope that both sides will develop relations in terms of trade between its
people, and clear up any misunderstandings, reduce hostility, and enhance consensus
before finally realizing a unified state. The Taiwan problem has created enormous
problems for China, and requires long-term engagement. As Deng Xiaoping once
said, Reunification of the motherland is the aspiration of the whole nation. If it
cannot be accomplished in 100 years, it will be in a 1,000.
Socialism with Chinese Characteristics

Between January and February 1992, Deng Xiaoping took a train for the south of
China and conducted an inspection of Wuchang, Shenzhen, Zhuhai, and Shanghai
out of a desire to boost the drive and pace of Chinas reforms. During this South
China Tour, Deng Xiaoping affirmed that cities such as Shenzhen had achieved
tremendous economic construction. He proposed that development economics was
Chinas new primary task working firmly in accordance with the Communist Partys
basic line and persisting with the path of socialism with Chinese characteristics.
In October of the same year, the Chinese Communist Partys 14th National
Congress convened in Beijing. The meeting established a socialist market economic
system with the aim of setting up reforms. Deng Xiaopings construction of
socialism with Chinese characteristics became the theoretical guide for the Chinese
Communist Party. The meeting proposed:
33
The socialist market economic system we want to construct would be a macrocontrolled market within a socialist state. The allocation of resources is fundamentally
impacted, as economic activity must follow the requirements of the law of value,
and adapt to the changes of supply and demand. Through the use of price leverages
and competitive mechanisms, the allocation of resources can go to and benefit the
right segments, and both pressurise and motivate enterprise to be more competitive.
Using the market to create various economic signals will provoke sensitive
responses, and accelerate the timely coordination of production and demand.
Meanwhile, we should also take note of the advantages and disadvantages of the
market, and continue to strengthen and perfect the states macro-control of the
economy.
Transforming state-owned enterprises, especially the operational mechanisms of
large and medium-sized, and pushing them to join the market will strengthen and
improved their quality. The key link to constructing a socialist market economic
system is consolidating its mechanisms and playing to the superiority of socialism.
Straightening out property relations, separating government and enterprise and
creating workable and autonomous rights for enterprise enabled them to
independently run their own operations and assume sole responsibility for profits
and losses as well as development. It is constrained only by legal entities and market
competition, but assumes responsibility for increasing the value of state-owned
property. A shareholding system helps facilitate the separation of government and
enterprise, and transforms its managerial mechanisms and accumulation of social
funds. It was initially tested, and the results were used to quickly formulate workable
laws and regulations which contributed to ordered and sound development.
Following the 14th National Congress, China unveiled a series of laws and
regulations aimed at constructing a socialist market economy. In 1993, the newly
unveiled Corporation Law stipulated that a Public Liability Company, in which all
capital is comprised of equal shares cannot be owned by shareholders in excess of
what the company is responsible for. The company must undertake full responsibility
for debt, and total assets. Corporate shareholders act as investors, and inject capital
into the company so as to enjoy the benefits reaped from the total assets as well as
the right to make important decisions and select management. Companies under
state macro control must produce and operate autonomously in accordance with
market requirements so as to improve economic benefits, productivity of labour and
maintain and increase the value of assets. Similarly, the 1993 Law against Unfair
Competition was unveiled stipulating that:
Proprietors making market transactions must abide, at ones own accord, to the
principle of equality, fairness, honesty and credibility, and comply with recognised
business ethics. They must not make illegitimate use of their enterprise or registered
trademarks to engage in market transactions which would damage competition.
Proprietors must not use property or other methods to bribe, market, or purchase
products. They must not use advertising or other means to mislead people with false
claims with regards to the products quality, production composition, properties,
application, producer, expiry date, or place of production.
34
The same year, the Law on Protection of the Rights and Interests of Consumers
stipulates that:
Proprietors are responsible for the quality of their products, and if the product
quality and outer packaging do not comply with the indicated standards, the
proprietor must repair or replace them. If the consumer makes a loss, the proprietor
must compensate them.
In 1994, China issued the Advertising Law stated that:
The advertiser, and the advertisement proprietor and publisher must not create
unfair competition during the advertising campaign Advertising must not include
misleading content, deceive or mislead consumers Advertising proprietors and
publishers must in accordance with the law, administrative processes and regulations
refer to related documentary evidence, and verify the advertisements contents.
Advertisements with false content or incomplete credentials are not allowed. Advertising
proprietors must not provide design, production, agency service, or publish.
In 1994, China issued the Foreign Trade Law which stipulated that:
State implementation of a unified foreign trade system should work in
accordance with the law of maintaining equality in uncontrolled foreign trade. In
order to promote foreign trade, the state should in line with the requirements of
foreign trade development establish and perfect financial institutions that will
support foreign trade, a foreign trade development fund, and venture capital
funds.
It is also required that Foreign traders must run according to law and compete
fairly during all trading activities. Another important part of the law underwent
thirteen years of preparation and extensive discussion. In 2007, the Property Law
was issued which established the principle of equality with regards to the rights of
state, collective and individual property, providing equal legal protection for all of
the main market players. It also stipulated that should individual rights be
compromised, the rights holder can resolve them through reconciliation, mediation,
arbitration, and litigation.
Along with the aforementioned succession of laws which were established with
the aim of promoting the socialist market economic system, China proposed that
the corresponding legal system should be relatively complete by 2020. It is worth
noting that these laws successfully combined principles of a free economy with
socialist principles, thus maintaining Chinas fundamental socialist systems.
During the process of establishing a market economy, the Chinese Communist
Party and Chinese government applied themselves to bringing about national
economic stability and balanced development. It was unavoidable however that
China would encounter some societal problems, the most prominent of which being
the disparity between rich and poor. As this gap emerged and widened, it was
obvious that China had failed to abide by its socialist ideals.
In addition to this disparity, unemployment also started to become an issue. In
cities, the closures of failing enterprises caused large numbers of workers to lose
their jobs, and the state could not undertake social functions, so as to take care of
everything, as it had in the past under a planned economy. In rural areas, the
35
development of agricultural technology resulted in a reduction of labour required,

and so tens of millions of agricultural workers had no choice but to move to the
cities in search of work.
Uneven regional development has also emerged as a problem. East and south
China have experienced much faster economic development than that in the north
and west. Prosperous regions had incomplete policies in practice. Therefore, Deng
Xiaopings proposition that a section of society will become prosperous first did
not turn out as it was expected, as the disparity between regions, living standards
and income continues to widen.
The environment has become the victim of Chinas economic development.
Medium and large urban industries generated various kinds of pollution, and have
severely contaminated the air and water. The excessive use of oil and coal, for
instance, has begun to create a depletion of resources, and contaminated arable
land, water resources, and forests.
Population problems have also emerged in Chinas society. Mao Zedongs era
adopted policies which encouraged procreation, and even deemed it a task for the
revolution. Chinas population increased massively in the short period between
1964 and 1969 with a population growth up to 100 million, and by 1980 the total
population had hit 1 billion. An enormous population placed a great strain on
Chinas economic formation, resulting in a vigorous enforcement of family planning
policy. It was implemented through heavy penalties for couples who violated the
policy. An employee from an institution, societal organisation, or enterprise who
went against family planning regulations was not only subject to paying a fine, but
would also result in their entire work unit being subject to administrative penalties
or disciplinary punishment. Using the One Child per Household Policy, population
growth was significantly decreased. However, this policy also brought about a
number of negative consequences. For example, the proportion of the elderly
population increased. In 2005, people over 70 occupied 10% of the population.
Owing to the large number of households inclined to favour male children, the male
and female population ratio is seriously imbalanced. Although only children tend to
have improved opportunities, they are excessively mollycoddled and lack a collective
perspective which is important for the formation of a rounded personality. The
Chinese government is already aware of these problems, and has already started to
allow two children under certain conditions.
Development and Adjustment

On 19th February 1997, Deng Xiaoping passed away at the age of 93. He
established the national administrative system which ensured a smooth handover of
power. Jiang Zemin became the core of the new leadership group. Naturally,
following Deng Xiaopings era, Chinese politics underwent changes. The national
administrations reliance on the outstanding leadership of a single person was
36
modified into a collective leadership which is now the Political Bureau of the
Central Committee with the General Secretary at the core.
The new collective leadership continued along Deng Xiaopings path of reforms,
and strove to maintain Chinas high rate of economic growth. Motorola and Boeing
and large multinational businesses rushed to China. Chinese commodities went on
sale in world markets, including the US market. Meanwhile, Jiang Zemin strove to
resolve the negative issues which had emerged through the process of development,
especially with regards to corruption.
For this reason, Jiang Zemin rethought the use of socialist ethics within a
developing economy. In June 2001, the important Three Represents were put
forward. The intention behind them is as follows:
The party must always represent the development of its advanced productive
forces in various fields of employment, in terms of its theory, guiding principles, and
policies. It must strive to conform to the corresponding laws and continue to
promote freedom and development in society, thus improving the quality of peoples
lives. The party should always move in a direction that advances culture. The
aforementioned theory, guiding principles, and policies for various kinds of
work must look towards modernisation, international exposure, and a vision for
the future. A socialist culture requires that the masses are engaged in science, and
the promotion of ideological and ethical standards across the population.
The continuous improvement of scientific and cultural quality will provide an
empowering spirit and intellectual support. The Party will always work to expand
the fundamental interests of the people whilst giving full play to the initiative and
creativity of the masses. This will provide a foundation for continual development
in which the masses can obtain economic, political and cultural benefits.
There is no doubt that the Three Represents have a positive and strengthening
impact on socialist ethics. From the late 1990s until the early 21st century,
fast-paced economic development also brought about a consumer culture in which
money was the important indicator of a persons societal position. It was during this
period that a number of serious cases of corruption emerged.
In 1998, Zhu Rongji appointed an investigative team whom discovered that
between 1992 and 1997, 40% of the national grain purchase loans, totalling
200 billion RMB had been embezzled and diverted.
From 1997 to the first half of 1999, central and regional governments injected
48.8 billion RMB into a poverty alleviation fund. An auditing commission identified
that 4.3 billion RMB had been misappropriated and emptied into illicit accounts,
which accounted for 20.43% of the total fund.
In 2000, some officials, Fujian Province were found to have been participating in
a smuggling network for the previous 5 years, and had smuggled goods worth
53 billion RMB, evaded 30 billion RMB of taxes, and created state losses totalling
83 billion RMB.
According to statistics, Chinas loss of state assets between the start of reform
and opening up, and 1997, exceed 600 billion RMB, which is equivalent to 19.5%
of the states general financial revenue. The buying and selling of official positions
started to increase, with bribery by officials seeking promotion.
37
Construction and engineering projects faced huge problems due to corruption.

Many companies made huge profits and forfeited construction standards by using
poor raw materials, and bribed those responsible in government departments to
circumvent inspections. This has eventually led to numerous serious accidents such
as buildings collapsing, creating both financial loss, and loss of life.
In addition to the ethical fight against corruption, China has adopted more
rigorous punitive measures compared to that in Deng Xiaopings era. In July 2000,
the National Peoples Congress (NPC) Vice Chairman Cheng Kejie was executed for
accepted bribes amounting to 41 million RMB, the highest level government official
to receive the death penalty since the establishment of New China.
In 1998, Jiang Zemin decided to forbid the army from conducting business
dealings so as to fight corruption, forcing them to pull out of commercial fields.
Since then, involvement with trade, automotive production, pharmaceuticals,
hotels, and various other industries and enterprises have been handed over to the
government.
During Jiang Zemins era, China adjusted the balance of central and regional
governments, and took back part of the authority given to regions during the reform
and opening-up policy. Finance and taxation in particular were reverted back to the
central government. Meanwhile, guidelines for the lending behaviour of banks were
enforced, and the State Councils Prime Minister, Zhu Rongji, assigned an
investigative team to inspect regional credit and loans. These measures guaranteed
that central governmental orders went unimpeded, and increased its fiscal income.
Restricting the authority of regional governments also prevented or contained the
emergence of regional corruption among government officials. With the strengthening
of central power, central fiscal income increased massively. In 2000, central fiscal
income had reached nearly 1.4 trillion RMB, a drastic increase on the mere 865
billion figure from 1997 when systemic financial and taxation reforms were
implemented.
With regards to the economy, Chinas reformed state-owned enterprises with the
principle, invigorate large enterprises while relaxing control over small ones,
single out the best for support, and survival of the fittest. The state focused its
energy mainly on finance, electricity, rail-roads, aviation, communication and
various other industries related to the national interest and peoples livelihood.
Through merger and acquisition, over 100 large-scale state-owned enterprises
evolved into industry bellwethers with special support of the state. These companies
were able to compete with their rivals in more developed countries in the US,
Europe, and elsewhere. The function of this policy was to cultivate a number of
large enterprise groups, such as the famous Changhong who produce televisions,
Haier Group who produce air-conditioners and refrigerators, and the industry
leaders Baosteel Group who produce steel, Jiangnan Shipyard for shipbuilding, and
the Founder Group for computer software technology. As small and medium-sized
state-owned enterprises transitioned, their numbers dropped enormously.
In 1997, the Southeast Asian financial crisis erupted, and China responded by
actively promoting exports and reducing interest rates so as to stimulate domestic
38
demand and the economy. By 1999, China successfully freed itself from the negative
impacts of the financial crisis, and domestic economic construction steadily
increased. This was actually beneficial overall to helping the Southeast Asian
economy recover from an extremely tense situation. It must be mentioned that in
stimulating domestic demand, China started encouraging individual home ownership.
By the year 2000, house sales had reached 284 billion RMB, and the rate of home
ownership exceeded 60%.
Along with separating government and enterprise, and other reform measures
aimed at regulating government-market relations, restructuring of government
administration became imperative. From 1998, China started to streamline
government institutions at all levels, and by 2000 the workforce had been reduced
by 50%.
The Future for the Chinese

In 2002, Hu Jintao became Chinas new leader. He continued to intensify reform
and opening up, and apply himself to resolving the negative impacts on Chinese
society that had been brought about by economic development.
Hu Jintao paid close attention to the disparities in Chinese society, that between
rich and poor, between regions, and urban and rural. In 2005, the disparity of
household income per capita between richest 10% of Chinese urban residents, and
the poorest 10% was remarkable. The disparity between the level of development
in the north, south, east and west of China was also increasing day by day. The
disparity between rural and urban residents in terms of income, educational
opportunities, and future development were also evident.
In September 2004, Hu Jintao convened the 4th plenary session of the 16th
Central Committee of the CPC, and proposed the concept of a Socialist Harmonious
Society, and shortly after in 2005 declared that it would serve as their main
strategic mission in office. In October 2006, the 6th plenary session was convened;
an explanatory speech was delivered regarding the document, Decision of the CPC
Central Committee on Certain Major Issues in the Building of a Harmonious
Socialist Society.
According to this CPC Central Committees explanation of this official document,
a harmonious society should be one with democracy and order, equality and
justice, credit and friendliness, vitality and stability in which humans and nature
have a harmonious relationship. Whether resolving the disparities between rich and
poor, regions, or urban and rural societal problems, building a harmonious society
was always the most important end.
The guidelines for building a harmonious society involved strengthening its rule
of law and socialist democracy. During economic decision making, it was required
that adequate consideration be given to the rights and interests of the masses.
Increasing employment opportunities, establishing and perfecting a social security
39
and public service system, and measures to improve peoples incomes would all be
vital to improving peoples lives.
Of Chinas 1.3 billion people, more than 900 million are rural, and so resolving
poverty among rural inhabitants was a priority for building a harmonious society.
From 2006, the Chinese government ended its 2000 year old agricultural tax, thus
increasing the income of agricultural public service workers. Large-scale schools,
hospitals, and agricultural extension service centre were also created.
By 2007, Chinas Three Rural Issues- the village, farming, and agricultural
workers- had received 400 billion RMB in cash injections. In 2006 rural areas in
western regions were exempt from fees for compulsory education, a policy expanded
to central and eastern regions in 2007. China, in addition to building a medical
centre in every village administration, decided that rural residents should all benefit
from a system of medical insurance, the majority of which would be financed by
government. This greatly reduced medical expenses for rural workers.
In addition to the aforementioned preferential policies, the Chinese government
also encouraged large state-owned enterprise and overseas investment into rural
areas, and organised the more affluent eastern regions to assist the poor western
provinces. More rapid construction of transportation infrastructure, connecting
rural areas and cities, led to increased levels of employment, and improved income
and living standards for rural people.
What is worth noting is that poverty was not the sole issue impacting Chinas
construction of a harmonious society, as corruption increased day by day. Hu Jintao
believed that resolving and preventing corruption was of vital importance to the
public perception of the Communist Party, so party members and leading cadres
suspected of corruption regardless of their rank were subject to severe punishments.
In 2006, the original CPC in Shanghais Municipal Party Secretary Chen Liangyu
was suspected of corruption and expelled from the party. Following his dismissal
from office, he was sentenced to 18 years in prison. Beijings former deputy mayor,
Liu Zhihua who was responsible for the Beijing Olympics infrastructure, abused his
power to profit from others, and received bribes amounting to 7 million RMB. In
2008 he was sentenced to death; a sentence carried out two years later.
Hu Jintao attached great importance to improving the quality of higher education
as part of a strategy to strengthen the nation through talent and develop human
resources. In recent years, the Chinese government has increased its support of
education, and rapidly developed all levels from vocational to higher. The Chinese
government in 2005 released the White Paper, Chinas Road to Peaceful
Development which proposed that:
From 2006 to 2010, secondary school education had produced 25 million
graduates, and 11 million from higher education institutions. By 2020, the gross
enrolment rate into Chinese higher education will reach around 40%. Meanwhile,
China will actively introduce various overseas talents, high level personnel in
particular, to develop a powerful workforce of talented people, and provide
favourable mechanisms and a social atmosphere that will give full scope to their
talents. The guarantee of intellectual support of powerful talent will provide for the
construction of a modernized country.
40
The Pace of Political Reform

From 1978 onwards, China launched a number of economic and political reforms.
Political reforms tended to err on the safe side. Voting mechanisms for instance were
tested in a certain region before being proliferated nationally. It is worth noting that
Chinas ongoing reforms, regardless of whether they were political or economic
were all adjustments and optimisations of an existing system, rather than a radical
overhaul. Political reforms were derived from what was required to revive the
nation, rather than from an ideology. China hoped that the masses would come
together in moving forward with these reforms, and trusted that they would bring
about positive changes in their lives.
From the outset of reform and opening up, Deng Xiaoping abandoned Mao
Zedongs class struggle as the central task and armed struggle in favour of opening
its doors to the outside world so as to improve and strengthen cooperation with
countries, including the West. China also started to reform their internal political
mechanisms. For example, a highly centralised economic planning system was
delegated to individual provinces, giving them power to make own decisions. In rural
areas, the majority of the population had started to construct local-level democracies,
and from 1987 the Organic Law of the Villagers Committees was trialled. Previously,
leaders of these village committees were appointed by the government. The new
stipulation meant that the chairman, deputy chairman, and committee members of
village committees were all directly elected by villagers. This grassroots rural
democracy was tested over a long period before being proliferated. The Organic Law
of the Villagers Committees was only officially issued in 1998 after ten years worth
of trials. After being revised, the law stipulated that the village committees must
implement competitive elections with more candidates than those elected, secret
ballots, and publicly counted votes, the results of which are immediately announced.
In addition to state administrative reforms, the Chinese Communist Party
reordered their internal machine. As Chinas ruling party, the CCP had only 57
members when it was initially established in 1921, rising to more than 85 million
in 2012. In 1949 following the establishment of New China, the CCP managed state
affairs and enjoyed enormous achievement, demonstrating how responding to
requirements for development can bring forth new and innovative capabilities.
Inevitably, there were nevertheless problems, leading to rapid adjustment in
response. Meanwhile, there was a consistent emphasis on enhancing the capabilities
of the cadres, who were regarded as the main players, carrying out established
reform and development programmes.
Following reform and opening up, one key point for political restructuring was
to separate the functions of party and those of the government. The government
was responsible for the specific management of various undertakings such as the
economy, society, and culture. The Party was in charge of political matters, such as
political direction of domestic affairs, foreign affairs, the economy, defence, and any
other major decisions implemented by the leader. The Party also made
recommendations to government for the selection of important government cadres.
41
The CCP carried out the following internal reforms. Since it was set up as a
principle that the Central Political Bureau should be supervised by the Central
Committee, their authority was limited in the formulation of the regulatory
framework: Regulations for the Selection and Appointment of the Party and
Government Leaders, Chinese Communist Party Supervision Regulations, and
Chinese Communist Party Regulations on Organising Local Elections, served to
promote compliance within the party. It is worth emphasising that the Chinese
Communist Party actively promoted democracy at all levels within the Party from
the Central Committee to regional party organisations by implementing open and
transparent competitive elections with anonymous voting.
Strengthening and improving multi-party cooperation was an important part of
its political reform. In 1978 following the implementation of reform and opening
up, and a period of great suffering during the Cultural Revolution, China again
reconsolidated to produce the System of multi-party cooperation and political
consultation under the leadership of the Chinese Communist Party. The cardinal
principle of this system was that the CCP served as the ruling party, but cooperated
with various other democratic parties so as to develop a relationship of established
long-term coexistence, mutual supervision, sincere treatment of each other, and
sharing joys and misfortunes.
According to Chinas constitution, the CCP is Chinas ruling party and there is
no opposition. Various democratic parties participle however, and enjoy political
liberty, independence, and the same legal status as the Chinese Communist Party in
terms of rights and obligations. Up to now, China has eight democratic parties
which are as follows. The Revolutionary Committee of the Chinese Kuomintang
(established in 1948 were originally the Kuomintang and other patriotic democratic
personages), the Chinese Democratic League (established in 1941 who principally
work on high level work involved with cultural education and science and
technology, and an intermediate intellectual organization), China Democratic
National Construction Association (established in 1945, mainly personages in
economic circles), Chinese Association for Promoting Democracy (established in
1945, consisting of high and mid-level intellectuals that work in education, culture,
and publishing), and the Chinese Peasants and Workers Democratic Party
(established in 1930, mainly comprised of high and mid-level intellectuals in areas
of pharmaceuticals and health), China Party for Public Interest (established in 1925,
mainly consisting in middle and upper-level returned overseas Chinese and their
relatives), Jiu San Society (established in 1945, mainly consisting in high and midlevel intellectuals in science and technology), Taiwan Democratic Self-Government
League (established in 1947, consisting mainly in prominent people from Taiwan or
of Taiwanese heritage, now residing on the Mainland). Looking at the history of
these democratic parties, we can see that during the War of Resistance against
Japan, as well as the KMT-CPC civil war of liberation, there was a gradual
formation, development, and long-term cooperation with the CCP. Following
reform and opening up each democratic party was actively involved in various
political activities with many becoming NPC or CPPCC members, as well as
holding leading positions within all levels of government.
42
In addition to the active participation of these democratic parties in the

administration and discussion of state affairs, public members without party
affiliation were also allowed to participate in political activities. Many joined the
Chinese Peoples Political Consultative Conference (CPPCC) and the NPC, and held
important posts in government. In 2005, the Chinese Communist Party issued the
CPC Central Committee views on the further strengthening of multi-party
cooperation and political consultation under the leadership of the Communist Party
of Chinas Construction, and explicitly stipulated that democratic parties and
unaffiliated members across different levels amounted to no less than 60%, and
65% in the CPPCC. In 2007, unaffiliated member Chen Zhu became the first noncommunist party member to become a government minister.
Balanced Development of the Military and Economy

Developing national defence was one of the important targets among Chinas
reform and development processes since the 1970s. Applying reforms has lifted
their international position, and served state interests as demanded by the people.
The concept of development was on a full-scale with national defence among its
core elements. National defence not only safeguards a nations economic security,
but can also effectively prevent foreign intervention, and attacks from separatist
forces.
Since the PRC was initially established, the army has always played an important
role in the states development process. In the 1950s, the Chinese Peoples Liberation
Army with the support of the Soviet Union evolved to become regulated,
professional, and equipped with excellent arms. In the 1950s and 1960s, they
participated in a number of large scale wars such as the Korean War between 1950
and 1953, and the China-India border conflict in 1962. In 1954, New China
completely revised its blueprint with the Four Modernizations in which the
military was a part.
In 1979, following the final month of the Sino-Vietnamese border-conflicts, Deng
Xiaoping set about reforming the army. His principle was quality not quantity.
With this guiding principle, China began grading and reducing the numbers of
military personnel.
Great importance was attached to providing military training so as to cultivate
modern well-rounded and talented military personnel, with a scientific and artistic
appreciation, with rich knowledge of politics and the military. Strong technological
expertise and public administration skills were also important so as to shoulder the
weight of any number of leadership positions.
In addition, China applied itself to independent development and modernising its
weaponry focusing on, naval vessels, intercontinental nuclear missiles, satellite
weapons, electronic warfare, and new types of warplanes.
43
In terms of organisation, the Chinese Peoples Liberation Army consisted in a

ground force, the navy and air force as well as the strategic nuclear force, the
Second Artillery Corps. China joined the atomic club early on, and in 1964
proceeded with its first round of nuclear testing. The highest military organ leading
Chinas armed forces was the Chinese Communist Party Central Military
Commission and the Peoples Republic of China Central Military Commission, not
the State Council.
During Chinas process of opening up, the Chinese Peoples Liberation Army
actively participated and launched comprehensive and multi-layered military
diplomacy. As of 2012, it had already established militarily relations with more
than 100 countries. High level reciprocal visits are held at regular intervals for
personnel training. From 1990 to 2012, the Chinese army dispatched thousands of
peacekeeping soldiers to participate in 22 United Nations peacekeeping
operations.
In addition to annual joint military exercises with Russia which were launched
in 2005 code-named Peace Mission, China has a number of other joint military
exercises with countries sharing regional security issues, such as with Tajikistan
which was launched in 2006 and code named Coordination 2006, and an antiterrorist military exercise with Pakistan code-named Friendship 2006.
China and the member states of the Shanghai Cooperation Organization (SCO)
have tight military relations. The SCOs predecessor, the Shanghai Five was
comprised of China, Russia, Kazakhstan, Kyrgyzstan, and Tajikistan. In 2001, this
mechanism became the SCO, and Uzbekistan was included. Its purpose and task
was to strengthen border regions and mutual military trust which was extended
politically and economically. Each country also hoped that strengthening cooperation
was the answer to the war in Afghanistan following the USs continued military
presence in Central Asia.
From the late 1990s, China required that the army suspend its involvement in
numerous commercial fields which included foreign trade, real estate, and hotels.
This was put into effect with the intention of promoting military professionalism
and expertise. Also, due business enterprise being subordinate to the army, generals
and senior officers had become immersed in hotbeds of corruption. National
army and senior government leaders were resolute in wanting to resolve this
problem once and for all. In 2008, the Central Military Commission issued
Establishing a sound system for punishing and preventing corruption in the military
20082012 Work Plan which was aimed at advancing the construction of military
anti-corruption regulations, important for developing the military and providing
strong and powerful disciplined support and a political guarantee.
From 1992, Chinas military implemented a manned space program. On 15th
October 2003, China launched a manned spacecraft for the first time, Shenzhou 5
taking astronaut Yang Liwei into space. The vessel orbited the earth 14 times in less
than 21 hours, and soon afterwards made its voyage home, successfully landing in
Inner Mongolia. This launch marked China as the third nation to send an astronaut
into outer space after the Soviet Union and the US. In the following years, Chinas
44
manned space program steadily pushed ahead. In 2005, China launched the manned
spacecraft Shenzhou 6 which carried the two astronauts Fei Junlong and Nie
Haisheng 343 kilometres into outer space, at a speed of 7.8 kilometres a second,
and orbited the earth in 5 days. The two astronauts re-entry capsule entered into
an orbital module, and the astronauts carried out a series of scientific experiments.
On 25th September 2008, China succeeded in launching Shenzhou 7, which
carried three astronauts, Zhai Zhigang, Liu Buoming and Jing Haipeng. This launch
was the biggest so far, as Zhai Zhigang became the first Chinese person to do a
spacewalk, making China the third country to master such technology. On 1st
November 2011, Shanzhou 8 smoothly blasted off, and Tiangong 1s target aircraft
proceeded with space docking, a marked breakthrough for China, which had
successfully assembled and operated the first series of key technologies. On 16th
June 2011, Shenzhou 8 carried three astronauts into space, and succeeded in
docking with Tianging, establishing Chinas outer space presence. Before these
manned launches, four unmanned flights; Shenzhou 1 in November 1999,
Shenzhou 2 in January 2001, Shenzhou 3 in March 2002, and Shenzhou 4 in
2002 had been sent into space.
In addition to launching a manned space craft, various satellites for
communications, maritime, meteorology, and space detection were also launched.
The majority were independently researched and developed by China with a few
commercial satellites by foreign entities. As everyone knows, Chinas first satellite,
The East is Red (Dongfanghong) launched in April 1970.
As Chinas space program is run predominantly by the military, some large
countries, especially the US, were wary, despite China stressing that its space
program was peaceful, and for civil use.

