Battle of Ideas – is China in decline?
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Well, thank you everyone, thank you so much for coming to this live podcast. Some of you may have stayed earlier for the other Spectator podcast. This is the other end of the world Chinese whispers, where me, I'm Cindy Yu, I talk about Chinese society, politics and history and much much more as well.

And now today I want to talk about the question of whether or not China is in decline. Now it's a deliberately broad question because we've got a long time. I've got a brilliant panel here to really kind of tease into all the different aspects of that, of what decline means and how optimistic we should be feeling about China's future or how fearful some of you might be feeling.

I'm going to, of course, take audience questions in the second half. So the first half, we'll just be discussing amongst ourselves. But do please think about what we're not talking about that you would like to hear. Now, a bit about me and why this topic might be interesting to you.

I was born in China in the 1990s and growing up there it always felt like the future was going to be brighter. My parents had more education than their parents, more wealth, they were better travelled or just travelled at all and it seemed pretty assumed that my generation, the millennials, would have even better life chances. It wasn't even a question. But today in the 2020s China's economic growth is slowing

The once bright spots in its economy, like real estate or for a period of time, tech, seem to be in various stages of depression or meltdown. And in the last couple of years, foreign direct investment into the country has been falling at a record pace as well. Youth unemployment rate just from the summer is about 19% of that's just under one in five, according to the official government statistics of people under 24 who are unemployed.

So how much of this is a considerable and real decline in the progress that China has made in the last half century? Or is it just Western media bias that's making us think like this and see it like this? And actually what's going on in China is still very positive and still something to be reckoned with.

So I want to start by introducing my panel and then ask them each to say a few words on this question of China and its progress and whether or not it's in decline. On my left is Tom Miller, who's the author of two books on China, looking into its urbanization and into its relations with Asian neighbors. He's a former journalist and now works as a senior analyst at Gavkal Research, which is a Hong Kong-based economic research firm.

Isabel Hilton is a writer and broadcaster who has reported from across the world in her career, including long stints in China. She founded China Dialogue, a non-profit organization with a particular focus on environmental issues in China, and she is now a contributing editor at Prospect magazine.

and Austin Williams is an architect and honorary research fellow at the Xi'an Jiaotong Liverpool University, bit of a mouthful, Liverpool University's partnership with this local university in Xi'an, teaching architecture. And he is also an author of multiple China books focused mainly on urbanisation.

So thank you, all three of you, for giving up your Saturday afternoons to be here. Maybe, Tom, we can start with you. No more than five minutes, just brief thoughts on what you think about the question of whether or not China is in decline. Right. Well, that sounds very, very dramatic, doesn't it? The question I was asked to answer was almost the same thing, but it has a slightly different flavour to it, I think, and that is, has China peaked?

Have we reached peak China? I mean, this is something we started to hear about, I'd say, two years ago, and it really came out of the US, I think, at first. And I think that was partly because in the US there is a sort of ideological kind of bias there. People are desperate for China to have peaked. So they want that to happen. And I think, you know, on that question, I don't want to be too kind of mealy-mouthed about it.

But I think it depends, and it depends how you define what peak means. And I would say there are sort of two aspects, two broad aspects that I would look at. The first is economic, and the second is geopolitical. So I'll start with the economic. Now, China has certainly peaked if you look at economic growth.

So, you know, the good old days, if you like, you know, the days of the wild east, you know, when we had double digit growth every year, that, of course, has gone. And it's only natural, you know, China's economy now is very, very large. And when you have a large economy, you can't grow very, very fast. Also, of course, there have been a lot of policy mistakes in the last few years. I mean, zero COVID being the

the big obvious one, but also the bursting of the property bubble, doing it rather faster than perhaps they would have liked. Also the crackdown on big tech and the platform companies and private business, all of that kind of thing. So if you're looking at Chinese growth, yes, that has peaked.

But I think that's not the most meaningful way of looking at the question. I would say a more meaningful way of looking at it is to look at the size of China's economy as a share of the global economy, if you like. And in those terms, it seems that China's economy did peak in about 2021 at about 18% of the global economy.

