Fan Hong & J.C. Gottwald – The Irish Asia Strategy and Its China Relations 1999-2009 – 爱尔兰的亚洲战略与中爱关系 1999-2009 –
Order the book: EHV Verlag Bremen – ISBN 978-3867418959 – 2014
The Irish government’s Asia Strategy was initiated in 1999. It aimed to establish with Asian countries a coherent policy of engagement, on a political, economic, commercial, educational and cultural level. China was one of the countries identified as core in the Asia Strategy. Guided by the Asia Strategy political, economic, cultural, educational and social relations between Ireland and China have improved beyond recognition during the past ten years.
A decade after its inauguration the Asia Strategy is set to be revised to take account of the ever changing world. In this book for the first time, leading representatives from government, business and academia together revisit the Asia Strategy, examine its development and analyses it in the context of other European countries.
Following a Foreword by the Minister of Foreign Affairs, the authors discuss the political process that led up to the strategy and the roles of various actors within the strategy, in terms of Ireland-China in particular. Together with its Appendix containing an overview of significant historical steps in bilateral relations, this book presents an informative and in-depth analysis on Ireland’s Asia Strategy and its engagement with the emerging economies in the Asian region, especially China.
Fan Hong is Professor of Chinese Studies. She received her BA and MA in China and PhD at Strathclyde University in Glasgow. She was Chair in Chinese Studies at De Montfort University in UK before becoming the first director of the Irish Institute of Chinese Studies (UCC) since its funding in 2006 and first Head of School of Asian Studies since its founding in 2009. She has published extensively on Chinese historical and social issues.
J.C. Gottwald held positions at Free University Berlin and University of Trier before joining the UCC in 2006. He has published internationally on political and economic reform in China, European China policies and the politics of financial services regulation in Europe and China.
Acknowledgement (See Below)
Foreword – Micheál Martin, TD, Minister for Foreign Affairs
Foreword – Dr. Sha Hailin, Former Ambassador of the People’s Republic of China to Ireland
1. Introduction: The Rise of China and the Irish Asia Strategy – Fan Hong & Jörn-Carsten Gottwald
2a. China’s Economy and Enterprise ~ Part One – China’s Economy: Achievements, Challenges, And Future Orientation – Sha Hailin
2b. China’s Economy and Enterprise ~ Part Two – Business Competitiveness on which China’s Economic Strenght is based – Sha Hailin
2c. China’s Economy and Enterprise ~ Part Three – Sino-Ireland friendly cooperation and mutual development – Sha Hailin
3. Social Change and the Urbane –Rural Divide in China – Martin King Whyte
4. Towards a Creative China: Education in China – Geir Sigurdsson
5. Creating an Asia Strategy – Sean Gorman
6. Irish-Chinese Political and Economic Relations: An Overview – James Cuffe
7. Sino-Irish Relations: a View from China – John Armstrong & Yang Ning
8. Promoting Irish Interests: the Role of the Government – Michael Garvey
9. Friendship between Citizens: the Twinning of Cities – Pat Ledwidge
10. Connecting Cultures: the Role of Education – Fan Hong
11. Comparing Irish and Chinese Politics of Regulation – Jörn-Carsten Gottwald & Neil Collins
12. Ireland and the ASEM Process: the Case of the Asia Europe Foundation – Peter Ryan & Tom Hardiman
13. The Irish Strategy in European Comparison – Deirdre Coby, Niall Duggan & Benedikt Seemann
14. Ireland, China and the EU: Foreign Policy in a Europeanised Context – Andrew Cottey & Natasha Underhill
About the authors
Appendix I: A Decade of the Asia Strategy (1999-2009)
Appendix II: Speech by An Taoiseach Mr Bertie Ahern TD at Tsinghua University, Beijing, January 18, 2005
Appendix III: Chronology of Major Events of Sino-Irish Relations (1979-2009) Read more
Chapter 1: Introduction – The Rise of China And The Irish Asia Strategy ~ The Irish Asia Strategy and Its China Relations
The People’s Republic of China and the Republic of Ireland appear to have very little in common: the People’s Republic of China – a huge, ancient civilisation with the largest population of all at the Eastern end of the Eurasian continent; and the Republic of Ireland – a small island at the opposite Western rim of Europe with only 4.4 million inhabitants. And yet, in spite of the vast difference in size, Ireland and China have an astonishingly rich and long history of bilateral exchanges. In recent years both countries have witnessed tremendous economic growth stimulating deep social changes. However, while the Celtic Tiger has seen his strength evaporate in the current economic crisis, China continues to be one of the centres of gravity for the global economy. Therefore, the incentives for Irish entrepreneurs, politicians and Irish society to look East are growing fast.