In the 30 years since 1978, social development and national rejuvenation had relied
on a foundation that was being constantly adjusted and improved. Development
and rejuvenation profited from Deng Xiaopings first series of development theories,
and the concept of a harmonious society, both of which were put into practice.
Adjustment is the essential feature of Chinas reform process. Fantasy is
viewed as having no value, whereas results are paramount. In early 1978, Deng
Xiaoping proposed that Practice is the sole criterion for testing truth. China wasnt
constrained by the consecrated dogmatisation of Marxist, Leninist or Maoist
though. The nature of Deng Xiaopings socialist market economic theory allows for
ongoing adjustments and perfections, and even large changes, when necessary.
The intrinsic quality of Socialist Market Economic Theory is that it gives way
to the positive aspects of socialism and capitalism so as to promote the development
and advancement of the economy and society. Within Chinas reform process, this
theory has been constantly adjusted, but has provided a series of fundamental
45
principles for Chinas ongoing economic development. For instance, insisting on

public ownership and giving play to state regulation so as to reduce disparities in
regional development. Owing to state adjustments, the redistribution of national
income has countered further widening of the disparity between rich and poor. Of
course there is some content which can seem vague, but in practice this is so that
the future can enjoy scope for further adjustment. Adapting to development
requirements and resolving problems that may emerge at different points in time
serves to realise the most important objective: rejuvenating the Chinese nation. It
should be noted that socialist market economic theory was put into practice in
1992, and formally established 14 years after reform and opening up. Deng
Xiaoping hoped that this theory could be used as a guide for future collective
leadership, and safeguard the achievements of Chinas development.
Chinas course of development has abided by a number of principles which can
be summarised as follows.
1. The developmental process gives way to both the good qualities of capitalist
liberal economic systems and to socialist mechanisms. If capitalist systems uphold
freedom of thought, encourage creativity, and respect labour, and the socialist
system places emphasis on fairness in society and provides equal opportunities,
and strives to maintain social stability to realise the highest state interests.
2. Cautious implementation of new theories. Firstly, a region must pilot new
theories, which can be expanded once they prove successful in practice. If they
are not successful, then impact will be accordingly limited.
3. Adhering to practice as the sole criterion for testing truth.
4. So as to prevent the escalation of corruption, bribery and fraud, giving way to
the function of law as well as formulating a code of ethics is necessary.
5. The Communist Partys core governing idea is to realise and maintain the interest
of the people, and persist with advancing the construction of the party ideology.
This will ensure that the party is always consistent.
6. Strengthening the state in social undertakings, especially in helping the under
privileged overcome poverty, by developing social programs as well as developing
the economy and other important responsibilities.
7. While promoting the economy and ideological freedom, always maintain the
states authority and maintain state supervision in the economic development
process.
8. So as to maintain social unity, stability and harmony, it has been clearly stated that
part of this process will involve a portion of society becoming prosperous first.
9. By extending an open approach to the outside world, all development experiences
and achievements will have been derived, whilst paying attention to the local
culture passed down.
46
10. While striving to improve peoples livelihoods, close attention is paid to meeting
the spiritual needs of the people. Active prevention of money worship will
reduce its negative impact on society and peoples values.
11. When formulating and implementing a work plan, emphasis on the limitations
of targets, distinct procedures and timely appraisals will enhance peoples
confidence in the governments work.
12. Looking back on the cogs that formed history, without denial, will allow
experiences to be positively absorbed and learnt from.
13. A foundation of sufficient research can provide government reforms with a clear
direction, and ensure their smooth implementation.
14. While maintaining a democratic spirit, any attempt to destroy the states great
undertaking will be strongly opposed. Foreign political interference and internal
hostile forces are certainly not be tolerated.
15. National defence serves as a guarantee to powerfully safeguard national revival,
the strength of which should be developed from weaponry and organisational
construction and a spirited belief in developing its strength.
16. Devotion to safeguarding independence and territorial integrity, with an
openness to all kinds of solutions even if they run contrary to traditional
methods.
17. Actively maintaining world peace, and contributing to the development of all
people.
Although China has abided by the aforementioned principles, they have not been
turned into an ideology. It can be said that through this process of development
and revival, China has taken an extremely prudent approach to ideology regardless
of whether socialist or capitalist. China has bridged socialist stereotypes, and as part
of the development process, has proceeded with timely self-reflection and appraisal.
In the mid- 1990s, a liberalist trend emerged in China where the role of the state in
societal development began to weaken, as the economy became less restricted and
regulated. China responded to the problems that emerged by adjusting its policies
and maintaining a course along a middle road that ensured market economics had
socialist properties.
Chinas reforms have progressed, although they have always faced criticism from
the left wing, and from liberalists. China taken a pragmatic and logical approach to
resolving its ideological problems, and in fact has not encountered any significant
difficulties. A series of economic figures indicate that China has made genuine
achievements in development.
Each stage of development is opened up for discussion as to the states guiding
ideology. It can be said that without controversy, disagreement, and diversified
47
opinions, China could appear uncontrollably opportunistic, or as having a solidified

ideology which is unable to adopt an effective and practical development model.
It must be noted that Chinas pragmatic development strategy doesnt give the
reform course cause to rest, as its main objective is to bring about a great
rejuvenation for the Chinese nation. Reform is little more than a means of realising
this revival, with the revival being the sole belief which doesnt allow for deviation,
change, or adjustment.
In short, pragmatism is essential to Chinas road to revival. Supposing China
does not adopt this continuous development, and instead changes its strategy in the
event of an array of different problems that emerge at different times. It would be
at a complete loss as to what to do, and unable to continue its rise. The Cultural
Revolution is a good example of how ideology is able to overpower state interests.
Chinas non-conformist development model works on the premise that
developmental processes cannot follow a fixed or sanctified model when formulating
a measure or plan.
2
Lessons Arab people might learn from
The Scope of Reference

Looking at civilisation from all angles, it is not reasonable to use Chinas revival as
a measure for the Arab World due to their major differences. The most significant
being that China is a single sovereign state and the Arab World is not. This so
called sovereignty means, firstly that one nation can independently control its
resources. Without such control, there is no way of realising true independence,
which is exactly what has been missing since the Arab World broke free from
colonial rule. Putting it this way is not to start discussion about the establishment
of a single Arab state, and is not to refer back to the old topic of national unity.
However, following the Second World War, Arab people have continued to lack
coordination for formulating decisions and objectives even at the working level.
In the event that everything might fall apart, taking a look at Chinas
non-conformist development for reference to the Arab situation, is a practical
proposition. Although Arab states lack the means of acquiring various
capabilities-such as military might and international influence- they might
nevertheless look towards and see how China is organised and how its economic
developmental history might be used as a point of reference. Realising an Arab
revival requires that individual Arab states with quantities and varieties of resources
are subject to limitations, so that the Arab World as a whole is in a position to
launch investment cooperation and optimize the allocation of resources to realise
economic development. In fact, China also dealt firstly with the economy, and used
economic development as a means for a complete revival.
Learning from Chinas economic development need not infer overlooking its
overall aims, nor that Arab people wish to achieve the same overall results as China.
On the contrary, for the past two centuries Arab people have harboured their own
dream for revival. If Arab people under present conditions are still unable to realise
this dream, then they must strive to create conditions which effectively facilitate
sovereignty.
50
The foundation of Chinas non-conformist development is freedom of choice with

regards to reforms. The ultimate objective to realising a revival is constant and
unchanging, according to the conditions of each development phase. However, each
mechanism or plan allows for pragmatic modification and adjustment. If you say that
a major characteristic of development without dependence is independent decision
making, then this is certainly embodied in Chinas freedom of choice. Chinas nonconformity and development without dependence is a great achievement, and it is
these experiences Arab people can learn and take reference from. There are many
commonalities between China and the Arab World with regards to their problems
encountered in development and revival. China remains a developing country, but
when it was first established its economy and society were lagging in a way very
similar to Arab countries. In addition, both China and Arab countries share an
Eastern societal and cultural identity, as well as an abundance of natural resources.
In general, development without dependence is a comprehensive development
process for a civilisation, the core principle being that a single state can rely on its
own natural and human resources to prosperously develop. Of course, pursuing
development without dependence is not to deny any existing process involving
foreign dependency, or to call upon states to isolate themselves from the world and
not participate in integral processes. What needs to be emphasised is that foreign
reliance is what causes a civilization to lag behind. Less developed countries, freed
from the rule of developed colonialists, may continue to have relations, but they
generally involve the latter obtaining various industrial raw materials from the
former, and then going on to produce finished manufactured goods. This
phenomenon of relative costs and what is said to be the international division of
labour is explained as follows:
The emergence of international trade is due to variations in price between
products and countries, and if a country produces with comparative advantage due
to reduced production costs. This way, when proceeding with trade between
countries, it can enjoy a comparative advantage with is to everyones benefit.
According to this point of view, developing countries should specialise in the
export of natural resources, and developing countries in the export of manufactured
goods.
On account of the existence of such an irregular relationship, developed countries
endeavour to maintain their position as beneficiary, prolonging the reliance of the
developing countries upon them. The economic layers are straightforward;
developed countries control the surplus labour of less developed countries. Trade
levels involve less developed countries engaging in foreign trade which is dependent
on developed countries. At the level of finance, the capital from developed countries
is required to control the banking systems of less developed countries, thus hindering
less developed countries from implementing credit policies to drive production.
Technological levels involve less developed countries needing developed countries to
introduce various kinds of technology. These factors have resulted in less developed
countries being unable to make independent economic decisions or achieve
independent development.
Lessons Arab people might learn from Chinas Non-Conformist Development
51
In addition, foreign reliance on less developed countries gives rise to a hierarchy

of vested interests. This type of situation is further exacerbated by the to which less
developed countries are dependent on developed countries, causing them to lose out
on development opportunities, further impeding their revival. Developed countries
have no desire for less developed countries to rise, as they would be no longer able
to profit from this irregular relationship.
Realising economic development without dependence requires the intervention
of state power, and the formulation of economic decision making so as to prevent
foreign capital forming tight relations with government departments. Of course, the
state should differentiate instructional intervention from strict overall governance,
since the latter could throw up obstacles, with investment being blocked, itself
impacting development.
What needs mentioning is that the tide of economic globalisation in the early
1990s, and the process of integration into the world economy in reality only
strengthened irregular economic relations between countries. Developing countries
that have received investment from developed countries and chosen to integrate into
the global economy have in fact only extended their dependence on developed
countries. The interdependence between developed and developing countries
results in a relationship which favours the developed countries, as they have more
command over the nature of the cooperation, conditions and boundaries. Thus, the
effort developing countries are making to integrate into global economics is in fact
working in contradiction to their own development objectives. This has harmed the
interests of people from developing countries who endure lower living standards
compared with developed countries. In addition, developed countries have the
resources to promote their higher quality products and services to developing
countries which they have no choice but to accept.
In this context, states striving to realise development must adopt certain steps to
regulate and control domestic production, and satisfy domestic demand so that
their people can dispense with the imported products on which they are dependent.
Economic globalisation requires structural adjustment, which means that states
are required to relax their controls in various aspects such as production, fixed
pricing, foreign trade, and foreign capital. A ceasing of state subsidies and
privatization policies means that the state must forfeit its right to economic
management in favour of the market. This creates further pressure on developing
countries. Of course, the nature of structural adjustment is not absolute, as
developing countries can issue compensation and enact protectionist policies for
their societies and national industries, thus reducing negative impact in the service
of its national development. In truth, these globalisation regulations that other
countries are forced to abide by only serve to maintain the economic structures and
development orientations of developed countries. The main reasons for associations
with other countries are to serve their own needs. In short, regardless of whether a
state decides to integrate or reject globalisation, they must guide their economies
through instructional intervention, in order to realise development.
52
Developing countries have the typical characteristics of agricultural-based

societies and in order to develop independently, agricultural production must first
be expanded so as to produce enough to satisfy the demands of their domestic
market rather than depending on imported products. They should adjust their
monetary policy by establishing an efficient state financial structure and currency
reserves which can be used for productive programs. It is necessary to control
natural resources, as independence is decided by how resources are used, and create
conditions that will propel the countrys technological advancement. Following this,
the country must again survey its past decisions, and make corresponding
adjustments. If they have failed to develop for the benefit of society, experienced an
emergence of polarization in the hierarchy, or any other negative issues that can arise
as a result of development such as corruption, then these issues must be resolved.
In short, if the aforementioned steps are followed as a course for development,
this means that the country has found a distinct development path that suits its own
national conditions. This does not require blind imitation of another states
development model, or a rigid adherence to a fixed ideology.
The Arab Worlds Development of Dependence Predicament

The fact that the Arab World has always depended on Western countries
economically as well as in other fields is an objective reality. However, there are
variables which affect the degree of a countrys dependence, such as the duration of
Western occupation as well as the way in which resources were seized over different
periods of time in different regions. For example, western countries brought capital
rather than colonialist troops to Egypt and Tunisia, but were then quick to protect
the interests of their expatriates as a justification for invasion. A number of
countries such as Algeria had coastal cities which were modernised in accordance
with European models, although its inland and rural areas continued to develop
following a traditional course. The traditional economic model of the Gulf States
only changed after oil was discovered, and colonial countries satisfied their practical
interests by building garrisons which stretched as far as Iraq and the Sham region.
In these cases, Western countries also initially brought capital before dispatching
colonial troops and arms to occupy. These countries in truth were established to
benefit western countries between which confidential agreements were signed
commencing economic dependence.
The degree of dependence Arab countries have on Western countries is also
related to their level of productivity, foreign relations, and social stratification prior
to colonialization. In some Arab states, foreign capital was directly controlled by
foreign trade, and some countries were flooded with a comprador class which
provided foreign capital services.
Countries such as Egypt, Syria, Algeria, Iraq, and Libya underwent a process of
nationalisation following independence, which strengthened their central planning
53
but weakened the position of foreign capital in their economies. The establishment
of state-owned economies built a foundation for an independent economy and a
solid industrial foundation which replaced imports. Other countries failed to adopt
such measures or continued their dependence on foreign capital and market
mechanisms, thus placing priority on developing the private economy. Regardless of
whether this is due to internal management, or Israels standoff creating and the
enormous burden on productivity, the implementation of central economic planning
is not enough to allow these countries economic independence. Following this, some
countries (such as Egypt) have again revaluated their economic development path
and began to depend on foreign investment, liberalised their economy from state
intervention, and implemented industrial policies that encouraged exports. Countries
without regulated economic policies (for instance, Iraq before its US occupation in
2003) signed agreements and contracts with other countries forming tight relations
with foreign investment, and further deepening their reliance. States dependent on
oil exports benefited from rises in oil prices from the 1990s, but these countries
invested this money abroad, therefore further magnifying foreign reliance. In short,
all Arab states rich and poor have economies that to some extent involve
development with dependence.
Countries can use certain indicators to measure their degree of economic reliance,
for example the ratio of their gross exports with GDP. If a countrys gross export is
proportionally large compared to GDP, this can account for dependence on other
countries and drive to produce. Other countries can directly influence the
development of a country depending on the concentration of exported products. If a
country mainly exports one or a number of products, then there is little possibility
that this country will be able to develop economic independence. There are other
additional indicators such as the ratio between the total value of exports and
imports, and the degree of commodities exported to one or a number of countries.
There is also the ratio between foreign investment and the total investment in society,
the concentration of foreign investment in industry, the amounts invested by the
principle countries, the revenue reductions enjoyed by foreign enterprises, and the
proportion of revenue paid to the occupying countries. These numerous and
complicated indicators stress that the major factor influencing the independence of a
states economy is foreign reliance, and how easily they can get rid themselves of it.
Little research has been conducted that assesses the degree and implications of
foreign dependence in the Arab World. However the findings are a good place to
start for conducting a preliminary analysis. Hereon, we reference research conducted
by Egyptian economic scholar Ibrahim Al Issawi, whose collaborative research with
the Centre for Arab Unity Studies and the United Nations University developed part
of the research project, A New Future Arab Model. Professor Ibrahim Al Issawi
selected the Arab Worlds three most representative countries geographically from
west to east (Algeria, Egypt and Saudi Arabia), and conducted a qualitative analysis
which revealed the degree of economic foreign reliance during the period after
independence to the end of the Cold War. In the following table, 0 represents
economies without any foreign dependence, 100 represents economies with
54
complete foreign dependence, 45 is a demarcation point between economic foreign

dependence and standard foreign dependence, 28 is the demarcation point between
economies with no foreign dependency and economies with standard economic
foreign dependency.
Chart 1: The degree of economic foreign dependency in Algeria, Egypt, and
Saudi Arabia
Algeria
Index
Time
54
Before 1957
39
19571967
37
19681973
40
19741980
46
After 1980
Egypt
Saudi Arabia
Index
Time
Index
Period
43
Before 1974
38
19521956
47
19741980
44
19571973
46
19741980
46
After 1980
42
After 1980
Chart 1 presents how the economies of Algeria, Egypt and Saudi Arabia have been
dependent to at least a standard level for a considerable period of time. It is worth
noting that Saudi Arabia is the largest producer of oil in the Arab World, and has
always maintained a high level of foreign dependence.
Economic foreign dependency is the most important factor influencing whether
a state can achieve independent development. Of course, other fields of foreign
dependency also impact on a states development. Extended periods of foreign
dependence which cannot be relinquished make formulating accurate plans
impossible. What needs to be emphasised is that the foreign dependence of Arab
states is not only limited to the field of economics, but also visible in various other
aspects such as politics, culture, military affairs, technology, food security, and
foreign relations. Chart 2 presents Professor Ibrahim Al Issawis analysis of Algeria,
Egypt and Saudi Arabias degree of overall foreign dependence in different fields.
Chart 2: The degree of overall foreign dependency in Algeria, Egypt, and
Saudi Arabia
Algeria
Index
Time
Egypt
Index
Time
49
19521956
50
Before 1965
44
19571967
44
19651973
47
19681973
49
19741980
54
19741980
56
After 1980
46
After 1980
Saudi Arabia
Index
Period
62
19521956
66
19741980
64
After 1980
55
Chart 2 not only shows that the degree of overall foreign dependence is relatively
high, but also highlights this problem is due to a high level of economic foreign
dependence. In other words, the degree of foreign dependence in the non-economic
fields for these three countries is far more serious than that of economic fields
alone.
There is a close relationship between the backwardness and the degree of foreign
dependence, revealing that it has not only impeded an Arab revival but also
impacted the potential developmental benefits that should be afforded to individuals
and society. Research has already indicated that foreign dependence is closely
related to stagnant economic development and an unfair distribution of peoples
incomes. Therefore, we believe it is not difficult to understand why the Arab World
with its abundance of resources has always faced low levels of development in
productivity as well as the weak operational abilities of political, economic, and
social institutions. These problems have rendered a slow pace of the Arab Worlds
long-term development in the world.
Economic research on per capita income is often used to measure a countrys
developmental achievements, and even holds it the main (and sometimes only)
factor indicating a countrys level of development. Booming oil prices from the early
1970s until the end of the 20th century resulted in a 1% increase in Arab countries,
which was inferior to the global average of 1.3% over the same period. Among oil
producing countries, per capita income has only increased annually by an average
of 1.3%, and non-oil producing countries by 1.73%. In 1995, people from Arab
states had an average income of $2,221 which increased slightly to $2,465
by 2001.
Other economic indicators in Arab countries show a similar situation. From
1975 to 1998, GDP in Arab countries increased from $256.7 billion to $445.7
billion, which is an annual average increase of 3.3%. Although this exceeded global
averages of 2.9% over the same period, it is mainly due to rising oil prices and not
a development in productivity. Therefore, the increase in overall GDP for this
period is attributed to the comparatively small populations of oil producing
countries. However, 85% of the Arab Worlds population live in non-oil producing
countries, so either their GDP experienced negative growth, or the growth rate was
insignificant. It is also worth mentioning that the population of Arab states
increased at a rate of 2.8%, which hindered the positive effect of economic
development from being presented in the per-capita income figures.
In terms of the fair distribution of income, the United Nations Development
Program in 2008 published the Arab Human Development Report which pointed
out that tight social relations in Arab states meant that the coverage of charitable
activities was broad, and that unfair distribution of income wasnt as severe as that
in other developing countries. However, at the same time a mass of data indicates
that this problem is worsening. According to data published by the Economic and
Social Commission for Western Asia, from the early 1980s until the early 90s, the
wealth of the richest segment of cities in Egypt occupied 27% rising to 28% of
societys total wealth. The richest segment of people in agricultural regions occupied
56
21% of societys wealth which rose to 28%. From 1986 until 1992, 25% of the
Jordanian population were of a low income and disadvantaged segment of society
occupying 7.3% of societies total wealth which went down to 6%. In Yemen, the
income of rural families amounted to 64% of that in cities.
To sum up, it can be observed that Arab countries have not developed as much
as they should have, and foreign dependence without doubt is a major reason.
Chinas Experience
Certain conditions will affect a countrys ability to create balanced development
without dependence, for example the national territorial area, geographic location,
population, natural resources, national culture and social integration.
Without a doubt, China has all of the aforementioned conditions. Chinas
territory of 9.6 million square kilometres includes Taiwan, Hong Kong and Macau.
China occupies a territory of 9.6 million square kilometres, and more than an
18,000 kilometre of coastline running north to south which borders the coastal
waters of the Bohai Sea, the Yellow Sea, the East China Sea, and the South China
Sea. The national border is more than 22,000 kilometres which is shared with
North Korea, Russia, Mongolia, Kazakhstan, Kyrgyzstan, Tajikistan, Afghanistan,
Pakistan, Bhutan, India, Nepal, Burma, Laos, and Vietnam. With the exception of
Russia, all other countries are smaller in area than China. The Chinese population
in the late 1970s stood at nearly 1 billion people, which had reached 1.35 billion by
2012. China is rich in minerals such as coal, oil, phosphoric acid, salt, iron,
titanium, tin, lead, nickel, copper, aluminium, gold, and silicon. It benefits from
multiple climates and territory with great rivers. China is rich in rice, sugarcane,
citrus, and various other agricultural products, and an abundance of wildlife. Of
course, China is also deficient in some resources such as fresh water, and arable land
which stands at only 10%.
New China has always attached great importance to development without
reliance from its very inception. During the years following Chinas close relationship
with the Soviet Union in the late 1950s, great effort was put into self-reliant
development. Of course, as this chapter refers, China has achieved a great deal in
terms of development since the 1978 reform and opening-up policy was implemented.
China has gradually perfected its socialist market economic theory, and the
important concepts such as the Three Represents and the construction of a
harmonious society have led economic development.
Socialist market economic theory was founded on a development path that was
different to any other economic development theory, known as Socialism with
Chinese Characteristics. The Chinese characteristics expressed how Chinas
position in the market economy was distinctive. Its specific circumstances and
requirements have been set out, and are not rooted in any dogmatic ideology. At the
same time, just as this book has repeatedly mentioned, this theory can be continually
adjusted and perfected as is required in practice.
57
In 1978, China formulated a completely new development strategy which set out
a course for independent economic development. Through this chapter, we can look
back on how Chinas rise came about, and how it strove to become an independent
developing country. China has completely established a development program in
which policymakers can effectively guarantee each stage of its development
direction. From 1978 to 1988, China avoided foreign dependence by developing
production. This single policy not only effectively accelerated agricultural
development, but also met domestic consumer requirements for agricultural
products. Meanwhile, various industries enjoyed technological innovations which
established a good foundation for the early phase of reforms, the Four Modernizations.
Developments benefited all members of society and adjustments were made to
policy along the way so as to reduce disparities in income between urban and rural,
and rich and poor. In 2006, the concept of a harmonious society was introduced
whilst continuing to eliminate the negative impacts of development, especially with
regards to corruption.
The turn in Chinas economic development did not really begin until the 1990s
with the tide of economic globalisation, but it was in fact as early as 1978 that
China really began to integrate into the world economy. China placed great
emphasis on attracting foreign investment and developing trade so as to benefit
domestic economic development and also accelerate the flow of capital and power
into China. This helped China become influential and attractive in economic fields,
and thus increasingly important in the international political arena. During
integration into the global economy, China always held on to the single principle of
maintaining its own interests. For example, it always exercised strict control over
its RMB exchange rate, thus protecting the price of its products on the international
market, as well as keeping China at a manageable distance from the global
market.
Chinas economy is full of life, but integration into the global economy has been
relative and selective. Their relationship has been interdependent, rather than
unilaterally dependent as with weak economies. Among the countries that have
economic relations with China, there are those with great power, particularly the
USA. These major nations need China, and China needs these major countries. This
type of relationship and participation in globalisation has become a natural choice
for China. Chinas participation is best illustrated by its entrance into the World
Trade Organisation (WTO) in 1995, which it hoped would give full play to its
export capabilities by taking advantage of the WTOs free trade mechanisms for
accelerating domestic economic development, and attract more foreign investment.
Owing to US obstructions, China did not formally ascend into the WTO
until 2001.
What is worth noting is that Chinas reforms were structurally adjusted selectively
for economic progression. Although China strove to give full play to market
mechanisms, it has sufficiently considered globalisations historical background as
well as international economics, and the requirements proposed by financial
institutions. However, Chinas economy has always been steered by the state to
58
serve the requirements of its integral development. For example, China has
improved the competiveness of its commodities on the international market by
supporting private enterprises with financing, and helping them reduce their
production budgets and commodity prices so as to compete against the US, Europe,
and Japan. Although it came under enormous pressure from other countries, China
still supported private enterprise. In response, the US repeatedly protested to the
WTO, who criticised China for subsidising the exports of private companies. In
2007, the US made its third official complaint to the WTO protesting that China
provided support to parts of its enterprises which they believed was in violation of
the WTOs fairness principles thus requesting that China immediately end its
subsidies. In response, China lodged a complaint with the WTO in 2008, opposing
US restrictions on imported Chinese products into the US market, and the adoption
of anti-dumping measures. This China-US game is in fact reflected in Chinas
formulation of independent economic policies, and illustrates how state sovereignty
should be the foundation for realising independent development. Only by doing so
are a states interests guaranteed, and the state benefit from global economic
development, rather than the benefits going to rivals.
As previously mentioned, from 1978 China gradually integrated into the global
economy. Doing so attracted foreign investment, developed foreign trade, and
strengthened contact with various countries in the world whilst always maintaining
independent economic decision making. Of course, this is not to suggest that the
Chinese economy prior to reform and opening up was dependent on foreign powers,
or that China hoped that reform and opening up would alter this situation. There
is no need to argue that China originally hoped to alter foreign dependence through
this policy. We are only concerned as to whether Chinas non-dependent development
was successful, and whether there are cases that Arab countries can reference, so as
to rid themselves of foreign dependence.
Data related to Chinas economy (please see part 2, charts 5 and 7 related to
structural adjustments and economic data) makes clear that their economy is in the
process of taking big strides down the path to success. Of course, for any
development models to be successful requires time, and China is very level headed
in this knowledge. For this reason, China will have become an affluent society by
2020, and reach the level of moderately developed countries by 2050.
As previously mentioned, per capita income is an important indicator of
economic development, and from this we can see that China has also been
successful. From 1978 to 2012, per capita income increased by approximately 13%,
which was apparently higher than the global levels of the final quarter of the 20th
century of 1.3%. Although the growth rate has been relatively large, the size of
Chinas population has meant that the per capita income compared with global
levels is still relatively low. In 2012, Chinas per capita income was ranked at
107 in the world, so it is inappropriate to compare this with Chinas enormous
economic aggregate. Chart 3 shows Chinas increase in per capita income between
1978 and 2012.
59
Chart 3: Per Capita Income in 1978 and 2012.