And for the last couple of years, it has shrunk. And so now I think it's down to getting on towards sort of 16%. To put it in other terms, it was about three quarters of the size of the U.S. economy, and it's now smaller than two thirds the size of the U.S. economy.

Now, it's easy to pick holes in this, the major one being that a lot of this is a function of exchange rates. So for the last few years, the US dollar has been quite strong and the Chinese renminbi has been comparatively weak. And so that means that the US economy looks bigger and the Chinese economy looks smaller when you put it into US dollar terms, which is what I'm looking at here.

But of course, you know, the strength of currencies does to a certain extent reflect the strength of economies. And so I think that is a relevant way of looking at it. So in that sense, yes, China has peaked or certainly it's sort of peaked for the moment. You know, we don't know what's going to happen in the future. And it was the case that people were, it was pretty much sort of, I'd say, received wisdom that China was going to overtake the US in terms of overall GDP at some stage.

And now I think it's received wisdom that it's not going to happen. Who knows? But there has been a big shift there. Then again, I would say China has not peaked in that the economy is still growing. I mean, you can argue over the exact numbers and some people will say they've been exaggerated recently. But I don't think even those people would expect the Chinese economy not to grow in the future. So in that sense, it's going to get bigger. And so it hasn't peaked.

I'd also say that there are aspects of the economy where China is doing very, very well indeed. I would look at advanced manufacturing. Obviously, they've poured in massive amounts of money into this, highly subsidised, but green tech, I'm sure that Isabel has a lot to say about this, but China utterly dominates the world in terms of clean tech now. So in that sense, no, it's a global leader and it's only improving. So I'd say economically, you can make an argument for both sides.

Now, turning to the geopolitics, I would say that China absolutely has not peaked in terms of its international influence.

Maybe in the developed world, in the US, Europe and some of the US allies, the US is trying to contain China. For the US it's kind of existential. The US is the top dog, number one. It wants to remain the top dog and so it's going to keep China down. That's something that the Chinese are kind of a little bit paranoid about, but actually it's well deserved. This is actually happening.

So I'd say possibly Chinese influence in those big developed economies, it is smaller today than it was simply because they won't allow Chinese companies to invest really in those economies. But if you look at the rest of the world,

in what you may term the global south, some people like that expression, some don't, Brazilians hate it, for example, or emerging markets, the developing world, whatever you want to call it, this is really my day job. So I wander around the world looking at Chinese investment, Chinese influence, Chinese trade in emerging markets, particularly in those sort of middle countries that sit between the US and China, trying to kind of hedge between them and get as much out of them as they can.

And I can tell you that in those countries, from Vietnam to Mexico to wherever you want, China's influence is not decreasing, it is increasing. Since 2017, China has been the world's biggest bilateral creditor, so it lends a lot of money to these countries.

It's also a huge investor in infrastructure. It builds a lot of things. It's not always investing, but it has a lot of contracts abroad. And lots of countries around the world see China as a springboard to their development. So there's that. There's also China is very, very deliberately trying to present itself as a sort of model to be emulated, I think, in the developing world.

Exactly. Well, that's one way of looking at it. It has all these initiatives as well. It's like the Global Development Initiative, the Global Security Initiative. A lot of this is kind of hopeless, to be honest with you.

But, you know, there is no doubt that China has considerable influence abroad and it's taken seriously. Also, China is actually quite well liked in many of these countries, you know. So, you know, China's very unpopular in the US and in parts of Europe now and maybe in Australia and, you know, sort of some other countries in Asia perhaps.

But in most of the world, actually, it's not unpopular. If you look at all of the statistics on this. So I think I've gone on long enough, but I would say that geopolitically, in terms of China's influence, no, it hasn't peaked.