Asian economic, social and political transformation after World War II is without precedent. Asia emerged from a war-torn, colonial battlefield of European and American interests to the global powerhouse. Japan, Taiwan, Singapore, Hong Kong and South Korea as the first two generations of ‘Tiger Economies’ set the tone for the biggest country, China to follow suit once the reform policies of the late Deng Xiaoping were introduced. The Third Plenum of the 11th Central Committee of the Communist Party of China in December of this year is one the most important events in recent history. It is the defining symbol for a pragmatic departure from policies based on ideology and for a state-orchestrated and society-based model for policy-making that has tremendously improved the living conditions of the vast majority of the Chinese people. Without the political and economic change in China, the whole phenomenon called ‘globalisation’ would have been incomplete.
The consumer and productivity boom in the United States and Europe benefitted from cheap imports and competitive pressure from Asia in general and China in particular. The unique combination of authoritarian politics with pro-market reforms is questioning traditional ‘Western’ academic notions of democracy and economic order.
As a role model for states and societies, the ‘Asian Model(s)’ of economic development have a deep influence on preferences and policies world-wide. The combination of export based growth, political authoritarianism and limited social pluralism is proving increasingly attractive to governments and people all over Asia, Africa and Latin America.
For Europe and the United States, these developments are challenging. While very supportive of the first generation of emerging countries in Asia, the rise of China has been welcomed less unequivocally. The issue of engagement or containment of China as a potential global rival and desperately needed global partner is continuing while global issues need a truly global response – climate change, energy security, the fight against poverty, non-proliferation of weapons of mass destruction and the war against terrorism. Therefore, it is in the interest of European and American governments to seek close cooperation with China. At the same time, however, different preferences and norms underlying China’s policies are counteracting over-optimistic approaches to liberal world politics. In any case, a better mutual understanding is of core significance. Read more
Chapter 2 – China’s Economy And Enterprises ~ Part One: China’s Economy: Achievements, Challenges, And Future Orientation ~The Irish Asia Strategy and Its China Relations
Part One – China’s economy: achievements, challenges, and future orientation
1. Remarkable economic achievements in China
Ever since reform and opening up, China has made remarkable achievements in economic and social developments. The economy has grown rapidly, people’s living standards have improved significantly, overall strength of the nation has been enhanced, and great progress has been made in social developments. In recent years, in particular, China has given greater priority to the quality of her economic growth and has taken a scientific approach, working towards comprehensive, harmonious, and sustainable development in the future.
1.1 High-speed growth over the past consecutive years
According to official statistics, aggregate GDP, over the past 28 years since China’s reform and opening up, rose from USD 147.3 billion in 1978 to USD 2245 billion in2005, registering a 15.2-fold growth[i]. From 1979 through 2005, the GDP of China in real terms had an average annual growth of about 9.7% (based on comparable prices). During the same period, per capita GDP grew from USD 173 in 1980 to USD 1700 in 2005, registering a 10-fold increase.
Such speed is much greater than the high growth rate once achieved by Japan and other newly industrialized economies in Asia, and has created the biggest miracle in the history of world economic development. Japan experienced an annual economic growth of 3.85% during its golden period between 1971 and 1991, and Korea, Chinese Taiwan, and Malaysia witnessed an annual economic growth of 7.06%, 7.35%, and 6.53% in their respective economies between 1971 and 2003. [ppt 7] We can proudly say, “No county can beat China in terms of long-term sustained and high growth in its economy. It has taken China only 20-odd years to achieve what took other countries several decades or even more than a hundred years.”[ii] After the newly-elected central government made a proposal to take a scientific approach towards a comprehensive, harmonious, and sustainable development, China’s economy has taken on a momentum of fast and steady growth. According to preliminary data worked out in the 2006 Statistics Gazette of the People’s Republic of China on National Economic and Social Development, China’s GDP reached RMB 20940.7 billion, up 10.7% over the previous year (See Chart 1).