Year
Rural Per Capita Income (RMB)
Urban Per Capita Income (RMB)
1978
134
343
2012
7,917
24,565
The aforementioned data indicates that China has developed enormously, and
effectively improved living standards. However, it remains to fulfil its ambition in
becoming a harmonious society, and the hoped for all-round wellbeing. It also has
not yet resolved rising disparity between incomes.
In conclusion, many of Chinas development achievements can be used for
reference. However, we cannot help but ask if the Arab World has the conditions to
learn from Chinas experiences of non-dependent development? There are five
indicators to reference; national territorial area, geographical position, population
numbers, natural resources, and the national culture and social integration.
Factors Referenced
In terms of the five aforementioned indicators, the Arab World enjoys favourable
conditions, which could be said to be even better than China. For example, the Arab
World has an area of 13.6 million square kilometres, which occupies 10.2% of the
worlds surface. It stretches from Mauritania in the west to Oman in the east which
amounts to 1/6 of the world circumference. The Arab World stretches across both
Africa and Asia, of which 72% is in Africa and 28% in Asia. Its position is
advantageous and it has become a continental centre. The Arab World is surrounded
by five bodies of water. Namely, the Mediterranean, the Red Sea, the Arabian Gulf,
the Atlantic Ocean, and the Indian Ocean. It borders twelve countries; Iran, Turkey,
Niger, Mali, Eritrea, Ethiopia, Chad, Central Africa, the Democratic Republic of the
Congo, Uganda, Kenya, and Senegal. If you take the Arab World as a whole, these
neighbouring counties are all comparatively smaller. The population of the Arab
World stood at 350 million in 2012, which is a third of Asia, and two thirds of
Africa. The Arab World, if taken as a whole, is the third most populated region
following China and India and surpassing the US. It is also rich in natural resources
among which are oil, natural gas, and solar energy, as well as phosphate, potassium,
iron and salt. The climate is diverse, with numerous rivers, vast expanses of arable
land, and it is rich in animal diversity. It has relatively high social integration, uses
a common language, has a common culture and collective memory. Although there
are also minority groups, the vast majority of inhabitants are of Arab
denomination.
Looking at the aforementioned situation, the Arab World as a whole has the
conditions required for non-dependent development. However, it doesnt operate as
a single entity, and is in fact composed of 22 states meaning they have no way of
60
realising non-dependent development. Although some countries have a comparatively

large territory or population, there are also shortcomings. For example, Sudans
territory is 1.8 million square kilometres, and has multiple races, cultures, and
religions, but only one economic structure. Its industry falls far behind and there is
a strong dependency on nature and foreign aid. Once more, Egypt has a population
of 90 million people which is the largest in the Arab World, and it is also the
country with the greatest possibility of achieving non-dependent development.
However, its specific geographical location and status as a military threat to Israel
from the late 1940s to late 1970s has resulted in its GDP only accumulating at a
rate of about 15% by the late 1980s. In addition, rapid increase in population
growth (of one million a year) has had a negative impact on economic productivity.
From the 1980s, Egypt reformed its economic policies, and started to deepen its
cooperation with Western countries. Even Saudi Arabia, the Arab Worlds most
prosperous country with the worlds largest oil reserves, and vast territory (2.25
million square kilometres) enjoys an advantageous geographical position. Saudi
Arabia only lacks other natural resources such as water and a large population.
Therefore it can also be said that if the Arab World was to fall apart, there would
be no way of realising non-dependent development. Only by becoming a single
economic entity which independently manages its resources can the Arab World
achieve its aim of non-dependent development.
Owing to the political differences of its various leaders, integration and
cooperation between the Arab states has never been effective. However, the League
of Arab States established in 1945 proposed that: The aim of the League of Arab
States is to tighten relations and strengthen cooperation between countries in
various fields such as trade, agriculture, and industry.
When strengthening unity and cooperation between Arab states, people would
often mention the Economic and Social Council of the Arab League. On 25th May
1953, the Council convened for their first meeting, deciding on cooperation by
exempting member states from import taxes between states on various products
such as agricultural products, and natural resources. This is believed to be the first
measure in which these countries acted as a unified economy. At that time, unified
economy as a form of words was broadly used in Arab official documentation, and
was later replaced with economic integration.
The Council was established in accordance with the Arab League on 12th April
1950 and included Egypt, Syria, Saudi Arabia, Jordan, Iraq, Yemen, and Lebanon.
They together signed the Joint Defence and Economic Cooperation Treaty between
the States of the Arab League. The treaty stipulated that ministers were responsible
for the economic management of member states, and primarily responsible for the
organisations various economic activities. In 1977, the councils functions were
adjusted to become responsible for planning, organisation, and coordination. The
Council has within it a number of economic and social organisations such as the
Organization of the Arab Petroleum Exporting Countries (OAPEC), The Arab
Administrative Development Organization (ARADO), Arab States Broadcasting
Union (ASBU), The Arab League Educational, Cultural and Scientific Organization
61
(ALECSO), Arab Centre for the Studies of Arid Zones and Dry Lands (ACSAD, The
Academy of Scientific Research and Technology (ASRT), the Arab Labour
Organisation (ALO), Arab Organization for Agricultural Development (AOAD),
Arab Satellite Communications Organization, Arab Atomic Energy Agency (AAEA),
Arab Industrial Development and Mining Organization, Arab Fund for Economic
and Social Development (AFESD), Arab Bank for Economic Development in Africa
(ABEDA), The Arab Investment and Export Credit Guarantee Corporation, The
Arab Monetary Fund (AMF), Arab Authority for Agricultural Investment and
Development, and The Arab Civil Aviation Organization.
What should be noted is that these organisations were set up not only to manage
sovereign resources, but also to carry out research, circulate, and coordinate work
as opposed to unveiling mandatory resolutions. Therefore, as one economist
pointed out, most of the resolutions made by the Organisation for Economic
Cooperation and Development (OECD) did not touch on the core issues relating to
Arab development. The fundamental crux lies in political divergences between
various member states. In the case of the Council, problems could only be sent to a
high level of the organisation such as the councils foreign affairs minister, but had
no influence on final decisions.
In 1957, proposals made by the Council, and the Arab League had to pass The
Arab Economic Unity Agreement, and in 1964 the Council of Arab Economic Unity
was established. This council was originally founded by 7 countries which was later
increased to 11; Egypt, Iraq, Syria, Jordan, United Arab Emirates, Palestine, Yemen,
Sudan, Somalia, Libya, and Mauritania. Its purpose was to realise economic unity
between Arab states, and promote free movement in terms of its personnel, capital,
commodities, services, and technology. The council divided the various industrial
alliances into numerous industries such as steel, textiles, chemical fertilizers,
construction, fishing, food processing, paper making, sugar refining, leather,
overland logistics, shipping, railways, ports, cement, construction materials,
pharmaceuticals, medical equipment, restaurants, tourism, tyres, and rubber. In
addition, the council was also divided into the Arab Cooperation Council, General
Arab Insurance Federation, Arab Tourist Enterprises Alliance, Arab Agricultural
Cooperative Alliance, Arab Investment Alliance, Arab Commercial Contracting
Alliance, as well as the establishment of several enterprise alliances such as the Arab
Animal Resources Development Company, the Arab Pharmaceuticals Company,
and the Arab Industrial Investment Company.
The main purpose of these alliances was to promote cooperation between private
enterprises, and help them resolve any operational issues. Although similar political
divergences appeared between countries, each alliance promoted common
development through launching natural resource joint investments, and aspects of
sovereign management which made extremely limited contributions.
In October 1973 following the Fourth Middle East War, oil producing countries
used oil as a weapon by cutting off its supply to the west. Against this backdrop,
from 1973 until the early 1980s, the economic unity between Arab countries
continued to progress, and the League of Arab States formulated a development
62
strategy which covered all aspects of the Arab World. For example, in 1974 the
third Arab Industrial Development Conference in Tripoli approved The Industrial
Development Strategy for the Arab states, and in 1977 the Arab Organization for
Agricultural Development (AOAD) published the Arab Agricultural Security
Strategy. In the same year, the Arab Industrial Development Centre published the
Arab Industry Independent Development Strategy. In addition, other related
organisations have also published development strategies which encompass other
related issues such as human resources and social undertakings.
In 1975, ECOSOC instructed its secretariat to formulate the Joint Arab
Economic Action Strategy. In November 1980 in Oman, the Arab Summit ratified
this strategy but it was then postponed by the Arab League in 1983, and never
became workable.
From the 1990s, the tide of economic globalisation resulted in the degree of
openness to foreigners extended daily, and the Arab unified economies process of
integration entered into a new phase.
In 1996, the League of Arab States convened for its first summit since the Gulf
War in 1990. In order to implement decisions made at the summit, the General
Agreement on Tariffs and Trade (GATT) (which transitioned into the WTO in
1997) and ECOSOC ratified the The Great Arab Free Trade Area Implementation
Plan, which was then put into effect in 1998. Initially, this plan for the establishment
of a free trade development area had a ten year time limit, which was then
compressed to 7 years with its preliminary construction to be fulfilled in 2005.
Free trade areas were established in a phased and sequenced manner affording
all countries a 10% reduction in tariffs. This measure had a positive effect on the
development of production and trade between Arab states. In the early 1990s, the
scale of trade between countries hovered between $22 and $26.2 billion reaching
$31.3 billion in 2000, $39.6 billion in 2002, $88.6 billion in 2004, and broken
through to over $1.079 trillion in 2006. However, along with increases in
international trade between the Arab states and other countries, the total trade
between Arab states themselves increased little in comparison. This to a degree
explains the limited achievements of the economic and trade cooperation between
the Arab states.
In addition, the Great Arab Free Trade Areas had an effect on some of the
negative impacts brought on by globalisation, and in fact played a significant role.
When economic integration is realised to some degree among the Arab countries,
the Arab people should attain a better position in negotiations with other countries
concerning trade liberalization, and then adopt more effective measures which
respond to protecting the economy rather than accepting the various terms proposed
by international organisations, which are themselves controlled by major countries.
Arab countries should also have strengthened their industrial capacity so as to be
more competitive on the international market, made better use of the conveniences
brought about by trade liberalisation, expanded the scale of trade between Arab
states, and reduced dependence on foreign commodities.
63
In effect, through participating in a process of economic globalisation, Arab

countries have extended their reliance on western countries. Economic globalisation
requires structural reform which limits a countrys economic development and
contradicts the fundamentals of non-dependence development. A large disparity in
productivity exists between Arab and Western countries due to the latters monopoly
on advanced technology. Relationships with the west are principally focused around
the export of oil, and the import of various manufactured products. This situation
is very difficult for Arab countries. Such a relationship serves only to benefit
Western countries, and has resulted in Arab countries becoming reliant on them.
Natural resources alone have not brought the beneficial conditions in which
Arab people can realise non-dependent development, and previously mentioned
conditions are the same.
Even so, this does not mean that realising a unified economy is impossible for the
Arab people, or that the steps taken in pursuit of this unification have been futile.
These free trade-areas and the League of Arab States aim to create an integrated
economy which references European experiences, and plans to establish an Arab
Central Bank and United Market by 2020. Considering these past lessons, the main
influences on the aforementioned objectives are the political divergences between
nations.
From Non-Conformist Development to a Non-Conformist Rise

In conclusion, the Arab states have yet to find a path to non-dependent development
at present. They are still unable to unify their economies sufficiently. Such
unification would enable them to make use of their resources, independently
formulate economic policies, and have the freedom to make adjustments to the
different phases of development.
What is special about Chinas non-conformist rise is that its ultimate objective
is to serve the interests of the state, without ideological constraint. Arab people
might reference Chinas experiences by firstly strengthening economic integration
between states, and improving the degree of unity so as to realise economic
development. Without economic development, there cannot be government, a
military, and various other fields.
Returning to the sluggish Arab revival, development should be looked upon as a
number one priority by its people and learn from Chinas non-conformist rise.
Part Two
Civilisational Repositioning and the
Future of the Arab People
1
What does Civilisational Repositioning
actually mean?
In the mid-18th century, the industrial revolution in England brought about one of
the biggest turning points in human history. Along with material development came
an unceasing accumulation of intellectual and spiritual wealth which bisected the
world by the start of the 21st century; the developed and the undeveloped world.
The formers levels of state, society and individuality are all a direct result of the
industrial revolution, and these advances had a tremendous impact on the history
of human productivity. The latter has had no way of drawing on this experience,
gaining autonomy, or of influencing other nations or their peoples productivity.
Regrettably, the Arab World falls into the latter category.
The decades following the Second World War were bright, and it was believed to
be the optimum opportunity to realise a material civilisation and create social and
political progress. However, a crucial element which contributed to such industrial
success in the later stages of development was the arms industry, in particular the
production of non-traditional weapons. Finally, it opens up and develops space for
communication and information technology, and lays a solid foundation.
Some Asian countries have stepped onto the train of optimum opportunities, and
have had far reaching and significant influences on the course of human
development. China is an outstanding example of this, and already enjoys the
strength of a major world power.
However, many countries have become uncertain about and missed optimum
opportunities. This has occurred for a number of reasons. One reason is that they
might not have formulated an effective development strategy or developed strategic
thought, leading to a loss of control over sovereignty and natural resources. The
Arab World is an example. Arab countries are not currently in a position to
advance, or able to start over. The experience of the Arab people in the late 19th
and mid-20th centuries underlines this point.
There is an enormous disparity between the civilisations of the Arab World and
the US. The US has various reasons for controlling and using the Arab people, such
as fighting dissidents which has resulted in Arab people merely relying on their
national power and resources. The USs powerful developmental momentum tends
68
towards diminishing cultural disparities. It seems unreasonable to claim that the

disparity between Arab countries and the US can be redressed at the current time.
For lagging nations, a unique and viable approach would be to establish a
community of interests with developed countries which might facilitate mutually
beneficial cooperation rather than purely expecting to benefit. Lagging nations have
referenced the successes of advanced countries, and drawn upon their various fields
of civilisation. Such a relationship would also be beneficial for the long-term growth
of advanced countries.
China has a similar history cooperating with advanced European countries such
as Germany and France, and there are examples which this chapter will expand
upon. Chinas developmental process has been contained and obstructed by the US,
so China has steered toward attracting investment and advanced technology from
European countries, creating enormous bilateral investment opportunities. Chinas
technology import has benefited its development, and actively encouraged new
high-tech enterprises to invest into science and technology. This has enabled
enormous progress allowing China to leap from the exploring and understanding
to conducting autonomous research. We have found that when there is a massive
disparity between countries in terms of politics, society and culture, establishing a
community of interests can create a means to communication. The information
revolution has further brought about the possibility for civilisations to converge.
However, we must also be aware that the term community of interests is realistically
suited to comparable countries. To serve lagging nations, we must firstly follow the road
to advancing them, and implement the principle of civilisational repositioning. Such a
concept involves a follower wishing to develop into an equal partner. Describing
civilisational repositioning as the aims or pursuit of common interests creates
contradiction for the lagging country. Advanced nations will not help those less
developed, and less developed nations are frequently unable to comply with the requests
of developed nations thus leaving them powerless to resist control and exploitation.
Before civilisational repositioning can even take place, establishing national
willpower is extremely important. Without it, any plan or scheme will fail to
materialise, and blindly following a developed or developing country is also not
wise. The reason China has spread its wings and attracted the worlds attention is
due to its free and steadfast national will. China is an independent and sovereign
modernising country, and more than thirty years has passed since reform and
opening up. It has concerned itself with a practical exploration to achieve fitting
national conditions and effective development projects, resulting in notable
humanitarian and material achievement.
A strong national will can transform into a workable plan with a long-term
vision, but must not lack decisive leadership. In addition to drawing up and
participating in a plan, or developing projects for a national revival, no effort can
be spared during the implementation, supervision and evaluation of such schemes.
Doing so would thoroughly resolve problems as they arise, and actively responded
to unrelenting changes in global conditions. It could be said that it is on account of
New Chinas powerful leadership that such enormous advances be realised,
especially since opening up.
What does Civilisational Repositioning actually mean?
69
If the Arab World has the will to liberate itself, this solidarity would be enough
to function independently from other countries. This will enable participation in
formulating a scheme for improvement and rejuvenation. The form and degree of
cooperation does not matter, even if it emerges in some countries initially instead of
being in pursuit of a unified Arab utopia. Another possibility is to form a civilised
leadership which is conscious and consistent. The nature and form of the leadership
is unimportant as long as it is not in pursuit of a utopia. If this is the case, will any
country help Arab nations adopt civilisational repositioning?
In truth, many possible factors have led these countries being few and far
between. It should be emphasised that western countries only require resources
from the Arab World, and are unwilling to support development and advancement
in which they would not benefit themselves. However, China is an emerging nation
which the Arab world might follow. By pursuing Chinas path to revival, the Arab
World might advance its own civilisation, and also support China through their
own development.
The reason that China is a first choice for the Arab Worlds implementation of
civilisational repositioning is that its revival has seen some outstanding results, and
also because they will become extremely influential in international politics. The
global structure controlled by western countries is the main reason the Arab
civilisation has fallen behind. However these countries should be powerful enough
to supersede the west on the world stage, or at least contend with them.
China can help liberate Arab people currently being exploited by external
pressures so that they might create a flourishing modern Arab civilisation built on
mutually beneficial cooperation. It is worth pointing out that Chinas development
has apparently limitless prospects. This should draw interest from countries across
the world, including Arab nations. In this context, the Arab World should engage
in competition as early as possible.
In conclusion, the concept of civilisational repositioning can be summed up as
lagging nations pursuit of revival, prepared with an engaged national will, and a
conscientious, loyal, and visionary leadership wishing to establish tight relations
with other advanced nations under two aspects:
1. The advanced nation should defend the interest of the lagging nation, meet
their active demands, protect them from the pressures and interferences of the
outside world, and create an adaptive environment in which they can implement
plans for a national revival.
2. Advanced nations can help lagging countries by providing the fruits of their
material advancement unavailable to developing countries. This will expedite the
implementation of plans for a national revival. Advanced nations will also benefit
from this cooperation, through the closing up of the gap between developed and
undeveloped nations.
Yet, there are questions that require response. Should China adopt the Arab
World as they undergo civilisational repositioning? The following sections answer
a number of questions: will China accept Arab civilisational repositioning? What
can Arab countries do to aid this process?
2
China acting as a possible example for
Arab undertaking of Civilisational
Repositioning
Chinas view of the outside world has changed since Mao Zedongs period of
reform, although the deep impact of his reforms are remembered for serving the
national revival and realising state interests. With this as a starting point, China
already becomes a possible reference point for an Arab implementation of
civilisational repositioning.
The Mao Zedong Era for China and the World