One final point on this, actually, is that if you look at green tech and the green energy transition, China's not only exports of things like solar panels and wind turbines, but also increasingly its investment in things like electric vehicles and renewable energies abroad. These countries see China as their kind of root source.

to becoming viable economies with green energy. And so that makes China very, very important. So no, it hasn't peaked in terms of its global influence. Brilliant. Thank you so much, Tom. Isabel?

Thank you very much. I don't know, perhaps I should have told you, Cindy, before I sat up here that I try to avoid making any predictions on China at all. Mainly because, you know, China's full of surprises and all the big things that I've seen in my career have mostly come as a surprise, particularly to the experts. So I'm...

I also have constantly before me the example of Gordon Chang's The Coming Collapse of China and Martin Jakes' When China Rules the World. The shelf life isn't long. The other... I guess...

I mean, has China peaked? Is China in decline? It sort of depends relative to whom is my first question. And second question is, what's your baseline? And certainly, on the baseline question, I have a very, very low baseline because I've been going to China quite a long time. And I first went to China in the Cultural Revolution, and it was desperately poor.

highly authoritarian, extremely isolated. You tended to be taken for an Albanian because that was the only friendly country and if you were loose on the streets people would come up and say Long live Enver Hodja which was stimulating. So

My point is that I've seen China go through a lot of cycles and I've seen a lot of changes in policy. And what I'm interested in in relation to the question is what do we learn from that about China's capacity to manage

new challenges because they're faced right now, we're all faced right now frankly, with rather a new set of challenges. Challenges which are unfamiliar to most of us who have observed the world for the last 30, 40 years. Xi Jinping presents this as a 100 year opportunity which he shares with Putin to remake the world in China's, not exactly in China's image but certainly to suit China's ambitions.

And I'm not sure if it can do that. The difference, I think, I mean, Tom, I don't disagree with anything Tom said. I think what we can learn from the past four decades and these often rather lurching cycles and manifest political disagreements within the party is

is that when China did best, it did best in the more open era, which I would say was from the kind of mid-90s to 2010. And certainly in the first decade of the century, you had a China that was, again, full of ideas in the way the 80s was, where you had self-organising civil society, people tackling social problems, having political arguments, debating China's future in an extremely open fashion.

And this begins to shut down, as we know, from 2010, 2011 onwards. And there's a retreat into authoritarianism, which has been reinforced under Xi Jinping. And latterly, an attempt to sort of de-risk from the world. So, you know, to try to manage China's exposure to external risks and to...

to get off the exhausted aspects of the successful economic model, which is to reduce investment, to reduce the dependence on exports, and to stop pouring concrete. Now, pouring concrete, which was about 30% to 40% of China's GDP, went on too long, continues still too much, and has left a huge debt overhang in China. What do you mean by pouring concrete?

I mean construction, urbanisation, building motorways, airports, but particularly housing. I mean, the housing overhang is quite dramatic. So there's a huge amount of uncompleted housing, which will never be lived in. And there is a lot of middle-class savings, in some cases life savings, in those apartments because...

There was not much to invest in in China, and so people invested in property, not just one, but two, three, four properties, because the price kept going up until, of course, it didn't. And local governments did the same thing. So I think that probably the debt can be managed. I think the middle class distress, the distressed assets, are going to be a continuing political problem, and people do get quite angry about that.

What I don't see easily managed is how do you substitute the revenue that local governments depended on without more pouring concrete. Now, it's almost impossible to pour more concrete because the debt levels are too high and actually the return is very poor.

So there's a hole there. There's a kind of hole for local governments which need to meet social security bills, which need to look after an ageing population, which need to manage political discontent. And I think that a lot of all of this comes back to the question of how the party is going to manage the political discontent which is already manifest, but which may or may not get worse.

Now, it's true that they've had a very successful industrial policy on transition on green technology.

And that was launched around 2008, 2009, shortly after China became the world's biggest emitter, but also when it was evident that the catch-up model was exhausted. At that point, every successful economy that has gone through this cycle has moved up the value chain, has looked at the technologies of the future, and has gone for them. So, you know, Taiwan did that, Japan did that, South Korea did that, and China did that.