1.2 Optimization of industrial structure
Apart from the high level of economic growth, there has been a gradual optimization of industrial structure in China. Back in 1978, the proportion of the primary industry to GDP was 28.1%, secondary industry 48.2%, and tertiary industry 23.7%. By 2005, the primary industry dropped to 12.4%, secondary industry to 47.3%, with the rise of the tertiary industry to 40.3% [iii]. According to the Statistics Gazette, the added value of the primary industry amounted to RMB 2470 billion in 2006, up 5.0%; that of the second industry was RMB 10200.4 billion, up 12.5%; that of the tertiary industry stood at RMB 8270.3 billion, up 10.3%. The three industries account for 11.8%, 48.7%, and 39.5% of GDP[iv].
1.3 Opening wider to the outside world
Ever since the basic strategy was raised at the 3rd Plenary Session of the 11th CPC Central Committee to promote economic and social development through opening up, China has been a very active player in international economic and technological cooperation and competition, and has opened further and wider to the outside world, seizing the opportunities brought by economic globalization. Especially since 2001, China’s accession to the WTO has brought the Chinese domestic market closer to the international market, and greatly enhanced the interaction between our domestic economy and the world economy. Trade and investment have become the major forces driving the economic and social development of China.
During the 10th Five-Year Period (2001-2005), especially after China’s entry into the WTO, trade and foreign investment in China increased significantly. Over the five-year period, total trade volume reached USD 4557.9 billion, with an average annual increase of 24.6%, among which exports totalled USD 2385.2 billion, with an average annual growth of 25%, and imports totalled USD 2172.7 billion, with an average annual growth of 24%. The paid-in amount of FDI was USD 274.1 billion, with an average annual growth of 8.2%. These figures show a significant increase in trade and investment over the 9th Five-Year Period (See Table 1) Read more
Chapter 2 – China’s Economy And Enterprises ~ Part Two: Business Competitiveness In Which China’s Economic Strength Is Based ~The Irish Asia Strategy and Its China Relations
A nation’s economic strength is based on the strength of its enterprises, which comes from their individual competitiveness. Therefore, the competitiveness of an enterprise forms the finest part of the foundation on which the competitiveness of a nation stands.
2.1 Reform, development and basic structure of Chinese enterprises
China maintains a basic economic system characterized by dominant state-ownership, and the co-existence of economic entities of various ownerships. Over the past two decades of reform to build the socialist market economic system, the market is becoming more dynamic and is playing a bigger role in ensuring a sustained and steady economic and social development. According to the first national economic census, out of 3.25 million legal-person entities in China by the end of 2004, there are 192,000 state-owned enterprises (including joint ownership, and exclusively state-owned enterprises), accounting for 5.9% of the total; 456,000 collective enterprises (including joint ownership and contractual cooperative enterprises), accounting for 14%; 406,000 other limited-liability and shareholding companies, accounting for 12.5%; 1.982 million private enterprises, accounting for 61%; 62,000 domestic enterprises (including state and collective partnership and other joint ownership enterprises), accounting for 1.9%; 152,000 foreign-invested enterprises and enterprises invested by Hong Kong, Macao and Taiwan compatriots, accounting for 4.7% (See Chart 7).[i]
The reform of state-owned enterprises is a key and central part of China’s reform of its economic system. Starting from 1978, the reform experienced four stages, namely, decentralization, the separation of ownership and management, the establishment of a modern enterprise system, and national economic strategic restructuring.
The efforts made during the past two decades have solved four basic problems of system, pattern and structure, social positioning, and labour status. To be specific, with regard to system, state-owned enterprises have been successfully separated from the government, becoming a major independent player of the market with the government as the investor.