The Chinese Communist Party was founded in 1921, and stated that national
interests are the highest. When they finally came to power in 1949, they continued
to adhere to this single principle.
Following the Korean War (19501953), the Kuomintang was beaten by the
Communist Party forcing them to retreat to Taiwan. This led to the establishment
of the Peoples Republic of China which strived to be recognised by the international
community. New China adopted similar positions to their allies in the Soviet Union
with regards to international affairs, especially the liberation of Arab countries from
their colonial rulers. The principle of peaceful coexistence and socialist development
was initially centred on the Soviet Union. So as to gain an understanding of and
support Arab countries, China called on and used peaceful means to resolve
problems in Palestine. They proposed maintaining the legal interests of Palestinian
refugees, and opposed US interference. China believed that Israel was merely a
western imperialist outpost, but went through the Israeli Communist Party as a
means of improving alliances and relations.
In June 1954, China, India and Burma jointly proposed the Five Principles for
Peaceful Coexistence. Namely, mutual respect for sovereignty and territorial
integrity, mutual non-aggression, mutual non-interference, equality and mutual
benefit, and peaceful coexistence. Since then, China has always adhered to these
principles which have served as a basis for contemporary international relations.
72
In April 1955, the Asian-African Conference in Bandung, Indonesia hosted 29

participating countries, 18 of which had not yet recognised New China. In this
meeting, China included the Palestinian problem in its international agenda, and
deemed it to be a turning point for the world. The majority of attendees at the
conference were from Arab and Islamic states, and China attached great importance
to improving and developing relations with them. The Chinese State Councils Zhou
Enlai was often Chinas representative. He would often meet with leaders such as
the Egyptian President, Gamal Abdel Nasser, and later with Ahmad al-Shukeiri who
was the first chairman to be allowed to represent the Palestine Liberation
Organisation (PLO) and part of the Syrian delegation to the United Nations. Zhou
Enlai understood in detail Palestines history and situation, and expressed that the
Chinese government and people were sympathetic and supportive of the Palestinian
people. His stance was opposed by the conservative position taken by Indias Prime
Minister Jawaharlal Nehru, resulting in China winning favour with the Arab
people. The Bandung Conference promoted the rise of non-aligned movement, so
that Asian and African countries might avoid entering into the Cold War. At the
same time, the Bandung Conference opened China up to new relations, and vast
prospects. Although the conference was short, Egypt and China signed a bilateral
trade agreement, the first established diplomatic relation in the PRCs leadership.
This was followed by Syria and Yemen in the same year. Along with the establishment
and development of relations between New China and Arab countries, China
supported the Arabs in the second 1956 Arab-Israel war.
Prior to the Cultural Revolution, Chinas leadership adopted relatively closed
foreign policies so as not to give other countries an opportunity to interfere in
Chinas domestic politics. Chinas dissatisfaction with the Soviet Unions Big Power
Chauvinism from the late 1950s led to a divergence in terms of ideology and
political decision making. Following the outburst of the Cultural Revolution, SinoSoviet contradictions became intensified further, leading the Soviet Union to change
its position on the Taiwan issue as well as a territorial border conflict in 1969.
In 1974, Mao Zedong proposed the Three Worlds theory in which the US and
Soviet Union were the first world; Europe, Japan, and Canada the second; and
China along with a number of other countries made the third. It appears that Mao
Zedong considered China to be a developing country, and that the Soviet Union had
forsaken its socialist principles so as to fight the US for world supremacy. China
wanted to draw a clear distinction between themselves and these hegemonic and
imperialist countries. He passed comment on the Soviet Unions false pride and the
fact it sold weaponry for huge profits, thus disregarding the peoples liberation
which was no different from US imperialism.
The Mao Zedong era of foreign policy carried a lot of ideological colour, and the
Three Worlds inclusion of imperialism and class struggle of the proletarian
revolution became its foundation. Mao Zedong established proletarian politics, and
the party throughout its history had policies and strategies directed at the bourgeois.
They believed in the proletariats struggle across the world, and that they could at
any point unite to become a progressive force, fight for centralised power and
isolate stubborn influences.
China acting as a possible example for Arabs
73
To be Chinas ally, it is necessary to share the principle that national interest is

higher than everything in accordance with the Chinese Communist Party. The third
world was anti-hegemonic, imperialist, and colonialist, thus naturally becoming
Chinas allied forces. China believed at this time that Asia, Africa, and Latin
America had not yet completely realised political and economic independence in
spite of having been liberated, as they had all at some point had to deal with
hegemonic and imperialist forces. Therefore, China along with Asian, African and
Latin American countries of the third world needed to fight the waves of hegemony
and imperialism in order to live and liberate their nations.
Although China itself was seen as a poor and underdeveloped third world
country, it has yet been a dominant force. It is financially generous to its allies and
provides a great deal of aid, interest free or low interest loans, and was a strong
competitor to the Soviet Union. In 1967, Egypt was defeated by Israel in the third
Arab-Israel conflict, and suffered great losses. China provided Egypt with a great
deal of aid, second only to Pakistan. Although the scale of aid given to the Arab
states by the Soviet Union exceeded that of China, the number of countries involved
exceeded the Soviet Union and included Sudan, Tunisia, and Yemen. Between 1970
and 1972, the scale of aid given to African Arab states exceeded that of the Soviet
Union. This naturally attracted criticism from the Soviet Union and their followers
in the Arab World who believed Chinas aid to be politically motivated. Sino-Soviet
divergences resulted in divisions among the communist parties of some third world
countries, and the formation of a number of new communist parties.
From 1956 to 1973, China donated $3.38 billion in aid to third world countries,
among which the largest proportion was given as interest-free credit. The Arab
states who received these interest free loans were Egypt with $94 million, Syria with
$99.4 million South Yemen with $72.8 million, North Yemen with $71.2 million,
Iraq with $36 million, Algeria with $99.9 million, Mauritania with $27.5 million,
Sudan with $75 million and Tunisia with $36 million.
Adjustments to Chinas Foreign Policy

Deng Xiaoping hoped that Chinas foreign policies were enough to serve the nations
huge undertaking to develop and revive. He terminated Mao Zedongs left leaning
policy, class struggle as the central task, and replaced it with mutually beneficial
foreign policies. As a developing country, China announced that it would always
abide by the Five Principles of Peaceful Coexistence.
Following reform and opening up, China put aside its ideological divergences
with neighbouring and western countries in favour of developing a foundation for
long-term economic and trade relations, among which were the old enemies of
Japan and India. China also put aside the USs support of Taiwan and its ideological
conflicts. However, this wasnt enough to satisfy and convince the US to improve
their overall relations, and strengthen economic cooperation with China. However,
74
tensions between China and the USs formidable rival, the Soviet Union, afforded
opportunity for China and the US to improve relations. China and the US boycotted
the Soviet Union, and expanded dialogue with each other. China strived to forge
feasible cooperation, and the US allowed companies to invest in Chinas market.
Along with this injection of US investment, American enterprises reaped great
benefits from Chinas cheap labour force, and continually expanded its market.
China also worked hard to develop peaceful diplomatic relations with the west
and various other countries around the world, and always adhered to the principles
of peaceful coexistence. They avoided interfering with domestic affairs of other
countries, or involvement in international conflicts, accelerating economic and trade
cooperation. During this period, relations between China and Israel gradually
improved, and China brought in western advanced military technology through
them. The Jewish lobby in the US and Europe jointly involved itself in China
national interests, thus expediting Jewish capital into the Chinese market.
Following reform and opening up, China-US relations continued to advance.
Formal diplomatic relations were established on 1st January 1979 after many years
of both secretive and public bilateral relations. In July 1971, the US Secretary of
State Henry Kissinger secretly visited China to negotiate the then US President
Richard Nixons (19691974) military withdrawal from East Asia. Relations were
improved by the US agreeing to recognise the Peoples Republic of China as Chinas
sole legitimate government, and Taiwan as an indivisible part of China. As ChinaUS relations became milder, President Nixon made an official visit to China in
1972.
Prior to October 1971, the 26th United Nations General Assembly passed
resolution 2758 which recovered Chinas legitimate rights and immediately expelled
the Kuomintang representative. In 1980, the United States Congress approved a
China-US trade agreement, and recognised the country as a Most Favoured Nation
(MFN).
China had two objectives opening up to the west. Firstly, that investment would
develop the Chinese economy, and western advanced technology could drive
Chinas industrial development. Secondly, by opening up Chinas market and
exporting commodities, balanced trade could contribute the capital necessary for
economic development. For this reason, Chinas continuous development of
diplomatic relations accelerated economic growth. In the early 21st century, Chinas
gross exports had reached 20% of its GDP which highlights Chinas reliance on
global markets, but also how it maintained necessary peaceful and stable relations
with various countries. Of course, the western worlds willingness to cooperate with
China stemmed not only from confrontation with the Soviet Union, but also from
the firm belief that Chinas economic reforms would be of great benefit to developing
their own economies.
So as to attract even more foreign investment, China made efforts to improve its
legal environment. In 1978 following reform and opening up, new laws were
introduced related to foreign capital management which allowed the establishment
of foreign funded enterprises and Sino-foreign joint ventures. In the early 1980s a
75
series of laws regarding intellectual property and trademarks, as well as reduced

taxes and customs duties were introduced.
Chinas economic relations with Western countries including the US, further
confirmed the effectiveness of Chinas leadership with regards to foreign policy. In
June 1989, the Tiananmen Square Protest, or June Fourth Incident led to tense
relations between China and the west, as the incident was used to exert pressure on
China by terminating investment, imposing restrictions on the import of advanced
military weapons and high-tech products, as well as attempts to destroy the
communist system led by the Soviet Union. From 1990, the US Congress started to
use the issue of human rights as an excuse for obstructing and prolonging Chinas
MFN status.
Pragmatic Diplomatic Policy

In the early 1990s, China adjusted its diplomatic strategy towards the west, and
pragmatically opened up a little more. It expanded relations with a number of East
Asian countries and regions including Japan, South Korea, Malaysia, and Chinas
Taiwan. They also expanded to European counties such as France and Germany
with whom they enjoyed dynamic relations, and who also happened to use advanced
technology.
The collapse of the Soviet Union in 1991 forced China to face political and
security pressures. The collapse of the Soviet Union was mainly due to its closed
economy, and the expensive arms race with the west. From another perspective, it
also revealed that Chinas implementation of an open door policy was correct. Of
course, the USs unipolar world structure meant that China needed to promote
peaceful foreign policies so as to weaken US impact on their neighbours, and
prevent the formation of a strategic alliance with Chinas Taiwan, or Japan.
Chinas approach to opening up to the economies of Asian countries proved to
be successful, which was underpinned by the timely resolution of disputes especially
those relating to borders. In the early 1990s, China established the Shanghai Five
mechanism which was applied to resolving border disputes with former Soviet
republics. The organisation developed into the Shanghai Cooperation Organisation
(SCO) in 2001, and its function was to further its wealth and expansion. From
1991, China strengthened its relations with ASEAN (Association of Southeast Asian
Nations), and by stages deepened political and economic relations with members
Malaysia, Indonesia, Singapore, the Philippines, Brunei, Thailand, Burma, Vietnam,
Laos, and Cambodia. It is worth noting that when ASEAN was initially established
in 1967, its main intention was to stand up to Chinas influence in East Asia. In
2012, the value of trade between China and ASEANs ten nations exceeded $400
billion. China abandoned its grudges to take the initiative with other Asian countries
to establish relationships, especially with Japan and South Korea in which there
were historical resentments, to form of ASEANs 10+3 cooperative mechanism. In
76
the 1990s, trade between China and South Korea enjoyed annual increases of 20%,
which topped $250 billion in 2012. Although there are still territorial disputes
between China and Japan, their bilateral trade still reached $329.4 billion in the
same year. China has already become Japans, and now South Koreas number one
trading partner.
With regards to international affairs, China has worked hard to strengthen its
economic and trade relations with the US and other Western European countries so
as to attract investment and introduce technology. Between 1985 and 2000,
Germany invested $24.1 million which leapt to $1.04 billion, and China has also
been active in bringing in their advanced technology. For example, Germanys
Volkswagen Car Company set up in Shanghai with a factory in Changchun, and
produced a number of Volkswagen branded car models. Siemens has also established
a number of production projects including over fifty telecommunications systems in
China, wireless telephones, mobile phones as well as equipment for power stations.
BASF, Bayer, Henkel, Hess Special Grade Chemistry and pharmaceutical companies
have also entered into Chinas market. China and the European Union have
cooperated directly, resulting in rapid development of bilateral trade and investment.
By the end of the 20th century, the European Union had already become Chinas
third largest source of foreign investment.
During this phase, China expressed concerns about the US leading a unipolar
world structure, and has expressed its long term-aspiration to establish a more
multi-polarised order. In 2002, Jiang Zemin reported at the Sixteenth National
Congress how China had established itself as a new international political and
economic order for the 21st century. Countries tend to respond politically to mutual
respect and consultation, rather than having views imposed from outside.
Economically, mutual promotion and development as opposed to creating extreme
disparities between rich and poor. Culturally, referencing each other for a common
prosperity rather than a rejection of other cultures. In terms of security, mutual trust
and common safeguarding are beneficial. A collaborative approach to security,
dialogue and cooperation can resolve disputes, rather than resort to force and
militarily threat.
With the collapse of the Soviet Union and end of the Cold War, the US constantly
criticised China over human rights issues so as to exert pressure on the Chinese
government. Even so, China-US cooperation has never drawn to a halt and the US,
as before, recognises Chinas importance. China-US economic and trade relations
extended in terms of development. In 2003, bilateral trade totalled $126.3 billion,
amounting to 14.8% of Chinas foreign trade, and 8.3% of the USs. From 1974 to
2003, Chinas exports to the US went from $1.23 billion to $124.9 billion. During
this period, imports amounted to $0.807 billion rising to $44.68 billion. This rapid
development continued as bilateral trade had reached $211.6 billion in 2005, broke
through to $300 billion in 2007, and exceeded $380 billion in 2010.
Although China-US political relations had their ups and downs due to US
changes of administration, they never ceased. During President Bush. Srs time in
office (19891992), relations were tense as economic sanctions, suspended high
77
level official visits and military exchanges were implemented against China
following the June Fourth Incident. There were also attempts to forbid international
organisations from providing credit and aid to China. As China expanded
communication with European and Asian countries, the US removed military
sanctions and various other bans.
During the early stage of the Clinton Administration (19932000), former
leader of Chinas Taiwan Lee Tenghui made an official visit to the US in May 1995,
the first visit following the establishment of Sino-US diplomatic relations. This
caused extreme tension, but the Clinton Administration soon realised that there was
no sense in confronting China and compromising diplomatic relations and economic
development, and so made efforts to repair the situation. With improvements to
Sino-US relations, Chinas State President Jiang Zemin made an official visit to the
US in October 1997. Clinton publicly supported the Three Nos policy with
regards to Taiwan, in that it didnt support Taiwanese independence; support the
notion of two Chinas or One China, and One Taiwan, or Taiwans admission
under any circumstances into international organisations as a sovereign state. The
following year, President Clinton made an official visit to China.
In 2000, the US Congress consented to giving China permanent status as a
normal trading partner. However, when President Bush, Jr. came to power, relations
took a step backwards as China was deemed a strategic competitor. It began to
support Taiwan by selling them arms, and warned China that they had developed
guided missiles and innovative weaponry. Relations entered into a hopeless
situation. In 2001 following 9/11, China supported the US fight against terrorism,
and appealed to the United Nations to play a role as well as providing the US with
intelligence. At the end of 2002, the United Nations Security Council took a vote
on a new draft resolution about Iraq submitted by the US, and all members
including China voted in support. The following year, the US overturned Iraqs
Saddam Hussain regime.
During Hu Jintaos era, China formulated the Peaceful Development Strategy,
which was deemed a necessary path for Chinas modern construction. In December
2005, the Chinese State Councils Information Office published a White Paper, and
proposed that peace be the foundation for development, that development be the
principle of peace, and that Chinas development required a peaceful international
environment. The White Paper presented vast, full and accurate data which
demonstrated that a peaceful international environment brought achievements. It
also reiterated that China would take a peaceful road to development, would not
threaten any country or instigate war, would take a peaceful approach to resolving
disputes with neighbouring countries, and in line with the global economy pursue
interdependent relations with other countries.
The Chinese government stressed that China is not a threat to the world, will not
seek hegemony, and certainly will not scramble for supremacy with the US. Of
course, China in the meantime persisted with this peaceful development strategy
whilst also attaching importance to all aspects of a defence strategy framework by
strengthening national defence and modernising the army.
78
The Positive Achievements of the Reform and Opening-up Policy

Since reform and opening-up, Chinas economy has achieved a great deal. In the
1980s, Chinas foreign policies were significantly adjusted. They pragmatically
encompassed political, economic, and cultural aspects which were reinforced by
friendly and cooperative relations, especially in attracting foreign investment and
technology. Combined with its independent peaceful foreign policies, opening up to
the outside world, maintaining economic lifelines with relevant countries, and
seizing control of state-owned large enterprises has driven Chinas constant
economic development. This is the foundation of China foreign policy, and also the
key to establishing tight cooperative relations with various countries. Of course, by
undergoing the process of civilizational repositioning, we also hope to guarantee
such a contribution.
The following data can be used to explain the achievements which have followed
the implementation of reform and opening-up.
1. Foreign Capital
Following the implementation of the Reform and Opening-up Policy, the majority
of foreign capital was firstly poured into the eastern and southern coastal regions
of Guangdong, Fujian, Jiangsu, Zhejiang, and Shanghai. Later, the north and
central provinces were included. This foreign capital was mainly focused around
labour-intensive industries such as clothing and accessories, textiles, electrical
equipment, electrical products, and food as well cars, energy, tourism, transportation,
and communication industries oriented towards the domestic market. In 2010,
China attracted Foreign Direct Investment (FDI) in excess of $100 billion which
accounted for nearly 10% of the worlds total.
Chart 4: FDI into China (Unit: $100 million)
Year
FDI
1991
43.66
1992
110.08
1993
275.15
1994
337.67
1995
375.21
1996
417.26
1997
452.57
2002
527.43
2003
523.05
2004
606.30
2005
603.25
2006
630.21
2007
747.68
2008
923.95
2009
900.33
2010
1088.21
2011
1160.11
2012
1117.2
79
2. Economic Development
In 1978, Chinas GDP stood at a mere 364.5 billion RMB, but increased twenty fold
following twenty years of development to 7.8 trillion RMB by 1997. Prior to reform
and opening-up, the domestic economic growth rate stood at 6.1%, but rigorous
development from 1980 to 1988 resulting in annual average growth rates of 11.4%
far exceeded global figures of 3%. In the following ten years, Chinas GDP trebled
and reached 26.7 trillion RMB by 2007. At present, China has already surpassed
Japan to become the worlds second largest economy. What needs to be noted is that
owing to Chinas enormous population, incomes for the majority of people are
unable to rise at the same rate as the economy grows, and this is especially the case
for rural residents. According to statistics, in 2010 Chinas urban residents had a
disposable income of 19,109 RBM, and the per capita income of rural residents is
less than a third of urban residents at 5,919 RMB. The following chart shows
Chinas economic growth rate from the late 1980s.
Chart 5: Chinas Economic Growth Rate (%)
Year
Annual Growth Rate (%)
1988
11.3
1989
4.1
1990
3.8
1991
9.2
1992
14.2
1993
13.5
1994
12.6
1995
10.5
1996
9.6
80
1997
8.8
1998
7.8
2002
8.3
2003
9.5
2006
10.7
2007
11.4
2008
9.64
2009
9.21
2010
10.45
2011
9.3
2012
7.8
3. Controlling Inflation
With economic development, living standards also continued to rise and consumer
demand kept growing. This naturally brought with it the risk of inflation. During
the first half of the 1990s, Chinas rate of inflation kept rising and reached a record
high of 24.1% by 1994. Chinas Central Government accordingly adopted a series
of measures to strengthen its macro-control, and succeeded in stabilising growth
within a short period of time thus controlling inflation to within a reasonable range.
From the 21st century, Chinas inflation rate along with a new round of growth
emerged, although far below the levels of the 1990s. However, in April 2008 and
July 2011, it had reached 8.5% and 6.5% respectively. In response, the Chinese
government strived to adjust inflation, paid particular attention to the prices of
consumer goods and any other potential problems. The following chart shows
Chinas rate of inflation in the 1990s:
Chart 6: Chinas Rate of inflation in the 1990s

Year
Rate of Inflation (%)
1991
3.4
1992
6.4
1993
14.7
1994
24.1
1995
17.1
1996
8.3
1997
2.8
1998
0.8
1999
0.4
81
4. Economic Structural Optimization

China started out as a poor agrarian country and developed into an important
industrial centre due to reform and opening-up. Economic structures have
undergone significant changes which are mainly reflected in industrial and service
industries. It is worth emphasising that although agriculture decreased proportionally,
its overall size actually grew substantially. Grain output increased steadily, securing
the food market as the trend towards urbanisation continued in pace with
sustainable economic development. Even non-staple food products such as meat, sea
food, and fruit experienced rapid growth. Chinas agricultural production structures
had already improved compared with prior to the policy. Foreign trade structures
for Chinas agricultural products also underwent some fundamental changes as the
export of various preliminary agricultural products reduced in share, and were
replaced with various value-added products. Of course, improved agricultural
structures and increased productivity also brought with it some negative effects.
Large numbers of rural residents moved to cities in search of employment, and this
led to city suburbs being full of migrant worker groups from poorer areas.
Chinas economic structural changes are as follows.
Chart 7 : 1975 2000 Chinas Economic Structural Changes
1975
1980
1985
1990
1995
2000
Agriculture
32.4
Manufacturing
45.7
Service Industries 21.9
Labour Force Agriculture
81
Distribution
Manufacturing
10
(%)
Service Industries
9
Agriculture
Types of Crop
82
Production
Animal Husbandry
14
Structure (%) Fishing Industry
2
Forestry
2
Agricultural Population Ratio (%)
83
30
49
21
69
18
13
76
18
2
4
81
28
43
29
62
21
17
69
23
3
5
76
27
42
31
60
21
19
65
26
5
4
74
21
49
30
52
23
25
58
30
9
3
71
16
51
33
50
22.5
27.5
56
30
10
4
64
GDP (%) of
Total
What is worth emphasising is that annual foreign capital increases to Chinas

manufacturing enterprises contributed to Chinas total industrial output value,
increasing from 0.9% in 1988, to 5.4% in 1991, and again to 10.2% in 1993. The
share of state-owned enterprises as a proportion of total industrial production
correspondingly decreased from 64.9% in 1988 to 47% in 1993. Of course, stateowned enterprises occupied a smaller proportion due to a number of factors which
emerged in the 1990s. The Chinese government strengthened economic sovereignty
by encouraging and supporting the development of large-scale privately owned
industrial enterprise, which went on to enjoy a favourable position in the economy.
82
5. Importing Technology
One of the key aims to successfully opening up to the outside world was attracting
foreign investment, and advanced technology. In the early stages, it was only the
service sector that managed to attract foreign advanced technology, far from enough
to satisfy the great ambitions of Chinas complete development. The government
provided various preferential policies for large foreign and multi-national companies
so as to attract them and their advanced technology to China. They also encouraged
them to produce for the domestic market rather than for export. These stimuli
enabled China to fully utilise advanced technology from overseas to establish a
number of large-scale industrial programs related to cars, airplanes, electronics,
communications, computers, and exploration.
Meanwhile, Chinas traditional exports such as textiles, food products, and light
industry also used these new advanced technologies so as to improve technologically.
However, what is worth mentioning is that although China successfully attracted a
lot of advanced technology, many foreign-owned enterprises brought technology
that was obsolete in their own countries to China. For a long time, high-tech and
high-quality products made in China had a resulting stigma. As the degree of
opening up to the outside world extended, China gradually absorbed and developed
its relations with foreign-owned enterprises so as to obtain access to technology, and
improved its own technology level by creating more opportunities for economic
development.
Foreign investment has not only granted access to advanced foreign technology,
but also provided China with the opportunity to learn advanced management
techniques. However, although there was an opportunity to grasp advanced
electronic and chemical engineering, many of these foreign-owned enterprises were
in no hurry to provide technical training to Chinese personnel, and imparted little
in terms of management experience. Consequently, improving Chinese management
standards and increasing productivity remains crucial.
Prior to the reform and opening-up, China placed emphasis on developing heavy
industry, but this was changed in favour of light industry so as to attract foreign
investment. From the start of these reforms until the mid-1990s, light industry as
part of total industrial output rose considerably, but the development of the hightech industry was relatively slow.
China changed its approach and strengthened its relations with western countries,
especially technological leaders Germany and France, that introduced a host of
advanced technologies related to car and airplane manufacturing, and
communications. Cooperation with car manufacturing giants such as Volkswagen
from Germany and Citroen from France enabled China to raise the quality of its
manufacturing within a short period of time. By 2011, China had produced 18.4
million cars, among which 840,000 finished vehicles were exported to over one
hundred countries. In 1990, China had only produced 510,000 cars.
The Chinese government provided a number of supportive policies to help
develop the automobile industry. Colleges, universities and scientific research
83
institutions also collaborated with German and French enterprises to produce key
technologies, especially in accelerating research and development which resulted in
Chinas car manufacturers providing powerful technical assistance.
In short, China and western European countries have enjoyed extremely effective
cooperation in technical fields. The Chinese Prime Minister Zhu Rongji paid an
official visit to Germany in 2000, and said Germanys investment in China won
success by its quality rather than quantity.
The Chinese government have introduced a series of laws and regulations
directed at opening certain fields, as they required foreign owned enterprises to
collaborate with Chinese enterprises in order to enter into specific markets and
further expedite the introduction of modern technology. In addition, the government
still encouraged domestic enterprises, especially those in high-tech fields to merge,
reorganize and establish large enterprise groups. This was supported by favorable
policies which helped boost revenues and credit, so as to protect its products and
services in the domestic market. In early 2007, the government decided to implement
a single tax rate of 25% for foreign owned and domestic enterprises, thus alleviating
pressure on domestic enterprises. Previously, foreign-owned enterprises enjoyed a
preferential tax rate of 15% with domestic enterprises paying 33%.
The government have always strived to attract the US and other Western
countries to use advanced technology and invest. In the first decade of the 21st
century, China had become one of the words biggest producers of computers,
mobile phones, and electronic equipment. They benefited greatly from large
multinational companies who invested heavily, such as Microsoft and Nokia.
6. Employment
The Chinese population is larger than the labour force. Foreign-owned enterprises
have created many employment opportunities making a huge contribution to
reducing unemployment. In 1991, foreign owned enterprises employed 5 million
people, which increased to 10 million in 1993 and 16 million in 1996. A total of 19
million by 1997 amounting to around 3% of the total labour force, with the
garment industry occupying the largest proportion. Looking at Chinas overall
employment situation, the contribution of foreign owned enterprises alone was not
enough to resolve imbalanced unemployment issues. They were mainly concentrated
in south-eastern coastal regions like Guangdong and Fujian province, and so there
unemployment rates were lower. However, central and western regions, especially
rural areas, with relatively little investment, had high unemployment.
The government took measures to encourage large domestic enterprises to
expand from wealthy provinces into central and western regions and rural areas,
and foreign-owned enterprises were offered tax incentives to move into these
regions. Even so, employment continued to be the biggest problem facing the
Chinese economy. According to official statistics, the labour force grew by 20
84
million a year with only 12 million new employment opportunities created.