And they identified that there's no problem with climate denial in China. They understand basic physics. They know what it means. But they also saw the industrial opportunity of it. So instead of resisting, instead of vested interest trying to derail the policy, they said...

How can we become the monopoly suppliers of a carbon-constrained world? And that gave them a direct interest in a carbon-constrained world, so they're not going to pull out of the Paris Agreement because they've bet the industrial farm on it. Now, the problem that they have now is that they've moved into advanced technologies. A lot of this stuff is basic. It's kind of solar panels, but some of it is not basic at all. Electric vehicles, connected vehicles, etc.

And there are two problems with these, that the advanced economies are resistant because particularly, for example, in Germany, they don't want to see their own industrial economy destroyed, and they've been very slow to smell the coffee, so they're way behind.

But secondly, there are real security issues around connected vehicles. And as trust in China has declined in the European and in the EU and in the United States, those security issues become more salient. They are real, but they also become more important.

at a time when the lure of the Chinese market, which was the great card that China could play, you know, say, you want access to our market, you play by our rules, that market is not as big as it was, certainly not for foreign companies. All the foreign companies are losing market share. And as growth slows, of course the Chinese government is going to want that growth, the benefits of that growth, to go primarily to Chinese business and Chinese enterprises.

So it's a big shift. It's a big shift in the pulling power of the Chinese market, and it's a big shift in the levels of trust.

by China's alignment with Putin, which, you know, Putin has shown that you can weaponize dependencies on vital issues like energy. If China were to weaponize our dependency across a whole range of product, of supply chains, it would be very difficult

very difficult indeed. So on both sides, we've got a kind of drawing in of horns and an attempt to draw lines around security issues.

How the party is going to manage that resistance in advanced economies is one question, and I'm not sure of the answer to that. They do have the rest of the world. So the question there is, can China exert an influence in the rest of the world strong enough to get what it wants, and what does it want?

Well, it wants, in some ways, conditions in China to become norms and standards in the rest of the world. So, you know, for the party to open up to the world, it became fairly clear that it was going to have to export censorship, it was going to have to export a control of history, it was going to have to export narrative. Discourse control is enormously important to this regime. So if you say the wrong thing about China, you know, you now hear about it wherever you are.

And they have passed laws in Hong Kong which have universal jurisdiction, so they can, in theory, come after certainly their own citizens and possibly others wherever they are. So it's an attempt to signify certain global conditions in order to minimize the challenge to the Chinese system.

So that's one really quite big challenge. And I think the second one, which I think they're doing rather better on, is that if they can dominate the technologies of the future, can they set the standards for those technologies so that they continue to dominate them? That's an important industrial. And finally, I would say that transnationally,

trying to rewrite the global rules on things like human rights, universal jurisdiction and all of those things. I think they're doing quite well and that's a major challenge to the global order. But they are working hard at it. They have set up a whole series of diplomatic initiatives about which we really don't talk enough, you know.

GDI, GSI, if you don't know what those are, you're not paying attention and you should pay attention because they're going to change the conditions. Yes, well, let's definitely go into some of that international influence of whether or not how effective Chinese policy is shortly. But Austin, especially on the property question, keen to hear your thoughts.

Well, the bad point about going last is that the other two speakers have said much that I agree with. The good part is that I hopefully have a slight disagreement with some of the comments that have been made. But let's see how it goes. I think that... Unlike the Chinese Communist Party, I encourage disagreements.

And then you get arrested. Well, on the first point, the idea that we have to learn how to signify British education to satisfy Chinese, I think is quite odd because if you go to any university in this country, as many sessions in this festival have spoken about,

censorship and cancel culture will make the Chinese look like an open democracy by comparison. So actually many Chinese students going back to China are delighted when they return because they've learned so many ways of actually censoring in a nice way rather than an authoritarian way. But I was only going to say the clean tech stuff, which I agree that China is the dominant

manufacturer, supplier. And it's ironic that Germany, for example, is kind of criticizing China for having so cheap solar panels and wind turbines when you think if the threat is to the world, if the global warming is such a threat, then let's make them as cheap as possible and to hell with your own domestic industry. But while they're manufacturing those solar panels, wind

full of voltaics, wind turbines, dam with hydroelectric.