Regarding pattern and structure, most state-owned small and medium enterprises and 2/3 of the large and medium-sized enterprises have withdrawn from the structure. Regarding social positioning, the state-owned enterprises have turned from social entities in the past to economic entities, stripped of social functions. Regarding labour status, there is a contractual relationship between employees and the state-owned enterprises, following the law of the market.
While promoting and deepening the reform on state-owned enterprises, China encourages the development of non-public economies by breaking down institutional and policy barriers, implementing incentive and supportive measures, welcoming the participation of non-public economies in the reform of the state-owned enterprises, providing better services, and enhancing guidance and management of the non-public economies.
Since 1990s, the contribution of non-state economies to the national economic aggregate has been rising. The added value created by non-state economies exceeds 20% of GDP[ii]. In 2006, investment in fixed assets made by non-state economies accounted for 68.1% of the total social investment in fixed assets. Among the added value created by industrial enterprises with a large scale, non-state enterprises contributed 82.6% (including enterprises with shares held by the state) in 2006. Excluding enterprises with shares held by the state, the percentage was 64.4%. In terms of export and import volume, non-state enterprises contributed 80.3% and 71.5% respectively[iii]. Read more
Chapter 2 – China’s Economy And Enterprises ~ Part Three: Sino-Ireland Friendly Cooperation And Mutual Development ~The Irish Asia Strategy and Its China Relations
There has always been a very good bilateral relationship between Ireland and China, maintained by exchange of visits between senior leaders, holding cultural festivals, promoting trade and investment, and enhancing cooperation in various fields and extensive exchanges between the two peoples.
Ireland enjoys a fine international reputation as the ‘Silicon Valley of Europe’. As an open and knowledge-based economy, Ireland has amassed rich experience in how to seize the opportunities brought by globalization, successfully explore the pattern of opening up, rejuvenate the country through science and education, etc. China, as a country sharing similar experience in development, has a lot to learn from Ireland. There are many in-depth studies in China on leap-frog development, citing Ireland as a successful case. They try to solve the “Irish Mystery” so as to come up with references for China in pursuing her way of scientific development and independent innovation.
Enterprise Ireland has set up offices in Beijing, Shanghai, Guangzhou, and Hong Kong, in charge of promoting Ireland’s export and investment to China. The Investment and Development Agency of Ireland, after setting up offices in Tokyo and Chinese Taipei, also established its Shanghai representative office, to attract Chinese investment to Ireland.
In recent years, China and Ireland have both made great achievements in national construction and the two countries have become closer than ever. Under the initiatives of the leaders of China and Ireland, with the promotion efforts made by the Ireland-China Association, Enterprise Ireland China Office, and the Representative Office of Investment and Development Agency of Ireland, our two countries have witnessed more fruitful results of the cooperation between us in economy and trade, investment, science and technology, exchange of personnel. In 2006, the bilateral trade volume between China and Ireland reached USD 5.46 billion, up 18.6% over 2005[i], representing a 10-fold growth in 5 years. Read more
Chapter 3: Social Change and the Urbane – Rural Divide in China ~ The Irish Asia Strategy and Its China Relations
Social Change and the Urban-Rural Divide in China*
To most observers, China today is an extraordinary success story. In three short decades the world’s most ancient continuous civilization, most populous state, and the former “sick man of Asia” has been transformed into an economic powerhouse that will shape the global political economy for the rest of the 21st century and beyond. In comparison with the former Soviet Union and its East European satellites, China seems to have made a remarkably smooth and successful transition from a centrally planned socialist system to a dynamic, market-oriented economic engine. Yet beneath the surface China’s social and political order suffers from paradoxical internal contradictions which that society’s reformist leaders have not been able to resolve.
The current essay deals with perhaps the most important such unsolved institutional problem in China today, the sharp cleavage between its urban and rural citizens. As Ireland and other countries heighten their economic interaction and diplomatic engagement with China, it is important that they be aware of the deep-seated social conflicts and injustices that have characterized rural-urban relations in China since 1949, as continued failure to address and rectify these problems may threaten China’s continued rise.