Productivity increased with the use of more advanced technologies, and enterprises
generally needed less labour. Some enterprises, especially large state-owned
companies, collapsed, further reducing the number of available jobs. In 2011, China
released official figures stating that the unemployment-rate in towns and cities was
4.1%, however unofficial statistics place surplus rural labour at more than 20%.
The following chart shows Chinas official registered unemployment rate for
towns and cities.
Chart 8: Registered Unemployment Rate for Towns and Cities
Year
Unemployment Rate (%)
1999
3.1
2000
3.1
2001
3.6
2002
4.0
2004
4.3
2005
4.2
2007
4.0
2011
4.1
2012
4.1
7. Balance of Trade
The reform and opening-up policy had an obvious impact on foreign trade. Before
1978, Chinas twelve state-owned trading companies had monopolized foreign
trade, but restrictions to foreign trade were relaxed following the reforms, with
both private and foreign-owned enterprises playing a significant role. The rapid rise
of foreign trade led to Chinese products being sold on the global market, and to
exports becoming the backbone of the Chinese economy.
The Chinese export market developed quickly, and amounted to $9.75 billion in
1978 which increased to $47.52 billion in 1988, $183.71 billion in 1998, $1.42
trillion in 2008, and over $2 trillion in 2012 making China the worlds largest
exporter, with Chinese products reaching every corner of the world. Within this
context, foreign exports have been instrumental to Chinas development. Between
1980 and 1993, exports from foreign owned enterprises increased by 51%. In 1980,
they only occupied 0.05% of total exports, which increased to 27.5% by 1993.
Foreign-owned enterprises related to industries and fields specific to garments,
electrical products and machinery experienced a breakthrough. In 1993 for instance,
85
50% of exported televisions, 60% of sports goods, and 53% of industrial machinery
were produced by foreign owned enterprises. However, it is worth mentioning that
although these exported products have been included in Chinas total export
figures, in reality some raw materials, equipment and technology required for these
products have been imported by foreign owned enterprises, thus creating a trade
deficit. From the mid-1990s, China adopted a series of measures supporting the
development of private enterprise, among which was an important measure to
reduce the RMB exchange rate so as to improve the competitiveness of domestic
enterprises on the global market, and thus create a trade surplus.
These policies were extremely effective, and the trade surplus continued to
improve year on year. In 1993, Chinas trade deficit of $12.2 billion was transformed
into a surplus of $24.1 billion in 2000, and $231.1 billion in 2012. As Chinas trade
surplus increased, the countrys foreign exchange reserve was also increased. In
2006, China already had the worlds largest foreign exchange reserve which reached
$3.31 trillion. Through the following chart, we can understand how Chinas trade
surplus dramatically increased prior to 2000.
Chart 9: 19752000 Chinas Foreign Trade Figures (Unit: $100 million)
Year
Trade
Total
Export
Total
Import
Total
Balance of
Trade
1975
148
73
75
-2
1978
206
97
109
-12
1980
381
181
200
-19
1985
697
274
423
-149
1986
738
309
429
-120
1987
827
395
432
-37
1988
1028
475
553
-78
1989
1116
525
591
-66
1990
1155
621
534
87
1991
1356
718
638
80
1992
1655
849
806
43
1993
1957
917
1040
-123
1994
2366
1210
1156
54
1995
2809
1488
1321
167
1996
2899
1511
1388
123
1997
3252
1828
1424
404
1998
3240
1838
1402
436
1999
3606
1949
1657
292
2000
4743
2492
2251
241
86
Civilisational Repositioning on Chinas Terms

Based on the aforementioned content, we can see that economic and trade
cooperation with various countries across the world is the key to establishing tight
relations. Developing foreign relations rather than applying dogmatic principles
should be the main starting point for developing foreign relations.
In 2005, Chinas State Council released the White Paper, Chinas Road to
Peaceful Development. From this White Paper, we can see that China already knew
that by strengthening cooperation as a global economic entity rather than being
confrontational was enough to realise and maintain state interests. Sino-US relations
were among the core issues. The US is still the worlds sole superpower, but China
will possibly overtake it to become the worlds largest economic entity by 2020.
Managing Sino-US relations is extremely important if China is to realise a revival
on its own terms, and establish a harmonious world.
Relations between the US and China in terms of the economy involve extensive
common interests, and can be used bilaterally. The US is Chinas main source of
foreign trade and investment, so the economy will inevitably suffer a massive impact
should trade to the US be held back, or investment die off. According to the US,
China is a significant strategic location in which there is an excellent rate of return.
The US imports products from Chinas labour intensive industries which they do not
produce themselves; therefore importing Chinese products cannot impact on the US
economy. Of course, it cannot be disregarded that along with Chinas rapid growth
as a national power, Sino-US competition in the Asia-Pacific region has become a
fierce political issue, with the possibly of this extending to military fields.
China and the US have a dialectical relationship, being both partners and
opponents. Such a relationship could bring about conflict, although the possibilities
are extremely limited. They could not possibly enter into a Cold War situation, or
a large-scale violent conflict like the World Wars. It is undeniable that in the future,
regardless of whether partnerships or conflicts emerge, China will continue to grow
which will enable it to enjoy an international position equal to that of the US.
In view of Chinas foreign relations, (including those in development with the
US), there are two different paths to be aware of when undergoing civilizational
repositioning:
Firstly, the importance of supporting Chinas economic development, especially with
oil supply. As Chinas economy develops, their need for oil is going to increase. In 2004,
China surpassed Japan to become the worlds second largest consumer of oil following
the US. In 2011, global consumption amounted to around 4.06 billion metric tonnes
of which the US consumed 833 million, followed by China with 461 million, and Japan
with 201 million. Thus, Chinas oil reserves and productivity cannot satisfy its growing
demand for natural resources. Their consumption is growing annually at a rate of 7%
compared with its annual production increase of 2%.Therefore, China must import
large quantities of oil to ensure their economic development. In 2011, China imported
56.5% of its petroleum. So as to safeguard energy security, China must play close
attention to strengthening their relations with developing oil producing countries.
87
Their oil enterprises should use advanced technology for potential domestic drilling,
but also formulate policies for the future which will increase overseas investment in the
oil industry, especially in the Middle East and Africa.
In addition to oil, China also needs to further attract investment and advanced
technology so as to ensure its stable economic development. In the thirty years
following the open door reforms, foreign investment has enabled China to make the
transition from quantity to quality. In 2007, Chinas State Council issued the
Catalogue of Industries for Guiding Foreign Investment which listed the investment
they wished to encourage as well as the investment they wished to restrict or
prohibit. The catalogue stipulated that a portion of the states economic security
should be composed of strategic and sensitive industries which should be managed
in both a cautious and open manner. Clauses can be adjusted as appropriate when
planning domestic development and opening up to the outside world. Encouraging
foreign investment will enable an expansion of the manufacturing industry into new
technologies, equipment manufacturing and various other non-traditional industries.
Meanwhile, some domestic companies with strong production capacities in
traditional manufacturing industries were able to access advanced technology
without foreign investment.
Adjustments were made to the orientation of the policy to simply encourage
exports. Foreign exchange reserves increased rapidly aimed at dealing with the
oversized trade surplus, so there was no longer any need to continue to encourage
exports. Chinas scarce or important non-renewable mineral resources did not
further encourage foreign investment. Some important non-renewable raw materials
were disallowed for foreign investment for exploration and mining. China also
either limited or prohibited the admittance of foreign investment projects which
produced high material and energy consumption, or high levels of pollution. In spite
of various limitations, a large amount of foreign investment continued to flow into
China. During the first seven months of 2008, the introduction of The Foreign
Investment Industry Guidance Catalogue did not impact on Chinas ability to
attract foreign investment, which had in fact substantially increased from 2007.
Secondly, so as to meet Chinas requirements in various regions in the world,
especially in expanding political influence towards developing countries. Chinas
process of expanding political influence began with countries in which there had
already been friendly exchanges through history, among which are Arab countries.
It was then hoped that close relations could be established with China of peaceful
coexistence, and mutual understanding and support. Since the 1990s, Chinas legacy
of protective foreign policy underwent a process of change in accordance with
practical needs to actively expand political influence across the world.
Chinas neighbours in Southeast Asia had established patterns of foreign
exchange, and thus enjoyed a prominent position in Chinas diplomatic effort.
Chinas development and prosperity requires peaceful and stable surroundings, and
a commodity export market. Development with Southeast Asian countries including
Thailand, the Philippines, Bengal, Cambodia, and Laos was also conducive to
limiting Japans influence, winning over support with regards to Taiwan issue, and
88
containing the expansion of the US in the Asia-Pacific. What is worth noting is that
China also strengthened its contact with countries in which the US had tense
relations, such as the Sudan and Venezuela. These countries generally had great
potential for exporting oil and natural resources which would directly benefit
China. These measures werent aimed at opposing the US and were in fact aimed at
avoiding a clash, especially for countries and regions which are geographically far
away from China. China has developed relations with US, as well as relations with
anti-US countries, embodying the idea of comprehensive foreign relations.
Chinas regional relations with foreign countries are not focused on military and
security, and military diplomacy is generally more about reciprocal visits and
personnel training. However, Chinas militarily cooperation with these neighbouring
countries is extremely tight, especially Russia from whom China has always been
their largest buyer of arms since its independence. China and the SCOs members
have also maintained close cooperation. Although this is a regional rather than
global international organisation, it demonstrates Chinas ambitions to expand
influence. Of course, just as the White Paper Chinas Road to Peaceful Development
points out, China will not create a group alliance with any other country. One of
the main principles of the Five Principles of Peaceful Coexistence is state sovereignty,
and an adherence to peaceful development.
China has used these three fundamental measures to strengthen foreign
relations:
Economy: China provides economic aid in the form of non-reimbursable
assistance, loans, and by establishing investment projects. Statistically, the scale of
Chinas FDI has already grown from $2.7 billion in 2002 to $87.8 billion in 2012,
and is mainly focused on finance, minerals, and oil. In addition, China has signed
free trade, bilateral trade and regional trade agreements with a number of
countries.
Politics: Signing bilateral cooperative agreements and entering into regional or
global international organisations has strengthened relations and interactions with
various countries, as well as built up mutual trust.
Culture: Culture is the most dynamic path. China has offered the youth from
other countries government scholarships, and established Confucius Institutes
across the world which hold cultural festivals and art exhibitions. China also has
various international media such as China Radio International, the Xinhua News
Agency, China Central Television (CCTV), and China Today. They also provide for
foreign audiences with transmissions in multiple languages, including Arabic, so as
to narrate Chinas story. Chinas increased cultural influence can be attested for by
the numbers of foreign students in Chinas many universities, which has risen from
8000 students in the late 1980s to 320,000 in 2012.
It is clear that Chinas aim to develop foreign relations has more than satisfied
economic requirements. It therefore needs people from across the world, especially
those wishing to establish tight relations with China, to create a favourable national
image. For this reason, Chinas national interest, to protect itself, has created a
favourable atmosphere and environment, finally realising unity between countries
and becoming an important influence on the world.
3
Civilisational Repositioning Factors
for Arab People to take into
Consideration
What does the Arab World have?

Chinas main requests of the Arab World are embodied in three aspects; oil,
investment and political support.
Foreign trade: China exports a large amount of commodities to the Arab World,
but the Arab World does not offer any real advantage over other regions in the
world in this regard. In fact, there are many other countries of more strategic
importance to China, for example the US and Europe, with their larger populations
and higher standards of living, making for a stronger consumer base and market.
Oil: The Arab World accounts for 57.5% of the worlds total oil reserves. In
this regard, Saudi Arabia ranks first, Iraq third, Kuwait fourth, United Arab
Emirate fifth, and the non-Arab country or Iran second. What needs to be
emphasised, is that when compiling statistics relating to Arab oil reserves, oil sands
have not been accounted for, although their reserves are enormous. Oil sands are a
compound of bitumen, sand, high grade clay and water. On account of high
production costs and complicated extraction, it has not been included in total oil
reserves. Since the beginning of the 21st century, the development of oil extraction
refining technology has enabled oil sands to be extracted on a large scale, beneficial
to the economy. At present, Arab oil producing countries amount to 30% of the
worlds total, among which Saudi Arabia occupies 42% and the United Arab
Emirates and Kuwait around 11%. In addition to oil resources, Arab countries hold
29% of the worlds natural gas reserves.
The following chart shows the oil and natural gas reserves of Arab and other
major countries.
90
Chart 10: 20022006 Oil reserves in Arab and other major countries.
(Unit of measure is 1 billion barrels, world totals includes the total reserves of the
aforementioned as well as other unmentioned oil producing countries.
Country
Saudi Arabia
2002
2003
2004
2005
2006
262.79
262.73
264.31
264.25
264.21
Iraq
115
115
115
115
115
Kuwait
96.5
99
101.5
101.5
101.5
UAE
97.8
97.8
97.8
97.8
97.8
Libya
36
39.13
39.13
41.46
41.46
Qatar
15.21
15.21
15.21
15.21
15.21
Algeria
11.31
11.8
11.35
12.27
12.2
Oman
5.7
5.56
4.8
5.4
Sudan
0.81
0.81
0.81
0.9
Egypt
3.7
3.7
3.7
3.7
3.72
Syria
3.15
3.15
3.15
Tunisia
0.31
0.31
0.31
0.31
0.4
Bahrain
0.13
0.13
0.13
0.13
0.13
Total Reserves for

Arab Countries
652.41
658.33
661.2
664.53
668.03
Iran
130.69
133.25
132.46
136.27
136.27
77.31
77.23
79.73
80.01
80.01
Russia
60
60
60
60
60
Nigeria
34.35
35.26
35.88
36.22
36.22
US
22.68
22.7
21.89
21.37
21.76
China
18.25
18.25
18.25
18.25
16
Mexico
17.2
16.04
14.8
13.7
12.35
Brazil
8.33
8.5
10.6
11.24
11.77
Yemen
Venezuela
Norway
10.4
10.1
9.67
9.69
7.85
Angola
5.41
5.41
5.41
5.41
Canada
4.49
4.5
4.7
4.7
5.12
1124.34
1138.6
1145.14
1153.91
1160.68
58
57.8
57.8
57.6
57.6
Global Total
Reserves
Percentage of Arab
countries
91
Civilisational Repositioning Factors for Arab
Chart 11: 2002 2006 Natural gas reserves in Arab and other major countries.
(Unit of measure: 1 billion cubic metres, world totals include the total reserves of
the aforementioned and unmentioned oil producing countries.)
Country
2002
2003
2004
2005
2006
Saudi Arabia
6646
6754
6834
7153
7154
Iraq
3190
3170
3170
3170
3170
Kuwait
1557
1572
1572
1586
1570
UAE
6060
6060
6060
6060
6060
Libya
1503
1491
1491
1491
1420
Qatar
25783
25783
25783
25783
25783
Algeria
4523
4545
4545
4580
4504
Oman
886
880
856
856
856
Sudan
85
85
85
85
86
1657
1725
1870
1890
1940
Yemen
453
479
479
479
479
Syria
371
371
371
310
290
Tunisia
78
78
78
78
78
Bahrain
92
92
92
93
93
Total Reserves for

Arab Countries
52884
53085
53286
53614
53316
Iran
26690
27570
27500
27580
27592
4181
4219
4287
4315
4317
47572
47572
47572
47574
47592
Egypt
Venezuela
Russia
Nigeria
4997
5055
5229
5152
5153
US
5294
5294
5353
5452
5790
Indonesia
2557
2557
2769
2769
2770
Turkmenistan
2010
2010
2010
2011
2833
Uzbekistan
1875
1875
1875
1875
1875
Norway
3667
3188
3286
3286
2332
Kazakhstan
1841
1841
1841
1841
2833
Canada
1664
1672
1603
1603
1642
China
Global Total Reserves
Percentage of
Arab reserves
1510
2229
2200
2350
2266
176883
179262
179704
180519
181926
29.9
29.6
29.7
29.7
29.3
92
What should be mentioned is that for oil producing countries, the importance of
being able to extract the smallest amount should be worth no less than oil reserves.
For quite some time, Arab states have relied on capital from foreign enterprises for
advanced exploration and extraction technology. Since the 1970s, Arab states have
established enterprises to explore, develop, and exploit, but the main technology
has always been in the hands of large enterprises from US, Europe and Japan. Arab
oil companies cannot access such advanced technology and so have no choice but
to go through oil companies from other countries to purchase assets and technology
as a means to developing their industry. Along with the 2008 soar in oil prices
(when a barrel cost between $100$150), investment in Arab oil exporting countries
was plentiful, but many private oil companies also began to spring up; 18 in the
United Arab Emirates, 10 in Kuwait, 8 in Bahrain, 6 in Saudi Arabia, and 1 in
Qatar. These newly established privately-owned companies were engaged in the
exploration and development of oil fields and without exception used overseas
technology.
Investment: Some Arab states rely on the substantial earnings generated from oil
exports, and their governments control their increasingly enormous sovereign
wealth and scale of funds. The government systems of these various Arab countries
as well as other regions all require enormous investment. In addition, the Arab
World has a host of rich and powerful people who hold large amounts of capital
which they invest overseas. There are around 200,000 Arab investors occupied in
overseas investment of which 37% are from Saudi Arabia, 28% are from United
Arab Emirates, and 17% are from Kuwait. Although there is no detailed data
relating to overseas Arab investment, a related organisation estimates that in 2002,
total Arab foreign investment amounted to between $1 trillion and $3 trillion which
had already reached between $1.5 trillion and $4 trillion by 2007. Around 70% of
this investment has gone to the US, with residual amounts concentrated in European
countries, and a small portion to Southeast Asian countries. What needs to be
explained is given the weak technological and innovative capabilities of Arab
countries, it is clear that foreign investment in Arab countries doesnt resemble
Chinas investment into the high technology and equipment manufacturing
industries. It instead flows into securities, stocks, and real estate. Even so, official
and civil capital reserves can be used by Arab states to strengthen the enormous
potential and capability for investment in China. Even the orientation and quality
of investment can be controlled in cooperation with Chinese companies. In short,
Chinese-Arab bilateral relations can create mutually profitable conditions through
investment.
In 2011 for example, statistics from the Arab Monetary Fund (AMF) revealed
that oil accounted for 70% of their total revenue and more than 90% in some
countries.
93
Chart 12: 2011 Proportion of Fiscal Revenue generated from Arab oil exports
(Unit of measurement: $100 million)
Country
Oil Export Total Fiscal Surplus
Saudi Arabia
3000
816
Kuwait
1018
446
UAE
1116
377
Political Support: At present the Arab World is lagging behind in all fields of
civilisation, resulting in a correspondingly weak position in world politics. However,
the Arab World has taken advantage of its number of individual states and enjoys a
decisive position in international organisations, especially the United Nations. With
regards to Chinese-Arab relations, the political value of Arab people rests in the ability
for Arab countries to act as a political group, enabling them to establish tight relations
with China, and support China politically (for instance with votes in elections) during
diplomatic activities at international organisations. It should not be forgotten that if
the Arab World expects to implement civilizational repositioning, each country will
need to apply different foreign policies if they are unable to cooperate as a single
entity, as part of the League of Arab States. In addition, the impact of a country or
region in world politics often goes hand in hand with military power, thus the weak
military power of Arab countries is a significant check on its influence. In short, the
Arab World has a limited ability to support China and other countries.
In conclusion, in order to establish tight relations between China and the Arab
World, the starting point for undertaking civilisational reposition should be to
construct a unified action plan centred on economic cooperation in the field of
energy. Politically as individual states, the Arab states exert relatively little influence.
The Arab World, China and the Future