They also have masses of coal-fired power stations which are still being built. And even though it's... I mean, they're doing 44 gigawatts, would you believe, this year, which is a supply of the entire British electricity demand in this country, building one coal-fired power station in the north as we speak. And in some ways, it's a kind of a SOP zombie industry, isn't it? I mean, there's basically a huge welter of people who have to kind of be kept...

I hate to sound kind of Maoist in the way that they're actually doing this, but in fact, creating jobs in order to maintain stability in some respects in those kind of heavy industry areas, while a lot of those industries have also collapsed.

But most of those coal-fired power stations are working at 50% capacity, and they've just introduced a new tariff payment where they're giving people 30, 40, 50% of installed capacity donations to keep going for no apparent reason. Even though you can now argue, as they do, that in the last drought, some of the hydropower actually dried up, and therefore you can't have a go at me yet.

Some of that drought hydro capacity dried up and therefore you need to have a backup, which we can talk about that later. The second thing is that if we're talking about is China reaching the end of its

or whatever the actual question was. In some ways, in terms of urbanisation, that idea that China's gone from whatever it was, like 11%, some people say 18% back in the 1970s, it's now 65%, still 15% behind the West. Of population living in urban areas. Population living in urban areas, yes. So as we say, 65% urbanised.

That's really kind of slowed down. So even though you've got Xi Jinping's model city, the Xiongan New Area up near Beijing, which is still going on, it's a £60 billion project to build a city the size of New York.

It's still going on. There's apparently 120,000 people living there. I haven't yet visited it, so you can criticise me and tell me that actually it hasn't happened, and I will believe you, because a lot of this is made up. But I do think that there is still some urbanisation conversation going on. At the same time, because China is riddled with contradictions, as you were saying, Tom, this kind of rejuvenation of the countryside is really kind of taking on a weird dynamic. So in order... You know, partly because of COVID, partly because of...

in some respects, people who would have gone to Guangzhou, maybe worked in the factories, that kind of migrant labour capacity is now over capacity and people are having to go back and kind of live in their villages, not wanting to be

village peasants and dig the soil. So they're still looking for ways out, but there's not many ways out anymore. And you find out, I don't know if you've read Scott Grissel's book on invisible China, which is a really remarkable thing, which is looking at the educational attainment standards of Chinese, ordinary Chinese citizens. And it's kind of one of the lowest in the world. I mean, it's 28% of most workers went to junior school.

It's about 12% went to university. So even though you imagine Chinese people all going, playing the violin and, you know, going to university, in fact, it's a minority interest within urban areas. So to meet the challenges of the new tech and the high tech...

they don't really have the capacity as yet. And it's going to take several generations to kind of kick that in. So I was only going to say then, in terms of the rejuvenation of the countryside, the last story-- because I was in Chongqing just two weeks ago, in neighboring Chengdu--

The mandate by Xi Jinping now is that urbanization is one thing, but we have to now try to give some sop to people working in rural areas and reclaim land. So he wants to reclaim 170,000 hectares of land back to agriculture. So for the last 20 years, it's been this ecological civilization conversation of stopping the industry and maybe stopping pollution and building forests and farms and parkland.

In Chengdu, in 2017, they spent four billion pounds, not quite, four billion pounds to make the biggest parkland cycle path walking area you can imagine. They're now ripping it up to plant wheat and corn and crops everywhere.

So even in the city centre, or Chantreau, the new area, completely being destroyed. And everyone's looking at it thinking, those are my tax dollars that I just paid for this farmland, this parkland. And it was known as Park City.

and now it's being ripped up and given back. So there's a very odd thing going on, partly as a result of, as you were saying, of the Evergrande collapse of housing industry, which is 25% GDP in China, 6%, I think, in the UK. So it's a massive part of the economy. And that collapse of Evergrande has had phenomenal repercussions, obviously, in the West as well as in China.