It is now clear that the revolution led by Mao Zedong, usually seen as dedicated to creating a more egalitarian social order, in actual practice created something very much akin to serfdom for the majority of Chinese citizens – the more than 80% of the population residing in rural villages, who were effectively bound to the soil.[i] Despite some weakening of the bondage and discrimination faced by rural citizens in recent years, China is still struggling with the legacy of the system the Chinese Communist Party (CCP) leadership created during the 1950s. That a peasant army led by a son of the soil, Mao Zedong, established “socialist serfdom” for rural citizens is a major paradox of the Chinese revolution. Before discussing the grounds for these claims and pondering how this situation came about and was sustained over time, it is worth considering how much at variance this development is with the conventional view on inequality trends in China since 1949.
Conventional Views on Inequality Trends in Post-1949 China
In most conventional accounts, the history of the People’s Republic of China can be divided into two very different eras, the socialist order presided over by Mao Zedong from 1949 to 1977, and the reform era launched by Deng Xiaoping, from 1978 to the present. In the first era, so the story goes, Mao and his colleagues (including Deng) relentlessly worked to attack feudal remnants left over from Imperial and Republican China and to promote greater social equality, even when such egalitarian interventions interfered with economic growth. In the closing phase of Mao’s rule, the Cultural Revolution decade (1966-76), Mao and his radical followers criticized the social order they had built during the 1950s, as well as the Soviet model on which it was based, as still too hierarchical and unequal. It is believed that the resulting Cultural Revolution reforms transformed China into an even more egalitarian (but also more economically inefficient) social order.[ii] In the reform era, in contrast, the conventional wisdom is that Deng and his reformist colleagues switched gears and began pursuing economic growth at all costs, while ignoring the goal of promoting social equality. As a result of this switch, China today is characterized by both high growth rates and rising inequality.
While there is much truth in this conventional account, it doesn’t fit the reality of the changes over time in what has become China’s foremost social cleavage – the rural-urban gap. What actually happened to China’s rural residents was very different from the scenario of systematic promotion of equality under Mao followed by widening inequality in the era of market reforms. As indicated at the beginning of this essay, the actual trend looks much more like descent into serfdom for rural residents in the Mao era, with only partial liberation from those bonds in the reform era. In other words, in multiple ways the social status, mobility opportunities, ways of life, and even basic citizenship claims of China’s rural and urban citizens diverged sharply under the socialist system that Mao and his colleagues created, producing a caste-like division that did not exist prior to 1949. Mao’s socialism led to a fundamental aggravation of the rural-urban cleavage, not the reduction implied by the conventional discourse.[iii]
Since 1978 the picture is more complicated. In some respects the rural-urban cleavage has been weakened and reduced, while in others it has widened still further.[iv] What is clear, at least, is that the extraordinary status gulf between rural and urban residents in China, substantially a product of socialist policies and the practices and institutions of the Mao era, has left a legacy that has endured to the present. This persistence has occurred even as those socialist policies and institutions that were its basis have been increasingly dismantled, replaced by market distribution. This institutional inertia poses a second major paradox: why has it been so difficult in the midst of so much other hectic change to dismantle the systems of urban privilege and rural discrimination that were originally embedded in China’s distinctive form of socialism?
This inertia contrasts sharply with what happened after Mao’s death to another very important caste-like division created by Mao-era socialism. All Chinese families had been classified during the early 1950s into class origin categories based upon their economic standing, property, participation in labor, and other characteristics prior to 1949. These categories (e.g. landlord, poor peasant, worker, capitalist) became the basis for a system of class origin labels that persisted over time and were inherited in the male line. By the 1960s and 1970s your class label, by then based upon past history rather than current social position (for example, those with landlord labels had not owned any excess land since 1953), had a strong influence over whether you were favored or discriminated against in many spheres of life (access to higher education and good jobs, entry into the Party or the army, whom you could marry, etc. – see Kraus 1981). In 1979 China’s reformers declared these class labels outmoded and harmful, required that they be removed from personnel dossiers and other identity documents, and forbid favoritism and discrimination based upon class labels. Almost overnight this class label caste system began to disappear from public consciousness, and it appears to play no significant role in influencing access to opportunities in China today.[v] Read more