Chinas momentum of development and prospects for relations with the Arab
World are favourable. There have already made remarkable developments from
official to civil capacities in the 21st century. With growing economic strength,
Chinas impact on international society grows day by day. In spite of having
different starting points, the Arab people have responded positively. Some people
hope that Chinas strength is enough to create a world balance with the US,
currently the only superpower, which would lessen damage caused by the US,
especially with regards to Palestine. Some recognise that Chinas pragmatic
diplomacy protects national interests and avoids tensions with other major nations
so as to enable development and mutually beneficial cooperation, especially in
terms of the economy. Others believe that China and Arab countries have always
enjoyed friendly relations, and on an emotional level respect their rise to power.
Many see how the western media viciously attacks China on issues such as human
94
rights and product quality. These are detested, as Arab people believe they face
similar conditions, and thus should stand by China against Western countries.
Observing their development, the future of bilateral relations will enable further
developments in the following fields.
1. Economy, Trade, Investment and Oil
Part 1. Trade
If considered a single entity, the Arab states are Chinas seventh largest trading
partner, and China their second. In recent years, Chinese-Arab trade has developed
rapidly, amounting to $65.5 billion in 2006. The Arab States exports to China were
worth $34 billion, and Chinas exports to Arab states were worth $32 billion. By
2011, this total figure had reached $195.9 billion and rose again to $222.4 billion
by 2012. What needs to be mentioned is that the majority of imports from China
are textiles, mechanical and electrical products, whereas China mainly imports oil.
Oil has been the key factor for holding together balanced Chinese-Arab trade
relations. Although these developed rapidly in the 21st century, they pale into
insignificance when compared with Chinas total foreign trade of $3.6 trillion. Since
2002, the value of Chinese-Arab trade as a portion of Chinas total trade has
remained stable, largely a product of Chinas progressive policies in expanding
global trade, with very little contribution from the Arab side. Chinas main Arab
trading partners consist of the United Arab Emirates, Saudi Arabia, Oman, Sudan,
and Yemen, which engages in either exporting oil to China, or attracting Chinese
industry for oil exploration. Even so, Chinese-Arab economic complementarity
means that there is still a great deal of potential for cooperation in terms of trade.
Part 2. Investment
In the 21st century, Chinas investment in Arab states grew rapidly. Until 2010,
the country had invested a total of $15 billion into Arab countries, focused mainly
on light industry, construction, and oil exploration. However, by 2010 this
contrasted to a total of $68 billion foreign investment. Meanwhile, the scale of Arab
investment into China has also been minimal, amounting to a total of $2.58 billion
by 2010. Chinese-Arab mutual investment has strengthened but still retains
enormous capacity for development, as both have large amounts of capital to invest
abroad. In 2010, Chinas non-financial industry OFDI (outward foreign direct
investment) reached $60.1 billion, and over $300 billion was invested in stock.
Arab countries have invested over $1 trillion in the US and Europe. Investment
could be used as an important path for enhancing relations between Arab countries
and China.
Part 3. Oil
Chinas depleted oil reserves have resulted in increasing amounts of oil imports
from Arab countries. According to statistics, in 2010 Chinas dependence on
imported oil exceeded 55% with 240 million tonnes being imported, half of which
was from the Middle East. In recent years, Chinas energy use has maintained
95
double-digit growth rates, and it is predicted that more than 70% of its total oil will
be imported from the Middle East by 2015. In this context, China hopes that Arab
countries, Saudi Arabia and the United Arab Emirates in particular, and also other
oil producing countries such as Sudan and Yemen, will proceed with large scale oil
exploration so that political, trade and investment relations can be established.
Therefore, China could increase its FDI into oil projects in Arab states and shares
in foreign oil companies, and form joint ventures with petrochemical companies in
oil producing countries such as Kuwait. They could also use concessional loans
provided to Arab countries to engage in various infrastructure projects such as
building ports and roads. Such measures would establish close relations with Arab
countries. At present, China imports from Saudi Arabia, Angola, Iran, Oman,
Russia, Sudan Venezuela, Kazakhstan, Libya and the Congo. Only four are Arab
states. In view of the fact that Arab states have enormous oil reserves, and Chinas
requirements are increasing day by day, the prospects for cooperation in this field
are vast.
2. Politics and Culture
Arab countries have enjoyed smooth diplomatic relations with New China since
the 1955 Bandung Conference. In 1956, China initially established diplomatic
relations with Egypt, Syria and Yemen, and later with other states. In 1990 relations
were finally established with Saudi Arabia which marked the completion of
established relations with all 22 Arab states. What is worth noting is that although
in recent years, relations between China and Arab states have quickened in pace and
tightened, cooperation is driven by energy resources and trade. Compared with
Europe and the US, China-Arab relations are mainly confined to high-level and elite
interaction. For example, Chinese leaders have conducted official meetings with
Arab leaders so as to sign cooperative agreements and establish partnerships. In
addition, China and the League of Arab States came together in 2004 to establish
the China-Arab States Cooperation Forum. Although this strengthened prospects
for open interaction of various fields within political and civil levels, focus was still
placed on cooperation in terms of trade and investment. What also shouldnt be
disregarded is that within this framework, four China-Arab Friendship Conferences
and five China-Arab Relations Inter-Civilization Dialogue Seminars have been held,
in which authoritative academics from various disciplines come together to discuss
the interactions of international politics and civilisations, causing ideological
storms. However, from follow-up work, substantial achievements are still lacking.
For a long time, the elitist characteristics of Chinese-Arab relations are reflected
in the degree of cultural exchange. In recent years, education has enabled
breakthroughs in strengthening non-governmental Chinese-Arab relations, as an
increasing number of Arab students study in China. According to statistics, in 2003
only around 300 Arab students studied in China, increasing to over 1000 students
from Saudi Arabia alone in 2011. In addition, China has established a number of
Arab language departments in higher education institutions and strengthened its
reserve of talents researching the Arab World. Confucius Institutes have also opened
96
in Egypt and Tunisia to teach the masses about Chinese culture and language.
However, from the perspective of translation between Chinese and Arab languages,
and book production, Chinese-Arab cooperation has been extremely limited.
Although authorities on both sides have signed a number of publishing agreements,
very little is actually available, limiting cultural exchange to the level of the elite.
The information revolution has turned the world into a global village, but
regardless of this, China and the Arab World still regard each other as being from
a remote and unknown world. There is very little Chinese-Arab cultural exchange,
which in part is due to language, and also the fact that Western countries control
culture in the Arab World, and Arab culture has been unable to leave its mark on
other countries. This distance between the Arab World and China has led to their
people turning to western media, an extremely influential third party, as a means to
understanding each other. Chinese-Arab cooperation has strengthened in various
fields, but there is still significant room to improve cultural exchange in the future;
this will help further strengthen mutual understanding.
Why is the Arab World looking to China for Civilisational Repositioning?
The fundamental objective of civilisational repositioning is to advance ones own
society. Based on this, the Arab Worlds perspective is to aim for the overall
advancement of their civilisation rather than simply building non-economic
cooperation. China has enough to justify establishing tight relations, although at
present the Chinese-Arab centre of gravity is still economic.
Should the decision to undertake a process of civilisational repositioning be
decided by China rather than the Arab World? Chinese-Arab relations must firstly
be in Chinas interests, especially in terms of safeguarding oil supply and
guaranteeing that its products can be exported. Arab people must develop economic
relations with China, but in the context of an Arab revival set out a plan which
enables all round cooperation.
By seeking to establish a process which can bring about civilisational repositioning,
the Arab World must first be capable of seizing control of their natural resources
and independently formulating economic policies. Doing so is also essential for
managing Chinese-Arab relations in the future. As described in the first part of this
book, should a country wish to seek out a path of development without dependence,
these two points are among the most enlightened that should be taken into account.
Efficient development and the creation of an advanced civilisation is a two-sided
coin. One serves as the underlay, and allows the other to become possible.
On this basis, the Arab Worlds civilisational repositioning must also benefit
China. Should China require oil in the future, Arab people can plan out what
advanced technology they are lacking, and invite China to bring theirs which would
promote internal development, advancement, innovation, and quickly lessen the
disparity with developed countries. Arab people require technology for oil
exploration and extraction, and access to such would allow them to strengthen
sovereignty over their own natural resources. Of course, unlocking the processes of
development without dependence requires that Arab people are fundamentally
independent, and able to withstand the impact of overseas pressures. Arab people
97
need Chinas support in the international arena with regards to its political affairs,
so as to allow Arab political affairs and development processes to undergo
transformation. From succumbing to powerful imperialists harming the interests of
Arab people, to seeking support from China, the worlds energy power. This can
resolve a lot of Arab problems, and create a more just atmosphere. Doing so would
enable the Arab World to rid themselves of external pressures and kick-start their
development in a more favourable environment. Finally, an improved overall
international position would be a great leap for their civilisation.
China and Israel have a positive and cooperative relationship, so Chinas support
of Arab affairs may seem like a contradiction given that Israel plays a very
complicated part in Arab problems and that Arab states are completely opposed to
its interests. The writer believes that Chinas relations with Israel are strategic and
have been established for direct benefit. Israel officially recognised the Peoples
Republic of China on 9th January 1950 before other Arab states. However, China
was slow to establish diplomatic relations. Following the 1955 Bandung Conference
in Indonesia, China made large adjustments to its Middle Eastern policy, especially
with regards to the ArabIsraeli conflict. China sided with Arab states, reflected in
a cooling of ChinaIsraeli relations. From the late 1970s, and after China reform
and opening-up, China-Israel relations improved but were largely focused on
military fields as China wanted to obtain advanced western military technology.
Although Chinas military cooperation with Israel was smooth until the Madrid
Peace Conference, aimed at resolving the Arab-Israeli conflict, opened in October
1991, China quickly established formal diplomatic relations in January 1992.
Following their establishment, China and Israels military cooperation continued to
develop, and expanded into economic, trade, culture, and science. At this time, the
US put constant pressure on Israel to stop providing military technology to China,
which they eventually did in 2005 following an agreement to jointly respond to
challenges in global security.
In short, China-Israel relations face a number of limitations:
Firstly, the US will always interfere and influence their relations, due to the USIsraeli alliance. Secondly, Chinas main reason for developing relations with Israel
was to access advanced technology, and to develop its bilateral trade and the
economy. There has however been limited strategy. Thirdly, China actively promotes
the establishment of a multi-polarised world, but Israel continues to support the US
as a hegemonic leader, thus benefiting from this contradiction in ideology. Fourthly,
and most importantly, the Arab World offers great advantages over Israel in terms
of energy resources, investment, and market size which operate without US
interference, making it of far greater strategic importance. There are deep
contradictions between the Arab World and Israel, however for Arab people, China
take precedence even if they have diplomatic relations and smooth militarily
cooperation in progress with Israel. China still has the potential to offer balance to
the Middle Easts problems by expressing support for their peoples just cause.
Chinas position should come naturally as Israel is more for a trade partner, rather
than a strategic alliance.
98
China and Arab countries exchange and cooperate in various fields, and realising
a national revival is a great dream they both share. However, looking back on the
first ten years of the 21st century, such pursuit has resulted in little, and remains a
hope for the future. Arab people are not sufficiently prepared, and the same is true
for China.
China has made tremendous achievements in development. However, China has
devoted itself to bringing in European and US industrial projects, yet those sensitive
and advanced technologies are still monopolised by Western countries. Chinas
technological achievements have not been the focus of the worlds attention, and
although it has a number of large-scale enterprises, they have yet to create a global
brand. Although Chinas economic development has been rapid and living standards
have improved markedly in recent years, the most important task China faces is the
100 million people who remain below the poverty line. China cannot yet exert its
full potential and influence in international political affairs. This could account for
why China has taken a neutral stance and abstained from voting as a permanent
member state of the United Nations Security Council on a number of sensitive
issues, even those involving national interests. Of course, this is in accordance with
Chinas pragmatic diplomatic policy to keep a low profile and bide its time, while
getting something accomplished.
China has already started working to resolve the various problems it has
encountered on its road to revival. In the fields of science and technology following
the reform period, invention and innovation was encouraged which led to the
National Patent Office being established in 1980, and the Patent Law in 1985. The
number of Chinese patents rapidly increased and exceeded 1.25 million by 2004, of
which 87% of patent holders were by Chinese, and 13% foreign. In 2007, Chinese
patents had already increased to 2.08 million, of which 17.4% were inventions,
47.3% were patents for utility models, and 35.3% were design patents. In
accordance with data from the UNs World Intellectual Property Organisation
(WIPO), China followed the US and Japan as the third largest country for patent
applications in 2007, and had surpassed Japan with 400,000 patent applications by
2012. Chinas technological deficiencies lie in the lack of invention and innovation
of general purpose technologies (GPTs). Engines and network technology for
example has already been developed extensively across the world, and are
considered to be inventions of great significance.
Civilisational repositioning with reference to China is a vision for the future,
because the conditions are not yet sufficiently mature for such a process to begin.
What is our response to Why choose China? With this question, it is important
to consider three factors.
Firstly, Arab people are not prepared. Arab people wish to implement
civilisational repositioning, but firstly wish to unite so as to realise development
without dependence, and to formulate a unified action plan for revival. Just as the
first chapter of this book explained, this vital work is yet to be done. In addition,
launching a process for civilisational repositioning requires a firm and tenacious
level of leadership with foresight. These countries must strive to take reference from
99
Chinas non-conformist development, and apply themselves to implementing an

action plan that can be changed when necessary in response to mistakes made, and
solutions found.
Secondly, Chinese-Arab friendly cooperation provides a realistic basis for Arab
countries to complete civilisational repositioning. Firstly, China and the Arab World
have enjoyed friendly exchanges throughout history, and now share common
interests in a number of political issues which can strengthen cooperation. For
example, both opposed US hegemony following the Cold War. Secondly, there is a
strong complementarity in terms of the economy and energy resources between
China and Arab countries. Both have real requirements and the development of
relations provides opportunities.
Thirdly, China is not prepared for the Arab people to engage them in civilisational
repositioning. As previously stated, on the one hand, China has not yet grasped
enough advanced technology to meet the demands of an Arab revival, on the other,
it does have enough influence in international politics. However, based on Chinas
economic data and future development plans, we can be sure that this will inevitably
change in the 21st century. In the interim period, Arab people should do their level
best, and spare no effort in doing so. To Arab people, realising civilisational
repositioning with China and an Arab revival is not going to be easy, but such a
chance should not be missed as it may only come once. If Arab people do not work
for this themselves, why would China be interested in helping them?
Epilogue
Non-conformity is the most remarkable feature of Chinas 1978 reforms, as this

policy allowed enormous changes to take place in a very short space of time. The
successful experiences of non-conformist development are something that Arab
people can learn and take reference from. If the Arab World had devised an ideology
for economic integration in the 1940s and implemented development without
dependence, then they would have been in a better position to respond to
globalisation in the 1990s and, like China, used it to bring about revival. China has
used its economic development achievements to become an important presence on
the world stage.
It is regrettable that over the past decades, Arab people have not done so.
However, following these non-conformist development experiences could help
realise development without dependence.
Arab people need to meet two conditions. Firstly, to make economic integration
happen, and secondly to strengthen control of natural resources. Otherwise, Arab
people will have no way of making use of their resources, essential for bringing
about development and a revival of the Arab World.
China has given the world experience of non-conformist development. However,
Chinas experience will not necessarily fit all developing countries, especially if their
national conditions are a long way from Chinas in terms of land area, population,
geographical location, natural resources, and degree of societal integration. It is
certain, however, that Chinas developmental experiences can be used by Arab
people as a reference point. Although the Arab World has many similarities with
China in terms of resources, it nevertheless lacks a feasible plan.
We often hear the Arab World and Europe being compared. With the
establishment of the League of Arab States, the Arab World preceded Europe in
terms of proposing economic integration. Europes process began in 1945, initially
in Belgium, France, Federal Germany, Italy, Luxembourg, and the Netherlands,
countries which signed a treaty to establish the European Coal and Steel Community
(ESCS). In 1957, the European Common Market (ECM) was established, followed
by the European Union (EU) in 1991. In spite of various disputes and divergences
between EU countries, these countries have enjoyed continuous economic growth.
Although Arab states exhibit a number of similarities, economic integration would
be conducive to realising advancements in civilisation and a common development
with consensus. However this has never been realised, a fact that is not without
102
significance. Political divergences and disparities between rich and poor are the
main issues impeding the Arab World from formulating a concrete action plan.
This book concludes that by looking at Chinas experiences of non-conformist
development, leading to civilisational civilisational repositioning, the Arab World
might develop enough to drive a revival. In the first half of the 19th century, Arab
people began seeking a path to revival. Since invasion and the abandonment of
colonialism, this path has been similar to Chinas practical approach to nonconformist development. Of course, Arab people have never abandoned the notion
of an Arab Renaissance. Truth lies in actions, however. Replacing fantasy with
practical action like China will inevitably lead to revival for Arab countries.
Rifaa al-Tahtawi was the enlightened thinker of the Arab renaissance, and his
philosophy is similar to that of Deng Xiaoping. Tahtawi witnessed Frances societal
and political development, and believed that this mode would benefit the Islamic
world and enable it to advance. It is important to note that they sought to follow
the example of European success without compromising Islamic teachings. Such
thoughts have stemmed from a national revival, and these experiences brought
about transformation which conformed to Arab national conditions and culture.
This is identical to Deng Xiaopings realistic and practical ideology. Deng Xiaoping
recognised the Wests capitalist economic achievements, kept them for reference,
and then cherry picked the parts he believed might be used for Chinas advancement.
Finally, his philosophy was moulded to fit Chinas national conditions. Regardless
of any experiences, or how ideologies transformed or reformed, the ultimate
objective always remained the same: to realise a national revival.
China has proved to the world that prioritising national interests combined with
pragmatic development planning brings about and ensures success. Arab peoples
pursuit of a road to revival has abandoned pragmatic ideologies, and has resulting
in repeated failure to develop. Arab people might well realise from Chinas
experiences that a great national revival requires recovery of their initial pragmatic
ideology. The core of such an ideology is a universal project. All must comply with
serving the high objective of a national revival without overlooking a moral code.
The Arab World longs for a revival, and China can provide the region with
experience from which to learn, and with future opportunities. If you say that since
Napoleons military force opened the door to the Arab World, western powers
(Britain, France, and the US etc.) from which stemmed exploitation which oppressed
the Arab world, then it is hoped that China will become important in the world and
will instead not behave like the west towards the Arab World, but instead stand
together, and hand in hand create a just global environment, resolving the various
problems obstructing Arab advancement.
We want to develop a positive relationship with China. Of course, this doesnt
involve flattery, as this would not be in the national interest. Close Chinese-Arab
economic cooperation could bring wealth to both sides, but high level strategic
interests alone are not enough to bring about Arab revival. We need to look instead
at civilisation as a starting point when forging positive relations, and build a
foundation which is mutually beneficial to our material and immaterial revival.
Epilogue
103
Arab people long for a brighter future, and the various opportunities China can
provide should not be overlooked. By paying attention to Chinas course from nonconformist development to civilisational repositioning, it is clear that establishing
positive relations with China is vital. It will enable the Arab World to contribute to
the realisation of the Chinese dream whilst also seizing the opportunity as early as
possible to make the Arab dream come true.
Appendix 1:
Chinas Reform and Opening
Up Policy A 30 year Chronicle
(19782008)
1.
2.
3.
4.
5.
6.
18th 22nd December 1978 11th Central Committee 3rd plenary

session of the Chinese Communist Party convened in Beijing.
The plenary session decided that the partys key tasks had been transformed
from class struggle to establishing strategic policies for socialist modernisation.
The plenary sessions considered that versatility should transform the
development of productive forces and unadaptable productive relations and
superstructures. Everything that does not adapt should be adapted in terms of
the mode of management, activity and ideology. It should be a broad and
profound revolution. Chinas reform and opening-up policy marked the
beginning of a new era.
15th July 1979 CPC Central Committee and The State Council decided to
test special administrative regions in Shenzhen, Zhuhai, Shantou and Xiamen.
13th August 1979 The State Council published Regulation regarding the
great development issues related to foreign trade and increased foreign currency
earnings.
16th May 1980 CPC Central Committee and The State Council referred to
these special areas formally as special economic zones.
1st January 1982 CPC Central Committee endorsed the China National
Agricultural Work Conference which indicated that at present the responsibility
mechanisms for agricultural practices were all products of socialist collective
economic systems, and so put an individual productive contracting system into
force.
20th October 198412th Central Committee of the Chinese Communist Party
3rd Plenary Session held in Beijing. The meeting was held in accordance with
the CPC Central Committee decisions regarding the reform of economic
systems, which stipulated the direction, nature, tasks, and guiding principles
of reforms, and provided a framework guide to economic mechanism
reforms.
106
7.
8.
9.
10.
11.
12.
13.
14.
13th March 1985 CPC Central Committee issued Decisions regarding

science and technology system reforms. The decision was taken that science
and technology on a macro scale should re-energise the economy, and that
achievements in the field should be commodified so as to exploit technology
markets. Promoting scientific and technological achievements would transform
productivity and the development of high-technology industrialisation.
5th December 1986 The State Council published the Regulations regarding
expanding enterprise reforms and strengthening dynamic enterprise. The
regulation put forward that small publicly owned enterprises could lease and
contract operations. Publicly owned large enterprises were required to
implement a number of operational responsibility mechanisms. Each region
could also choose a small number of large publicly owned enterprises to
proceed with piloting a shareholding system.
25th October 1st November 1987 Chinese Communist Party 13th National
Assembly held in Beijing. The meeting elaborated on early socialist theory, and
formulated three steps for following the centurys development strategy to
modernisation.
5th September 1988 Deng Xiaoping met with the Czechoslovakian President
Gustv Husk, and presented the celebrated thesis Science and Technology are
the primary Productive Forces.
12th 18th October 1992 The Chinese Communist Partys 14th National
Congress held in Beijing. The meeting summarised their practical experience
since the 1978 3rd Plenary Session of the 11th Party Congress, and confirmed
that the aim of economic reforms was to establish a socialist market economic
system, and introduced Deng Xiaopings construction of socialism with Chinese
characteristics to arm the party.
11th 14th November 1993 14th Central Committee of the Chinese
Communist Party 3rd Plenary Session. The plenary session passed the CPC
Central Committee decisions regarding the establishment of a socialist
market economic system. The plenary session established the socialist market
economic system which retained the states macro control with regards to the
allocation of resources. Important steps to transform the operational mechanisms
of state-owned enterprises and establish a modern enterprise system to fit
market economic requirements, which had clearly-established ownership, well
defined power and responsibilities, separated from government and scientific
management.
15th December 1993 The State Council made the Decision relating to tax
distribution and fiscal administration systems.
25th December 1993 The State Council produced the Decision of the State
Council on Reform of the Financial System. The decision proposed that that
aim of Chinas monetary system reforms should be: Under the State Councils
leadership, the Central Bank independently executes monetary policy with
macroeconomic regulations and control systems. Policies are established to
separate finance and commerce, and making the State-Owned Commercial
Appendix 1
15.
16.
17.
18.
19.
107
Bank (SOCB) the main body working alongside a number of existing financial
organisational systems. The financial market system was established to open
up as part of a unified process with orderly competition and strict
management.
11th January 1994 The State Council made the Decision to further expand
the structure of foreign trade reforms. On 1st April 1996, China substantially
reduced 4,000 types of commercial import duties, and the aggregate levels of
custom duties to 23%.
18th July 1994 The State Council put forward the, Decision to expand
reforms to the urban housing system, which clearly stipulated the basis of
urban housing reforms, among which included changing housing from a means
of welfare distribution to a monetary wage distributed according to work done
as well as the establishment of a housing accumulation fund. The most
significant process of privatization was the selling of publicly owned housing,
which urban employees were then allowed to sell on privately. On 7th August
2007, the State Council unveiled the The State Councils opinions regarding
resolutions for urban low income families in difficulty, which guaranteed that
the market could be controlled and adjusted, and for the first time clearly
stating that low-rent housing would supersede economically affordable housing
as the centre of a housing guarantee system.
25th 28th September 1995 14th Central Committee of the Chinese
Communist Party 5th Plenary Session. The plenary session passed the CPC
Central Committees proposal for the economic and social development of the
national economy in the form of the 9th Five Year Plan and a vision for 2010.
It proposed that in order to realise the 9th Five Year Plan and the vision for
2010, two fundamental changes were required. Firstly, economic structures
needed to transform from a traditional planned economy to a socialist market
economic system. Secondly, economic growth patterns had to change from an
extensive form to an intensive pattern. These two fundamental changes are
related to the overall national economy making them of great strategic
importance. They mark how Chinas economic construction is looking to
deepen their structural reforms, and improve the quality of development.
1st December 1996 China was accepted into the International Monetary
Fund (IMF), and agreed to the eight clauses that enabled the exchange of RMB
current accounts. Ahead of time, the IMF required 8th clause marked great
progress in Chinas foreign exchange management system reforms.
12th 18th September 1997 The Chinese Communist Partys Fifteenth
National Congress held in Beijing (which used a conference system) put
forward the entire Chinese Communist Partys guiding principles during the
early stages of socialism for discussion. Firstly, the construction of a socialist
economy with Chinese characteristics is in accordance with socialist conditions,
and the development of a market economy is based on the continual liberation
and development of productivity. Secondly, the construction of politics with
Chinese socialist characteristics used by the Chinese Communist Party
108
leadership will act as a foundation upon which decisions can be made for the
people, in accordance with the law and the development of socialist democracy.
Thirdly, the construction of a socialist culture with Chinese characteristics is
exactly as Marxism guided in terms of aiming to cultivate idealistic, moral,
educated, and self-disciplined citizens, and developing a modernised, global
facing, future facing, democratic, and scientific national socialist culture. This
guiding principle is an important aspect of Deng Xiaopings theory, and the
basic line for the Chinese Communist Partys economic, political and cultural
expansion. By mobilising the whole party and people of all nationalities to
unite, constructing socialism with Chinese characteristics will be extremely
significant in the 21st century.
20. 5th 15th March 1999 The ninth National Peoples Congress (NPC) second
meeting held in Beijing. The meeting passed the Peoples Republic of Chinas
constitutional amendment, and defined the non-public sector of the economy
as an extremely important part of socialist market economics, which
enormously accelerates the development of social productivity. Thirty years
since the reform and opening-up policy, the states understanding of the nonpublic sector of the economy and formulation of relevant policies have
experienced a process of exploration and improvement. In 1982, the 5th
session of the National Peoples Congress (NPC) 5th conference passed through
the constitution and made comprehensive modifications, confirming that the
lawful position of an individual economy should be complemented by a
socialist public ownership economy. In 1997, the Chinese Communist Party
15th National Congress stated that the non-public sector economy would be
incorporated into the framework of the primary stage of socialism, and that the
non-public sector economys position within the national economy should
receive unprecedented importance and affirmation.
21. 22nd March 1999 The State Council published, The State Councils ideas
regarding the further advancement of development in Western regions. Chinas
western development strategy was raised and implemented in favour of
cultivating a unified single market, improving socialist market economics
structures, driving the strategic adjustment of economic structures, promoting
regional coordinated economic development, expanding domestic demand so
as to increase the development space within economic growth and an enduring
driving force; improving overall national ecological conditions, as survival and
development of the Chinese nation will create an even better environment; in
favour of further expanding opening up to the outside world, using the two
markets at home and abroad, two types of resources, which is of great
economic, societal, and political significance.
22. 10th November 2001 The Fourth World Trade Organisation (WTO)
Ministerial Conference held in Doha. Qatar approved Chinas ascension into
the organisation, which marked the end of a 15 year endeavour, and China
finally became a full member. Membership into the WTO in the Uruguay
Round made the commitment to Chinas rights, enabling them to enjoy the
Appendix 1
23.
24.
25.
26.
109
benefits of a multilateral trade system which over the years brought