And that idea that maybe we have to slow down a bit, and maybe we have to take stock about where we live, how we live, and all the rest of it, is having a kind of more of a philosophical kind

kind of conversation about do we preserve the countryside or do we really go urban? So I think there's many things in there which, again, emphasize Chinese contradictions. I also don't have any solution to this, and I certainly don't predict what's going to happen because everybody's been wrong for the last 20 years, so why start now? Isabel, did you still want to come back? I want to focus on the question.

So if your rebuttal is relevant. Well, a little fact check really. I mean, yes, of course, China's coal consumption is a huge problem. China also has by far the world's biggest installed capacity of renewables and is meeting new energy demand largely by renewables.

Coal is partly a result of geopolitics and insecurity because it's what China has. It's what it doesn't need to import. But also you referenced that drought year. That was pretty bad, and it came after the previous year where coming out of COVID there was an energy crisis. Now, provincial governors don't like having to impose blackouts, so they tend to want to build captive plants.

Those plants you said are running at low capacity. That is absolutely right. And they will run forever lower capacity because they're part of the capacity market. They're there to shave off the peaks and they're there to avoid blackouts. They're not there anymore as kind of the future of power in China. The future of coal in China is on the decline.

It needs to go faster, but it is one of the contradictions of having built essentially a kind of 19th century industrial revolution on coal in the 21st century, and it's a problem.

Well, so many interesting themes that you guys have picked out. Unfortunately, we only have limited time. So I want to just pick up on something that you said as well about where do you start your timeline about this decline narrative? And I guess the reason for me I'm interested, as I said in my introduction, is that I was born during what seemed like the peak, right? Or at least peaking, you know, it was going up.

in a sense of, you know, that there's optimism about the future, but if you were, you know, born 10 years earlier, 20 years earlier, then it might have felt different. But I guess what I'm trying to tackle into is when you speak to Chinese people today, or business people, expats who do business in China, the optimism is gone. You know, and so much of that ties in with the economic situation, the political situation, the civil society situation. But

Can we agree that the optimism is gone? And why do we think that is? First of all, just correct me if I'm wrong. Am I just buying into the Western media narrative? Are there still people who are optimistic about China's future? Or is it actually, you know, there is a lot of doubt and insecurity about what the direction is. Tom.

Sure. I think, no, there's no doubt that the optimism is not what it was. So, I mean, I've been going to China since 2000, so 24 years, not as long as Isabel or Austin here. But when I first arrived, and particularly in the noughties,

there was this great sense that you could do anything, right? And I'd have friends who would say, "Let's up a business." And I was, you know, me being British, and I'd never met a businessman, right? No one in my family has ever considered business, you know? They're all vicars or teachers or something, right?

So, you know, I thought, no, that's crazy because that's a big deal to do that. But for them it wasn't. You could just do it overnight. It was so cheap. And, you know, if it failed, who cared? The economy was growing so fast, it didn't really matter. That has completely disappeared, I think. And there's just a sense in China now that, you know, things aren't getting better every day, right? So in that sense, I think that China has become more like a normal country, if you like.

There was a sense that things were always going to improve and now they've realised that actually things can stultify, they may even go backwards.

So China's becoming more like anywhere else. I mean, in that sense, it's just becoming a little more mature, I think. I used to think of China as being sort of in its sort of adolescence. People didn't know the kind of rules. This was kind of economic, but also socially as well. People were doing all sorts of wild things. But it didn't really matter. Now, I think that has kind of gone. And, you know, there's very much a sense in China now that it used to be quite overbearing.

quite open to the world. There's very much a sense now it's much more self-contained, it's much more inward-looking. Why do you think that is? Do you think that's COVID impact? Do you think that's deliberate policy from Xi Jinping or indeed a changing culture of the party in general, if you're to make it more general than just this one man? I

I think it's all of those things. I think Xi Jinping and China's policies have changed fundamentally. If you go back to when he talked about building a new era, I think it was 2017, but if you go back to the last big party congress in 2022,

It's very clear now that China is pursuing two things, essentially. It's pursuing national security on the one hand and tech self-sufficiency on the other. And you feel that securitization across China. There is a sort of paranoia out there. I mean, even though there are kind of small things, just to give you a kind of example of how it feels. Right. So.