achievements in trade liberalisation and multilateral, stable, and unconditional
benefits of a most favoured nation. Although China enjoyed the right to
contribute their products to the international market, entry into the WTO
brought challenges to the Chinese government and state enterprises. The
government expedited these transitional functions, administrated according to
the law, improved the standards of enterprise technology, quickened structural
adjustment, and improved business administration which put forward new
requests.
8th 14th November 2002 Chinese Communist Party 16th National
Assembly held in Beijing. The meeting established that China had reached a
comfortable overall level in terms of food and clothing. It further proposed that
building a moderately prosperous society by the end of the 2020s should be
achieved by concentrating strength, overall construction can benefit billions of
people by improving their standards of life to that of a well-off society with an
economy that drives development, democracy can pass to soundness, science
and education can take bigger steps forward, and culture can become more
prosperous, society more harmonious, and quality of life more substantial. This
period of construction must continue on for the coming decades until the midcentury when basic modernization can be realised, and Chinas construction of
a modernised socialist country creates prosperity, democracy, and civilisation.
29th September 2003 The General secretary of the CPC Central Committee,
Hu Jintao convened the CPC Political Bureau Meeting. The meeting suggested
that supporting the prosperity of northeaster regions and old industrial bases
was the 16th National Congresss most important task for building an
all-round prosperous society. Various regions and departments were all require
that form this new century of reforms and socialist modernisation and the
height of long-term development. A profound understanding of the measures
implemented to revitalise north-eastern regions and their various old industrial
bases is of great significance. In order to further free our minds, deepen
reforms, expand openness, and exert ourselves to promote institutional
innovation and mechanism innovation, promoting the strategic adjustments of
economic structures, expediting technological transformation of enterprise,
and walking away from old industrial bases will make adjustments to
reconstruction and promotion of a new way.
31st January 2004 The State Council published Some Opinions of the State
Council on Promoting the Reform, Opening and Steady Growth of Capital
Markets which clearly pointed out that the rapid development of a capitalist
market is extremely significant to the strategic aims of doubling the national
economy by the end of 2020s.
26th August 2004 and 21st September 2004 The Bank of China Limited and
the China Construction Bank were separately established, and two solely stateowned commercial banks were entirely restructured into joint equity commercial
banks with state shareholding.
110
27. 14th March 2004 The 10th National Peoples Congress (NPC) second
meeting deliberated and passed the fourth amendments to the constitution,
The lawful private property of citizens may not be encroached upon and that
The State respect and safeguard human rights. New revisions to the
constitution accommodated the objective requirement to protect private
property, expand the scope of protection for private property, and further
perfect the private property protection system. Strengthening the protection of
private property legality for citizens favours adherence and perfection of the
basic economic system, and promoting the development of the non-stateowned economy; in favour of safeguarding civil liberties advanced in
accordance with the rule of law; in favour of transferring extensive enthusiasm
and creativity to the masses to create an all-round prosperous society.
28. 29th December 2005 The 10th Standing Committee of the National Peoples
Congress (NPC) 19th meeting passed Decision to abolish the Peoples Republic
of China regulations for the Agricultural Tax which was implemented in the
1950s and was a continuation of a two thousand year old category of taxes.
From 2004, the State Council implemented the beneficial farming policy which
either reduced or completely exempted agricultural tax.
29. 11th October 2005 The 16th National Congress of the Chinese Communist
Party 5th Plenary session passed, CPC Central Committees proposal regarding
the formulation of the national economy and social development for the 11th
Five Year Plan, which clearly stated the plan of action and objectives for the
following 5 years of economic and social development. It proposed constructing
a new socialist countryside as a major historical task, and introduced the
Three Rural Issues to show clearly the direction for present and future
periods.
30. 29th April 2005 The State Council ratified, and the China Securities
Regulatory Commission (CSRC) published Notice of the China Securities
Regulatory Commission on Piloting the Share-Trading Reform of Listed
Companies, and announced the start of reforms of non-tradable shares pilot
schemes. Following the reforms of non-tradable shares, distribution management
systems can assertively constrain the market value of stock issues as well as
investors.
31. 8th 11th October 2006 The 16th National Congress of the Chinese
Communist Partys 6th Plenary Session passed, Decision of the Central
Committee of the Communist Party of China on Several Big Issues on
Promoting the Reform and Development of Rural Areas. The decision to
improve capacity for building a harmonious society was one of the most
important issues raised. This important thesis raised the importance of
enriching and developing Marxist theory, as it is the Chinese Communist
Partys reason for being socialist, and how another socialist theory of
sublimation could be constructed.
32. 16th March 2007 Property Law of the Peoples Republic of China The 10th
session of the National Peoples Congress (NPC) 5th meeting was passed, and
Appendix 1
111
put into effect on 1st October 2007. This is one part of a system of socialist
laws which relates to the adherence and improvement of the states basic
economic system, improving the socialist market economic system, and
ensuring as well as protecting the vast fundamental interests of the people.
33. 15th 21st October 2007 The Chinese Communist Partys 17th National
Congress held in Beijing decided that a scientific outlook on development
which was written into the party constitution. A scientific outlook on
development was an important ideology which was inherited as well as
developed by the central collective leadership of the Chinese Communist
Partys third generation. Marxism epitomised developing a global outlook and
methodology, and is therefore in keeping with Marxist-Leninist and Maoist
ideology. Deng Xiaopings Theory and the important Three Modernisations
are also of the same strain as they advanced with the times in terms of scientific
theory. This is Chinas guiding principle for economic and societal development,
and is the significant strategic thinking behind the development of socialism
with Chinese characteristics that must always be adhered to and
implemented.
34. 9th 12th October 2008 Chinese Communist Partys 17th Central Committee
3rd plenary session convened in Beijing. The meeting was focused on
researching agriculture and rural problems, and passed the Decision of the
Central Committee of the Communist Party of China on Several Big Issues on
Promoting the Reform and Development of Rural Areas. The meeting
emphasised that a firm and unswerving implementation extended thirty year
land contracts. This law was quickly formulated so as to guarantee that the
long-term stability of agricultural land contracts, and the rights of agricultural
workers to use the land in the long term.
Appendix 2:
Deng Xiaopings South China Tour
From 18th January to 21st February 1992, Deng Xiaoping travelled through
Wuchang, Shenzhen, Zhuhai and Shanghai for an inspection, and significant
speeches that took place were published. The South China Tour responded to the
profound question in the middle of Chinas reform and opening-up policy , What
is socialism, and how should it be constructed? This vastly liberated peoples
ideology, stabilised their belief in socialism, and empowered the reform and
opening-up process. It became the second Deed of Declaration following the Third
Plenary Session of the 11th Central Committee of the Chinese Communist Party,
and pointed the way for the Chinese nation to follow the correct course of socialism
with Chinese characteristics.
The following are excerpts from Deng Xiaopings southern tour:
1.
2.
3.
4.
Revolution means the emancipation of the productive forces, and so does

reform.
The Three Kinds of Foreign-funded Enterprises will replenish our socialist
economy, and help the cause in the long run. In short, socialism wants to win
over the advantages of capitalism, and must be bold in assimilating and taking
reference from human society to create an optimal civilisation. Assimilating
and taking reference from various countries in the world including capitalism
in developed countries can be reflected in the advanced business and
management practices of modern socialised production.
The reform and opening-up policy has been making strides, but after all is said
and done there are many fears surrounding capitalism, and of following this
road. The crux of the matter is whether the road is capitalist or socialist.
Deciding on standards ought to be the principle as whether to be in favour of
developing the productivity of a socialist society; in favour of increasing the
overall national power of socialist countries, or in favour of improving peoples
living standards.
The proportion of planning to market forces is not the essential difference
between socialism and capitalism. A planned economy is not equivalent to
socialism, because there is planning under capitalism too; a market economy is
not capitalism, because there are markets under socialism too. Planning and
114
5.
6.
7.
8.
market forces are both means of controlling economic activity. The essence
of socialism is liberation and development of the productive forces, elimination
of exploitation and polarization, and the ultimate achievement of prosperity
for all.
To take the road to socialism is to realize common prosperity step by step. Our
plan is as follows: where conditions permit, some areas may develop faster than
others; those that develop faster can help promote the progress of those that
lag behind, until all become prosperous. If the rich keep getting richer and the
poor poorer, polarization will emerge. The socialist system must and can avoid
polarization. One way is for the areas that become prosperous first to support
the poor ones by paying more taxes or turning in more profits to the state. Of
course, this should not be done too soon. At present, we dont want to dampen
the vitality of the developed areas or encourage the practice of having everyone
eat from the same big pot. We should study when to raise this question and
how to settle it. I can imagine that the right time might be the end of this
century, when our people are living a fairly comfortable life.
At present, we are being affected by both Right and Left tendencies. But it is
the Left tendencies that have the deepest roots. Some theorists and politicians
try to intimidate people by pinning political labels on them. That is not a Right
tactic but a Left one. Left tendencies have a revolutionary connotation,
giving the impression that the more Left one is, the more revolutionary one is.
In the history of the Party, those tendencies have led to dire consequences. Some
fine things were destroyed overnight. Right tendencies can destroy socialism,
but so can Left ones. China should maintain vigilance against the Right but
primarily against the Left. The Right still exists, as can be seen from
disturbances. But the Left is there too. Regarding reform and the open policy
as means of introducing capitalism, and seeing the danger of peaceful evolution
towards capitalism as coming chiefly from the economic sphere are Left
tendencies. If we keep clear heads, we shall not commit gross errors, and when
problems emerge, they can be easily put right. The reform and opening-up
policy has introduced the development of capitalism, and is considered to be a
the primary hazard to the peaceful evolution of the economy, these are left.
If we are to seize opportunities to promote Chinas all-round development, it is
crucial to expand the economy. The economies of some of our neighbouring
countries and regions are growing faster than ours. If our economy stagnates
or develops only slowly, the people will make comparisons and ask why.
Therefore, those areas that are in a position to develop should not be
obstructed. Where local conditions permit, development should proceed as fast
as possible. There is nothing to worry about so long as we stress efficiency and
quality and develop an export-oriented economy. Slow growth equals
stagnation and even retrogression.
It seems to me that, as a rule, at certain stages we should seize the opportunity
to accelerate development for a few years, deal with problems as soon as they
are recognized, and then move on.
Appendix 2
9.
115
There are two tasks we have to keep working at: on the one hand, the reform
and opening process, and on the other, the crackdown on crime. We must be
steadfast with regard to both. In combating crime and eliminating social evils,
we must not be soft. Guangdong is trying to catch up with Asias four little
dragons in 20 years, not only in terms of economic growth, but also in terms
of improved public order and general social conduct that is, we should
surpass them in both material and ethical progress. Only that can be considered
building socialism with Chinese characteristics. Thanks to a strict administration,
Singapore has good public order. We should learn from its experience and
surpass it in this respect.
10. At the Sixth Plenary Session of the Twelfth Central Committee I said that the
struggle against bourgeois liberalization must be conducted for twenty years.
Now it seems it will take longer. The rampant spread of bourgeois liberalization
may have grave consequences. It has taken the special economic zones more
than ten years to reach the present stage. They can collapse overnight. Collapse
is easy, but construction is difficult. If we dont nip bourgeois liberalization in
the bud, we may find ourselves in trouble.
11. The imperialists are pushing for peaceful evolution towards capitalism in
China, placing their hopes on the generations that will come after us. Comrade
Jiang Zemin and his peers can be regarded as the third generation, and there
will be a fourth and a fifth. Hostile forces realize that so long as we of the older
generation are still alive and carry weight, no change is possible. But after we
are dead and gone, who will ensure that there is no peaceful evolution? So we
must educate the army, persons working in the organs of dictatorship, the
Communist Party members and the people, including the youth. If any problem
arises in China, it will arise from inside the Communist Party. We must keep
clear heads. We must pay attention to training people, selecting and promoting
to positions of leadership persons who have both ability and political integrity,
in accordance with the principle that they should be revolutionary, young, welleducated and professionally competent. This is of vital importance to ensure
that the Partys basic line is followed for a hundred years and to maintain longterm peace and stability. It is crucial for the future of China.
Appendix 3:
Chinas Road to Peaceful Development
White Paper
On 22nd December 2005, The State Councils Information Office published,

Chinas Road to Peaceful Development White Paper, which thoroughly explained
the historical necessity and global significance of Chinas adherence to a road of
peaceful development, and promote the international societys understanding and
awareness of Chinas future development trend.
Chinas Road to Peaceful Development

I. Peaceful Development Is the Inevitable Way for Chinas Modernization
To achieve peaceful development is a sincere hope and unremitting pursuit of the
Chinese people. Since the policies of reform and opening-up were introduced at the
end of the 1970s, China has successfully embarked on a road of peaceful
development compatible with its national conditions and characteristics of the
times. Along this road, the Chinese people are working hard to build China into a
prosperous, powerful, democratic, civilized and harmonious modern country, and
continually making new contributions to human progress with Chinas own
development.
Looking back upon history, basing itself on the present reality and looking
forward to the future, China will unswervingly follow the road of peaceful
development, making great efforts to achieve a peaceful, open, cooperative and
harmonious development.
Striving for a peaceful international environment to develop itself, and
promoting world peace through its own development;
Achieving development by relying on itself, together with reform and
innovation, while persisting in the policy of opening-up;
Conforming to the trend of economic globalization, and striving to achieve
mutually beneficial common development with other countries;
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Sticking to peace, development and cooperation, and, together with all other
countries, devoting itself to building a harmonious world marked by sustained
peace and common prosperity.
Peace, opening-up, cooperation, harmony and win-win are our policy, our idea,
our principle and our pursuit. To take the road of peaceful development is to unify
domestic development with opening to the outside world, linking the development
of China with that of the rest of the world, and combining the fundamental interests
of the Chinese people with the common interests of all peoples throughout the
world. China persists in its pursuit of harmony and development internally while
pursuing peace and development externally; the two aspects, closely linked and
organically united, are an integrated whole, and will help to build a harmonious
world of sustained peace and common prosperity.
Chinas road of peaceful development is a brand-new one for humankind in
pursuit of civilization and progress, the inevitable way for China to achieve
modernization, and a serious choice and solemn promise made by the Chinese
government and the Chinese people.
It is an inevitable choice based on its national conditions that China persists
unswervingly in taking the road of peaceful development. During the 100-odd years
following the Opium War in 1840, China suffered humiliation and insult from big
powers. And thus, ever since the advent of modern times, it has become the
assiduously sought goal of the Chinese people to eliminate war, maintain peace, and
build a country of independence and prosperity, and a comfortable and happy life
for the people. Although it has made enormous achievements in development,
China, with a large population, a weak economic foundation and unbalanced
development, is still the largest developing country in the world. It is the central task
of China to promote economic and social development while continuously
improving its peoples life. To stick to the road of peaceful development is the
inevitable way for China to attain national prosperity and strength, and its peoples
happiness. What the Chinese people need and cherish most is a peaceful international
environment. They are willing to do their best to make energetic contributions for
the common development of all countries.
It is an inevitable choice based on Chinas historical and cultural tradition that
China persists unswervingly in taking the road of peaceful development. The
Chinese nation has always been a peace-loving one. Chinese culture is a pacific
culture. The spirit of the Chinese people has always featured their longing for peace
and pursuit of harmony. Six hundred years ago, Zheng He (13711435), the famous
navigator of the Ming Dynasty, led the then largest fleet in the world and made
seven voyages to the Western Seas, reaching more than 30 countries and regions
in Asia and Africa. What he took to the places he visited were tea, chinaware, silk
and technology, but did not occupy an inch of any others land. What he brought
to the outside world was peace and civilization, which fully reflects the good faith
of the ancient Chinese people in strengthening exchanges with relevant countries
and their peoples. Based on the present reality, Chinas development has not only
benefited the 1.3 billion Chinese people, but also brought large markets and
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119
development opportunities for countries throughout the world. Chinas development

also helps to enhance the force for peace in the world.
It is an inevitable choice based on the present world development trend that
China persists unswervingly in taking the road of peaceful development. It is the
common wish of the people throughout the world and an irresistible historical trend
to pursue peace, promote development and seek cooperation. In particular, further
development of multi-polarization and economic globalization has brought new
opportunities for world peace and development, and thus it is possible to strive for
a long-term peaceful international environment. Meanwhile, China is clearly aware
that the world is still troubled by many factors of instability and uncertainty, and
humankind still faces many severe challenges. However, there are more opportunities
than challenges, and as long as all countries work together we can gradually attain
the goal of building a harmonious world of sustained peace and common prosperity.
For many years, China has consistently followed an independent foreign policy of
peace, the purpose of which is to safeguard world peace and promote common
development. As early as in 1974, when China resumed its membership in the
United Nations, Deng Xiaoping proclaimed to the world that China would never
seek hegemony. Since the policies of reform and opening-up were introduced,
China, keeping in view the changes in the international situation, has upheld the
important strategic judgment that peace and development are the theme of the
present times, and declared on many occasions that China did not seek hegemony
in the past, nor does it now, and will not do so in the future when it becomes
stronger. Chinas development will never pose a threat to anyone; instead, it can
bring more development opportunities and bigger markets for the rest of the world.
Facts prove that Chinas economic development is becoming an important impetus
for economic growth in the Asia-Pacific region and even the world as a whole. It
has become the national determination of China to safeguard world peace and
promote common development.
At present, the Chinese people are working hard to build a moderately well-off
society in an all-round way. Not long ago, the Fifth Plenary Session of the 16th
Central Committee of the Communist Party of China set the main targets for
Chinas economic and social development from 2006 to 2010, of which the
principal economic target was to double the 2000 per-capita GDP by 2010 on the
basis of optimizing its structures, increasing economic returns and reducing
consumption; and enhance substantially the resource utilization ratio, and by 2010
reduce the 2005 per-unit GDP resource consumption by around 20 percent. To
attain this target, China, guided by the scientific concept of development with
people first, overall coordination and sustainable development at the core, will
promote the overall development of its economy, politics, culture and society. While
seeking development by relying primarily on its own strength, China sticks to the
policy of opening-up, engages in extensive international economic and technological
cooperation, and shares with all other countries the fruits of mankinds civilization;
respects and gives consideration to others interests, works with other countries to
solve the disputes and problems cropping up in cooperation, and strives to achieve
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mutual benefit and common development; abides by its international obligations

and commitments, actively participates in international systems and world affairs,
and endeavors to play a constructive and locomotive role; and gets along with all
other countries equally and develops friendly relations with them on the basis of the
Five Principles of Peaceful Coexistence.
II. Promoting World Peace and Development with Chinas Own Growth
Peace is the foundation for development while development is fundamental for
peace. For years, the Chinese government and people have made unremitting efforts
to create a peaceful international environment. They cherish dearly the peaceful
international environment jointly created by the peace-loving and progress-seeking
countries and peoples, concentrate on their own construction and whole-heartedly
seek development, and strive constantly to make positive contributions to world
peace and development with their own growth, and promote human civilization
and progress.
Chinas development needs a peaceful international environment. Since 1978,
when the policies of reform and opening-up were adopted, China has endeavored
to develop itself within a peaceful international environment. Its GDP has increased
from 362.4 billion yuan (about US$215.3 billion if converted directly from
Renminbi into US dollar at the average exchange rate of that year) to 15,987.8
billion yuan (about US$1931.7 billion if converted directly from Renminbi into US
dollar at the average exchange rate of that year) in 2004, an average growth rate of
over 9% per annum, calculated according to constant price. Its per-capita GDP has
risen from less than US$300 to more than US$1,400. China has also made new
progress in its building of political civilization, with its democratic system being
improved continuously, the freedom and rights of citizens being protected and
guaranteed by law, and its people exercising their rights of democratic election,
decision-making, administration and supervision in accordance with the law. A
legal system centred on the Constitution has taken initial shape, and the basic
strategy of ruling the country by law has been implemented. Rapid progress has
been scored in its education, science and technology, culture, health, sports and
other undertakings, and the increasing spiritual and cultural needs of the people
have been constantly satisfied. The construction of a harmonious society has been
reinforced, and the state is working hard to realize and safeguard social fairness and
justice, increase creativity of the whole society, beef up social construction and
administration, and maintain social stability and harmonious relations between
human beings and Nature.
Chinas development is an important component of global development. China
has promoted world peace with its own development and made contributions to the
progress of mankind.
China has made contributions to the sustained development of human society.
Based on previous experience and the fruits of modern civilization, it has adopted
the scientific outlook on development to transform its concepts, create new modes
for growth and enhance the quality of development. Over the years, China has
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persisted in exploring a new road to industrialization, featuring high scientific and

technological content, good economic returns, low resources consumption, little
environmental pollution and a full display of advantages in human resources, and
striven to steer the entire society along a road of sustained development of
civilization, with advanced production, affluent life and favourable ecological
conditions. Chinas success in population control has retarded the expansion of the
population of the world as a whole. China emphasizes energy saving, and has
adopted various measures in this regard. During the period 19802000, its GDP
quadrupled, but the annual consumption of energy only doubled. Due to Chinas
intensified efforts at environmental protection, its dust discharge has remained the
same as in 1980 despite a big increase in installed thermal-power capacity. Its
energy consumption of per 10,000-yuan GDP in 2004 dropped by 45 % compared
to 1990. China has made medium- and long-term plans for energy conservation,
aiming to keep an annual energy-saving rate of 3 % by 2020, to save 1.4 billion
tons of standard coal.
China has made contributions to reducing human poverty and improving the
quality of life. It has created a miracle by feeding nearly 22 % of the worlds
population on less than 10 % of the worlds arable land. The living standards of its
1.3 billion people are constantly improving. The Chinese government has lifted 220
million people out of poverty, and provided minimum living allowances to 22.05
million urban residents and aid to 60 million disabled people. The life expectancy
of the Chinese has been extended from 35 years before New China was founded in
1949 to 71.95 years today, close to that of moderately developed countries.
China has made contributions to safeguarding world peace and promoting
international cooperation. On the basis of the Five Principles of Peaceful
Coexistence, China has developed friendly, cooperative relations with other
countries and promoted peaceful coexistence and equal treatment among countries.
China has always adhered to the principle of being a friendly neighbour; and has
constantly developed good and cooperative relationships with surrounding countries
and other Asian countries and expanded common interests with them. China has
established various cooperative relationships with major powers, and unremittingly
augmented mutual dialogues, exchanges and cooperation. China has also expedited
cooperation with a vast number of developing countries, to seek common
development by drawing on one anothers advantages within the South-South
cooperation framework. Active in the settlement of serious international and
regional problems, China shoulders broad international obligations, and plays a
responsible and constructive role.
China has made contributions to world economic development. In recent years,
despite increasingly severe global economic fluctuations, Chinas economy has
maintained stable and relatively fast growth, bringing hope and a new driving force
to world economic development. Statistics released by the World Bank show that
Chinas economic growth contributed on average 13 % to world economic growth
from 2000 to 2004. In 2004, the world economy reported the swiftest growth in
30 years, while Chinas economy grew by 9.5 % and became a key driving force for
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the former. Also in 2004, Chinas import and export figure doubled that of three
years previously, reaching US$1,154.8 billion, and its import figure nearly doubled
that of three years previously, reaching US$561.4 billion. By the end of 2004, China
had made use of US$745.3 billion paid-in foreign capital, and approved more than
500,000 foreign-funded enterprises.
China has made contributions to the stable development of surrounding areas.
China has more than 20 neighbours that either border on its territory or lie across
the nearby seas. Chinas sustained economic growth, social stability and its peoples
peaceful life also benefit its neighbouring countries. The Asia-Pacific economy
maintained 6-% growth between 1999 and 2004. To ensure a stable environment
for the continuous development of its surrounding areas, China overcame arduous
difficulties at the time of the 1997 Asian financial crisis, and stuck to the principle
of keeping the value of the Renminbi stable while expanding domestic demand, and
helped to the best of its ability suffering countries in order to weather the crisis.
China played its role in overcoming the crisis from a financial standpoint. In the
case of the 2003 sudden outbreak of SARS, the Chinese government took decisive
steps, and cooperated with its neighbours in effectively curbing it. Upon the
occurrence of the Indian Ocean tsunami in late 2004, the Chinese government and
its people offered timely and sincere aid the largest external aid in the history of
New China to the suffering countries in their rescue and re-construction effort.
The Chinese also expressed great sympathy and extended assistance when South
Asia was struck by massive earthquakes in October 2005.
Despite gigantic achievements, China still remains the largest developing country
in the world, with a formidable task of development lying ahead. According to the
latest statistics released by the World Bank and statistics recently released by China,
in 2004, Chinas aggregate economic volume accounted only for 16.6% of that of
the US, and its per-capita GDP was merely 3.6% that of the US and 4.0% of Japan,
ranking 129th among 208 countries and regions around the world. By the end of
2004, 26.1 million rural Chinese still lived under the poverty line, more than 100
million farmers have to be provided with jobs elsewhere, and the government is
obliged to create jobs for nearly 24 million urban and rural residents every year.
There is still a long way to go for China to reach the level of the moderately
developed countries and achieve common prosperity for the whole country. China
still needs to make persistent efforts to strive for a peaceful international
environment for its own development, and promote world peace and development
with its own growth. This is particularly significant for both China and the world
as a whole.
III. Developing by Relying on Its Own Strength, Reform and Innovation
China will adhere to the scientific approach for development and have an overall
plan for domestic development and opening to the outside world, and base its
development on its own realities. At the same time, China will maintain the
approach of all-round, wide-area, multi-level openness to the outside world, striving
to attain a more balanced development.
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The main problem facing China in its development is the contradiction between
its underdeveloped economy and its peoples ever-increasing material and cultural
demands, and the contradiction between economic and social development and the
relatively strong pressure of the population, natural resources and the environment.
Past experience indicates that fundamentally China must rely on itself to solve the
problems in its development. By doing so, the country will be responsible to the
Chinese people as well as to the people of the rest of the world. It is an important
principle that guarantees that China will follow the road of peaceful development.
China will not shift its own problems and contradictions onto other countries,
much less will it plunder other countries to further its own development.
To achieve development, China will mainly rely on its own strength, reform and
innovation. It has many advantages and favourable conditions: It has the material
and technological foundation supporting further economic development; it has a
huge and ever-growing market and a high rate of private savings deposits; it has a
large labour force whose quality, as a whole, is improving all the time; it has an
ever-improving socialist economic market system and related policy guarantee; and
it has a stable social and political environment.
China intends to do the following work well in order to achieve development by
mainly relying on its own strength, and through reform and innovation:
Adhering to innovation in ideas and systems. Practice over the two decades or
so since China introduced the reform and opening-up policies has proved that, by
emancipating the mind, seeking truth from facts and striving for progress, China is
able to bring into full play the enthusiasm, initiative and creativity of its hundreds
of millions of people and open up new prospects for its modernization drive. China
will unswervingly push forward reform in all aspects, remain steadfast in the
direction of socialist market economy in its reform, intensify reform with an
emphasis on institutional innovation, and strive to make breakthroughs in some key
areas and important links. Through reform, China will enhance marketization of its
national economy, improve the states macroeconomic regulatory system, and
constantly establish institutions and mechanisms conducive to an overall, coordinated
and sustainable economic and social development.
Opening up the domestic market and increasing domestic demand. It is Chinas
fundamental stand and long-term strategic guiding principle to expand domestic
demand in its economic and social development. China has entered a period when
the pace of industrialization and urbanization is being quickened, the peoples
income level is increasing and their consumption structure is being upgraded. While
changing its mode of foreign trade growth, increasing imports and strengthening
intellectual property protection, and continuing to make contributions to global
trade and the world economy, China keeps up its driving force to maintain sustained
economic development through its huge domestic demand and domestic market.
This has determined that China should and most likely will mainly rely on domestic
demand for its development. China will ensure that investment in fixed assets will
increase at a reasonable scale and pace so as to bring into better play the role of
investment in economic growth. By implementing correct income distribution and
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consumption policies, China is relying more on domestic demand and consumption

to promote its economic development. In recent years, domestic investment and
consumption needs are increasing at a rather rapid rate.
Promoting the strategic adjustment of the economic structure and the change
of growth mode. China considers changing the growth mode a strategic focal point,
strives to base economic growth on the enhancement of the quality of its human
resources, efficient use of natural resources, reduction of environmental pollution,
and emphasis on the quality and efficiency of its economy. China will take a new
road of industrialization using the IT industry to promote industrialization and
letting industrialization support the development of the IT industry. It will quicken
the pace of optimizing and upgrading its industrial structure, develop advanced
manufacturing industry, high- and new-tech industry, especially the IT and
biological industries, increase the proportion of the service sector and improve the
level of services, strengthen the construction of infrastructure facilities of basic
industries, and bring into full play the function of structural readjustment in the
change of the growth mode. China will work hard to develop a cost-saving,
recycling and environment-friendly economy, establishing a national economic
system characterized by intensification and cleanness.
Promoting scientific and technological progress and strengthening the ability of
independent innovation. China is striving to become a country of innovation, and
it is a state strategy to strengthen the ability of independent innovation. It has made
medium- and long-term scientific and technological development plans, setting
forth the objectives and tasks for scientific and technological development for the
next 15 years. China is making every effort to enhance its ability of original
innovation, integrated innovation and re-innovation after absorbing advanced
technology from abroad. By reforming the scientific and technological system and
increasing financial input through various channels, China will promote the
construction of its national innovation system and speed up the pace of
commercialization of research findings. China hopes to increase the proportion of
funds for scientific and technological research and development from 1.44% of the
GDP in 2004 to 2.5% in 2020.
Making every effort to exploit human resources. China will make effort in
implementing the strategy of relying on talented people to make the country
powerful. It will quicken the readjustment of the educational structure and institute
education aimed at all-round development of students, with emphasis being put on
compulsory education, especially compulsory education in the countryside. It will
make greater efforts to develop vocational education and raise the quality of its
higher education, so as to greatly promote the development of education and foster
qualified workers and specialized personnel in all fields. It is expected that from
2006 to 2010 the secondary vocational schools will train 25 million graduates, and
the higher vocational schools 11 million graduates for the society. The enrolment
rate of Chinas institutions of higher learning will reach 40% by 2020. Meanwhile,
China will bring in talented personnel, especially high-level personnel, from abroad,
forming a favourable mechanism and social atmosphere in which talented people
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125
keep emerging in large numbers and every individual gives full play to his or her
talents, thus providing abundant human resources and intellectual support for the
countrys modernization program.
Working hard to build a resource-saving and environment-friendly society.
Historical experiences show that to have a balanced and orderly development of the
world economy, the international community must handle the energy problem
properly. Through dialogues and cooperation regarding energy, China is working
with other countries to safeguard energy safety and stability. China considers energy
saving one of its basic state policies. Centring on conservation of energy resources
and raising the efficiency of energy consumption, China is working hard to develop
a recycling economy so that it will garner the highest possible economic and social
benefits with the lowest possible energy consumption. China has persisted in relying
on its domestic resources and constantly increasing the supply of domestic energy.
China is not only a big energy consuming country, but also a big energy producing
one. Since the 1990s, China has obtained 90% or more of its energy from domestic
sources. The potential of its domestic energy supply is still great. Verified coal
reserves account for only a small proportion of the potential reserves. Moreover, it
is likely that new oilfields and natural gas fields will be discovered, and the future
of new types of energy and renewable energy is promising. Meanwhile, China
upholds the basic state policy of environmental protection, and is making more and
more efforts to protect and improve its ecological environment, so as to create
conditions for sustainable economic and social development. In its environmental
protection efforts, China persists in putting precautionary measures first, treating
environmental pollution comprehensively and preventing pollution at the source.
China gives priority to environmental protection, makes sure that the exploitation
of natural resources is in good order, emphasizes prevention of excessive exploitation
of natural resources, and intensifies protection of natural resources and ecology.
China will unswervingly carry out the basic state policy of opening up to the
outside world, and actively engage in economic and technological exchanges and
cooperation with other countries to raise the overall level of openness. China has
earnestly fulfilled the promises it made when admitted into the World Trade
Organization (WTO) by constantly improving the management system and policies
concerning foreign businesses in China and creating a fair and predictable legal
environment; opening the market further and improving the environment for
investment and trade; improving the trade structure, enhancing the degree of
freedom and convenience for trade and investment, and creating a better
environment for investment; and, in addition, encouraging its own enterprises to
invest overseas and developing alongside foreign businesses. Opening up to the
outside world has played a very important role in promoting Chinas economic and
social development. The foreign capital China brings in makes up for the inadequacy
of capital for development. Domestic industries have been growing rapidly thanks
to the full utilization of overseas markets. The introduction of advanced technology,
equipment and management expertise has improved the production technology and
management level of Chinese enterprises. Frequent exchanges with other countries
126
make it possible for China to share the fruits of mankinds civilization and improve
the quality of its own human resources.
IV. Seeking Mutual Benefit and Common Development with Other Countries
China cannot develop independently without the rest of the world. Likewise, the
world needs China if it is to attain prosperity. Following the trend of economic
globalization, China is participating in international economic and technological
cooperation on an ever larger scale, in wider areas and at higher levels in an effort
to push economic globalization towards the direction of common prosperity for all
countries. Today, the mainstream of international trade is to share successes, with
all as winners. China adheres to its opening-up strategy for mutual benefit. For this,
it has made conforming to Chinas own interests while promoting common
development a basic principle guiding its foreign economic and trade work, develops
its economic and trade relations with other countries on the basis of equality,
mutual benefit and reciprocity, and makes constant contributions to the sustained
growth of global trade.
China has exerted itself to push forward multilateral economic and trade
relations and regional economic cooperation, actively participated in the formulation
and execution of international economic and trade rules, and joined various other
countries in settling disputes and problems emerging in their cooperation, so as to
promote the balanced and orderly development of the world economy.
China has been an active supporter of and participant in multilateral trade
system. Since its accession to the WTO in December 2001, China has strictly kept
its commitments to create more favourable conditions for international economic
and technological cooperation. China has sorted out and revised some 3,000 laws,
regulations and department rules, continually improved its foreign-related economic
legal system, and enhanced the transparency of its trade policies. China has cut its
customs tariffs step by step, as promised, and by 2005 its average tariffs had been
reduced to 9.9 percent, and most non-tariff measures had been cancelled. Banking,
insurance, securities, distribution and other service trade sectors have opened wider
to the outside world. Of the 160-odd service trade sectors listed by the WTO, China
has opened more than 100, or 62.5 percent, a level close to that of the developed
countries. China has actively pushed ahead with a new round of multilateral trade
negotiations, participated in talks on various topics, especially on agriculture,
market access of non-farm products and the service trades, and played a constructive
role in helping developing and developed members reduce disputes through talks.
China, together with other WTO members, has done a lot of work to spur
substantial progress to reach early agreement among the negotiators.
China has continuously stepped up participation in regional economic
cooperation. The building of the China-ASEAN Free Trade Area is going full steam
ahead. Following the practice of zero tariffs on farm products under the Early
Harvest Program, the Agreements on Trade in Goods and the Dispute Settlement
Mechanism Agreement were formally signed in November 2004, and in July 2005
the free trade area launched its tariff concession program, clearing the way for
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realizing its goals. At present, the building of the Shanghai Cooperation Organization
is proceeding with comprehensive and pragmatic cooperation, and its process to
facilitate trade investment has been launched in an all-round way. China has also
initiated negotiations on such free trade areas as the China-Southern African
Development Community, China-Gulf Cooperation Council, and China-New
Zealand, China-Chile, China-Australia and China-Pakistan, and signed relevant
agreements with its partners. China is also an active and pragmatic participant in
the activities of the Asia-Pacific Economic Cooperation, Forum on China-Africa
Cooperation, Sino-Arab Cooperation Forum, Asia-Europe Meeting and Greater
Mekong Subregion Economic Cooperation Program. China advocates the
liberalization and facilitation of investment in bilateral trade, and has signed
bilateral trade agreements or protocols with more than 150 countries and regions,
bilateral investment protection agreements with more than 110 countries, and
agreements with over 80 countries on the avoidance of double tariffs.
China sticks to the principle of mutual benefit and win-win cooperation, tries to
find proper settlement of trade conflicts and promotes common development with
other countries. Trade conflicts are quite natural in international economic
exchanges. Following international practice and WTO rules, China has tried to
resolve such conflicts through dialogue on an equal footing and through the WTO
dispute settlement mechanism. When promulgating and implementing domestic
economic policies, it tries to take international factors and influences into account
as well as the impacts its own economic growth impose on the outside world. Based
on its reform and development, China is serious in judging the effects its exchange
rate reform may bring to surrounding countries and regions, and the global
economy and finance. It has thus advanced the reform in a steady way, adopted a
managed floating exchange rate regime based on market supply and demand, and
linked and adjusted it according to a basket of currencies, so that the Renminbi
exchange rate will remain stable at a reasonable and balanced level. China has
intensified its protection of intellectual property rights, improved the relevant legal
system, and tightened up law enforcement to crack down on all kinds of
violations.
Growing China is active in international economic and technological cooperation,
and provides good opportunities and a huge market for the rest of the world. All
countries, the developed countries in particular, have reaped lucrative benefits from
investment in and service trade with China.
Chinas active involvement in the international division of labour and cooperation
is conducive to the reasonable and effective distribution of global resources. As the
largest developing country in the world, China boasts an abundant labour force, the
quality of which has been constantly improving. It is a natural advantage of China
in developing labour-intensive industries and some technology-intensive ones.
Along with economic and social progress, as well as the improvement of the living
standards of its people, Chinas demand for capital-, technology- and knowledgeintensive products keeps increasing, offering great opportunities for foreign
products, technologies and services, as the country has now evolved into an
128
internationally acknowledged big market. Chinas foreign trade is mutually

supplementary with many countries. About 70% of Chinas exports to the US,
Japan and the Europe Union (EU) are labour-intensive, while 80% of its imports
from the three are capital-, technology- and knowledge-intensive. In the new
structure of international labour division, the country has become a key link in the
global industrial chain.
By importing cheap but good-quality products made in China, the importing
countries can reduce their expenditure and pressure caused by inflation while
satisfying the demands and enhancing the welfare of their consumers. Chinas
labour-intensive products enjoy unique comparative advantages in the global
market. Since 1997, US consumers have saved billions of dollars every year by
buying Chinese commodities US$600 billion in the past decade and nearly
US$100 billion in 2004 alone.
The expansion of Chinas reciprocal economic and trade relations with other
countries has benefited both in a tremendous way. Chinas imports have kept
growing by a yearly 16% since 1978, and the country imported commodities worth
US$1,270 billion in the three transitional years following its WTO accession. In
2004, China became the worlds third largest importer, next only to the US and
Germany, with US$148.47 billion of increased imports or 9% of the worlds total
growth of imports. Also in 2004, Chinas trade volume with the EU, the US and
Japan totalled US$177.3 billion, US$169.6 billion and US$167.8 billion, respectively,
making them Chinas top three trade partners and main sources of foreign
investment. In the same year, Chinas trade volume with Asian countries and regions
amounted to US$664.9 billion, 34.2% up over that of the previous year. This figure
accounted for 57.6% of Chinas total foreign trade value. In addition, China has
become the fourth largest trading partner with and a fast-growing market for
ASEAN.
The huge market China offers is of such great opportunities for international
capital that investors around the world have benefited from Chinas rapid economic
growth. From 1990 to 2004, foreign investors repatriated US$250.6 billion in
profits from China. In 2004, US-funded enterprises in China generated US$75
billion in sales revenue in China, and their products earned another US$75 billion
elsewhere. A 2005 survey by the American Chamber of Commerce-Peoples
Republic of China shows that 70% of American firms are making profits in China,
and about 42% report a higher profit rate than their global average.
Chinas growing investment abroad has also fuelled the economies of the
destination countries. At the end of 2004, Chinas net non-banking direct investment
abroad amounted to US$44.8 billion, spreading to 149 countries and regions.
Among which, US$33.4 billion, or 75 percent, went to Asia.
Chinas foreign economic and trade cooperation has tremendous potential and
boosts bright prospects. In the post-WTO era, China imported US$500 billion
worth of commodities annually during the period from December 2001 to
September 2005, which meant 10 million jobs for the countries and regions
concerned. In the next few years, it will import US$600 billion worth of goods
Appendix 3
129
annually, and the amount will exceed US$1,000 billion by 2010. By 2020, the scale
and total demand of the Chinese market will quadruple that in 2000. During the
process, the rest of the world will find development and business opportunities in
their reciprocal cooperation with China, which will greatly accelerate the growth of
the global economy.
V. Building a Harmonious World of Sustained Peace and Common Prosperity
Mankind has only one home the Earth. Building a harmonious world of
sustained peace and common prosperity is a common wish of people throughout the
world as well as the lofty goal of China in taking the road of peaceful
development.
China holds that the harmonious world should be democratic, harmonious, just,
and tolerant.
Upholding democracy and equality to achieve coordination and cooperation.
All countries should, on the basis of the UN Charter and the Five Principles of
Peaceful Coexistence, promote democracy in international relations through
dialogue, communication and cooperation. The internal affairs of a country should
be decided by its people, international affairs should be discussed and solved by all
countries on an equal footing, and developing countries ought to enjoy the equal
right to participate in and make decisions on international affairs. All countries
should respect each other and treat each other equally. No country is entitled to
impose its own will upon others, or maintain its security and development at the
price of the interests of others. The international community should oppose
unilateralism, advocate and promote multilateralism, and make the UN and its
Security Council play a more active role in international affairs. When dealing with
international relations, it is necessary to persist in proceeding from the common
interests of all the people throughout the world, make efforts to expand common
interests, enhance understanding through communication, strengthen cooperation
through understanding and create a win-win situation through cooperation.
Upholding harmony and mutual trust to realize common security. All countries
should join hands to respond to threats against world security. We should abandon
the Cold War mentality, cultivate a new security concept featuring mutual trust,
mutual benefit, equality and coordination, build a fair and effective collective
security mechanism aimed at jointly preventing conflict and war, and cooperate to
eliminate or reduce as much as possible threats from such non-traditional security
problems as terrorist activities, financial crises and natural disasters, so as to
safeguard world peace, security and stability. We should persist in settling
international disputes and conflicts peacefully through consultations and negotiations
on the basis of equality, work together to oppose acts of encroachment on the
sovereignty of other countries, interference in the internal affairs of other countries,
and willful use or threat of use of military force. We should step up cooperation in
a resolute fight against terrorism, stamp out both the symptoms and root causes of
the problem of terrorism, with special emphasis on eliminating the root cause of the
menace. We should achieve effective disarmament and arms control in a fair,
130
rational, comprehensive and balanced fashion, prevent the proliferation of weapons

of mass destruction, vigorously promote the international nuclear disarmament
process, and maintain global strategic stability.
Upholding fairness and mutual benefit to achieve common development. In the
process of economic globalization, we should stick to the principle of fairness,
achieve balanced and orderly development, and benefit all countries, developing
countries in particular, instead of further widening of the gap between South and
North. We should propel economic globalization towards the direction of common
prosperity. The developed countries should shoulder greater responsibility for a
universal, coordinated and balanced development of the world, while the developing
countries should make full use of their own advantages to achieve development. We
should actively further trade and investment liberalization and facilitation, remove
all kinds of trade barriers, increase market access, ease restrictions on technology
export, so as to establish an international multilateral trading system that is public,
fair, rational, transparent, open and non-discriminatory, and construct a good
trading environment conducive to orderly global economic development. We should
further improve the international financial system to create a stable and highly
efficient financial environment conducive to global economic growth. We should
step up worldwide dialogue and cooperation on energy, and jointly maintain energy
security and energy market stability. We should actively promote and guarantee
human rights to ensure that everyone enjoys equal opportunities and right to pursue
overall development. We should make innovations in the mode of development,
promote the harmonious development of human beings and Nature, and take the
road of sustainable development.
Upholding tolerance and opening to achieve dialogue among civilizations.
Diversity of civilizations is a basic feature of human society, and an important
driving force for the progress of mankind. All countries should respect other
countrys right to independently choose their own social systems and paths of
development, learn from one another and draw on the strong points of others to
make up for their own weak points, thus achieving rejuvenation and development
in line with their own national conditions. Dialogues and exchanges among
civilizations should be encouraged with the aim of doing away with misgivings and
estrangement existing between civilizations, and develop together by seeking
common ground while putting aside differences, so as to make humankind more
harmonious and the world more colourful. We should endeavour to preserve the
diversity of civilizations and development patterns, and jointly build a harmonious
world where all civilizations coexist and accommodate one another.
Over the years, China has persisted in the policies of peace, development and
cooperation, and pursued an independent foreign policy of peace. In the spirit of
democracy, harmony, justice and tolerance, China has been playing a constructive
role, and making efforts to attain the lofty goal of building a harmonious world
together with all other countries.
China is working hard to bring about a just and rational new international
political and economic order, and stands for greater democracy in international
Appendix 3
131
relations. China adheres to the purpose and principles of the UN Charter, attaches
great importance to the UNs role in international affairs as the core of the
international multilateral mechanism, vigorously promotes multilateral cooperation
to settle regional conflicts and development problems, and actively supports the UN
to play a greater role in international affairs. China backs up UN reform, and firmly
helps safeguard its long-term interests and the common interests of its members.
China has joined more than 130 inter-governmental international organizations,
including the International Atomic Energy Agency (IAEA), is committed to 267
international multilateral treaties such as the Treaty on the Non-Proliferation of
Nuclear Weapons, and actively participates in international cooperation in such
fields as anti-terrorism, arms control, non-proliferation, peacekeeping, economy
and trade, development, human rights, law-enforcement, and the environment.
China takes practical steps to establish fraternal relations with surrounding
regions and promote cooperation in maintaining regional security. In line with the
generally acknowledged principles of international law and in the spirit of
consultation on the basis of equality, mutual understanding and mutual
accommodation, China has made efforts to properly resolve boundary issues with
neighbouring countries, settle disputes and promote stability. So far, thanks to joint
efforts with various countries, China has signed boundary treaties with 12
continental neighbours, settling boundary issues left over from history. The
boundary issues with India and Bhutan are in the process of being settled. China
actively promotes dialogue and cooperation on regional security, and plays a
positive and constructive role in such regional mechanisms as ASEAN + China,
ASEAN + China, Japan and the ROK, Shanghai Cooperation Organization, Asia
Pacific Economic Cooperation, ASEAN Regional Forum, and Asian Cooperation
Dialogue. China has joined the Treaty of Amity and Cooperation in Southeast Asia,
lending new vitality to the peaceful and friendly relationship between China and
ASEAN members.
China plays a constructive role in resolving weighty international and regional
issues for common security. With respect to the nuclear issue on the Korean
Peninsula, China has worked tirelessly with the other relevant parties, and succeeded
in convening and hosting first the Three-Party Talks (China, North Korea and the
United States) and then the Six-Party Talks (China, North Korea, the United States,
the Republic of Korea, Russia and Japan). China was instrumental in getting the
participants to issue a joint statement, thus mitigating tension on the peninsula, and
contributing constructively to peace and stability in Northeast Asia. Regarding the
Middle East issue, China encourages the parties involved to resume talks and start
a new peace process based on relevant UN resolutions and the principle of Land
for Peace. As for the Iraq issue, China advocates seeking a political solution within
the UN framework, and is making great efforts in this regard. On the Iran nuclear
issue, China has tried several approaches to persuade the parties involved to engage
in dialogue and find a proper and peaceful settlement within the IAEA framework.
Moreover, China is expanding its participation in UN peacekeeping efforts, having
sent military personnel, police and civil officers on 14 UN peacekeeping missions,
to the number of 3,000.
132
For many years, China has provided assistance within its capacity to other
developing countries to help them build the capacity for self-development as well as
engage in common development. So far, China has provided assistance to more than
110 countries and regional organizations for over 2,000 projects. China has reduced
or cancelled 198 debts totaling 16.6 billion yuan owed to it by 44 developing
countries. In May 2005, the International Poverty-Reduction Centre in China was
formally set up in Beijing. In September 2005, at the High-Level Meeting on
Financing for Development, on the occasion of the 60th Anniversary of the United
Nations, President Hu Jintao announced the new measures China would adopt to
increase assistance to other developing countries: China will give zero tariff
treatment for certain products to all the 39 Least-Developed Countries (LDCs)
having diplomatic relations with China, covering most commodities exported by
these countries to China; further expand aid to Heavily Indebted Poor Countries
(HIPCs) and LDCs; through bilateral channels, exempt or cancel in other ways
within the next two years of all the outstanding interest-free and low-interest
government loans due as of the end of 2004 owed by all the HIPCs having
diplomatic relations with China; within the next three years, provide US$10 billion
in preferential loans and preferential export buyers credit to developing countries
to help them strengthen the construction of infrastructure, promote enterprises of
both sides to carry out joint venture cooperation; within the next three years,
increase aid to developing countries, particularly aid to African countries in related
areas, provide to them medicines including effective drugs to prevent malaria, help
them build and improve medical facilities and train medical personnel; and train
30,000 persons of various professions from the developing countries within the next
three years, and help relevant countries expedite the training of talented people.
China continuously enhances exchanges and dialogues with other civilizations to
promote mutual tolerance. Opening, tolerance and all-embracing are important
features of Chinese civilization. As the trend of economic globalization develops in
depth, China, all the more aware of the significance of exchanges and dialogues
among different civilizations, is working harder to get the rest of the world to
understand China, while absorbing and drawing on the useful fruits of other
civilizations. In recent years, China has cooperated with numerous countries in
holding Culture Weeks, Culture Tours, Culture Festivals and Culture Years, thus
helping promote exchanges and understanding between the Chinese people and
other peoples, and creating new forms for equal dialogue between civilizations.
Conclusion
China is the largest developing country in the world. The 1.3 billion Chinese people,
taking the road of peaceful development, undoubtedly play a critical and positive
role in the lofty pursuit of the peace and development of mankind.
Appendix 3
133
The Chinese government and people are well aware that China is still a
developing country facing a lot of difficulties and problems on its road of
development, and therefore it still has a long way to go before modernization is
achieved. The road of peaceful development accords with the fundamental interests
of the Chinese people; it also conforms to the objective requirements of social
development and human progress. China is now taking the road of peaceful
development, and will continue to do so when it becomes stronger in the future. The
resolve of the Chinese government and the Chinese people to stick to the road of
peaceful development is unshakable.
The Chinese government and people also see clearly that peace and development,
the two overriding issues facing the world, have not yet been fundamentally
achieved. Local wars and conflicts arising from various causes keep erupting.
Problems and conflicts in some regions remain complicated and thorny. Traditional
and non-traditional factors threatening security are intertwined. The wealth gap
between North and South continues to widen. People in some countries are still
being denied the basic right to subsistence, and even survival. All this has made the
road leading to a harmonious world characterized by sustained peace and common
prosperity a bumpy and challenging one, and reaching the goal demands long and
unremitting efforts by the people throughout the world.
The 21st century has opened up bright prospects, and human society is
developing at an unprecedented rate. China has identified its goal for the first 20
years of this century. That is, to build a moderately well-off society in an all-round
way that benefits over one billion people, further develop Chinas economy, improve
democracy, advance science and education, enrich culture, foster greater social
harmony and upgrade the quality of life of the Chinese people. China is certain to
make more contributions to the lofty cause of peace and development of
humankind.

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Civilisational Repositioning

Samer Khair Ahmad

Chartridge Books Oxford

Introduction The Arab Crisis of Civilisation

Western Obstructions and Eastern Openness

1 The Foundation of the Arab Renaissance

2 The European Colonization and the Reaction of Arab People:

The Arab Age of Colonisation

3 Western Obstructions and Eastern Openness

Part One The Arab and Chinese Non-Conformist Rise

1 Non-Conformist The Foundations of Chinas Rise

The Beginnings of New Chinas Rise

Finding the Right Path Following the Cultural Revolution

One Nation, Two Systems

Socialism with Chinese Characteristics

Development and Adjustment

The Future for the Chinese

The Pace of Political Reform

Balanced Development of the Military and Economy

Chinas Non-Conformist Development

Lessons Arab people might learn from Chinas Non-Conformist

The Arab Worlds Development of Dependence Predicament

From Non-Conformist Development to a Non-Conformist Rise

Part Two Civilisational Repositioning and the Future of the

1 What does Civilisational Repositioning actually mean?

China acting as a possible example for Arab undertaking of

The Mao Zedong Era for China and the World

Adjustments to Chinas Foreign Policy

Pragmatic Diplomatic Policy

The Positive Achievements of the Reform and Opening Up Policy

Civilisational Repositioning on Chinas Terms

Civilisational Repositioning Factors for Arab People to take

What does the Arab World have?

The Arab World, China and the Future

Appendix 1: Chinas Reform and Opening Up Policy

Appendix 2: Deng Xiaopings South China Tour

Appendix 3: Chinas Road to Peaceful Development White Paper

Firstly, researching Chinas rise by looking at the philosophical foundations of

The ideological and technological aspects of Europes revival lead to an unrelenting

speaks volumes as to the extraordinary value he placed on education, even though

The Foundation of the Arab Renaissance

The Arab Age of Colonisation

The European Colonization and the Reaction of Arab People

The European Colonization and the Reaction of Arab People

The European Colonization and the Reaction of Arab People

Western Obstructions and Eastern Openness

The Beginnings of New Chinas Rise

Non-Conformist The Foundations of Chinas Rise

Finding the Right Path Following the Cultural Revolution

Non-Conformist The Foundations of Chinas Rise

1. Industry and Technology

Non-Conformist The Foundations of Chinas Rise

Non-Conformist The Foundations of Chinas Rise

One Nation, Two Systems

Non-Conformist The Foundations of Chinas Rise

Socialism with Chinese Characteristics

Non-Conformist The Foundations of Chinas Rise

Non-Conformist The Foundations of Chinas Rise

development of agricultural technology resulted in a reduction of labour required,

Development and Adjustment

Non-Conformist The Foundations of Chinas Rise

Construction and engineering projects faced huge problems due to corruption.

The Future for the Chinese