I didn't go to China for, what was it, I think four years during the COVID years. It was impossible to get in essentially. Or if you did get in, you had to do your quarantine and I didn't want to do that. So when I first went back, it would have been the summer of last year.

I flew to the new airport, which is very annoyingly an hour and a half south of Beijing, and that's only where BA flies. Well, actually, it doesn't now because BA has stopped flying to Beijing. But there is a new train. In itself, a decline. It's infuriating. But there's a new train that kind of goes to the edge of the city, again, irritating. But on that train...

they had a video. And so almost the very first thing I saw arriving back in China was a video of a woman in a military uniform telling everyone that China was pursuing its missile tech

because the US was trying to kind of keep it down and contain it, and China had to fight back. And then she said, beware of foreign spies. You're like looking at her like... Yeah. And so that was my kind of sort of thank you, China, you know, very, very friendly. And then I was in a hospital in Beijing with my father-in-law, who's in hospital, and I was there with my teenage children. We were probably being rather loud and rather annoying, to be honest.

But there was a guy in one of the other beds who was getting quite annoyed by this. And at one point, he turned up his radio at a very, very high volume. And again, it was a radio broadcast saying, watch out for foreign spies, particularly those married to Chinese women. My wife is Chinese, right? So, I mean, this is a small example, but it's that sense of national security. And you get it, you know, on the streets now, right? You have to swipe your ID card to get into various sort of...

commercial centres or cinemas, all those things. And everything actually... So all tickets now are integrated into your ID in China. You don't buy a train ticket as such. All you do is you buy it, but then you swipe your ID. So you're always being monitored, right? And I do worry that that sort of inward turn...

is going to lead to a sort of stultification, if you like, of Chinese society. I think we saw a little thing in terms of tech in Japan, actually, in the 1990s and the noughties. So China had, sorry, Japan had all its own tech standards. And then it didn't really, it didn't really look out. And then, you know, Apple and America overtook it. And so that kind of Japonification, you know, it may not happen in China, but it is something I think that they should beware. Mm-hmm.

Isabel, we've talked in the past about the existence of foreign organisations in China and how much space they have to operate. NGOs are being forced to... Well, I mean, is it fair to say they're being forced to shut down or just more stringent criteria so that essentially you're being asked to shut down? You're either being asked to put yourself under the tender control of the Public Security Bureau... Right. ..or...

Or it's quite difficult to operate. So the Ingo law, the international NGO law of 2017, I think it was, essentially said you have to register to continue to operate. In order to register, you need an official sponsor. So some bureaucrat has to speak for you, which, again, back in the noughties, they would have been very happy to do, but now, whoa, you know...

Life's dangerous for bureaucrats, right? So why would you take on that risk? If you have one that can take on that risk and you get through to registration, having gone through lots of things like overseas due diligence, were you rude to the political council at the embassy ever? You know, that kind of thing.

or what have you written, or anything like that. Suppose you get registration, you then have to submit your year's work plan to the police, and the police will then censor it or not, rewrite it for you if they don't like what you plan to do. Now, for most NGOs, that kind of life isn't like that. I never had a yearly work plan when I was running a not-for-profit organisation.

It's also true that if you look at all the big NGOs, the big international NGOs in China now, curiously, they're all headed by former regime officials. It's a vote.

Very good people. However, you know, you have to say, is this entirely, you know, what civil society is? Exactly. So it's more of a pongo or a gongo than an NGO. Do you think this helps to shore up its power? You know, presumably there are people in the leadership who think that this kind of securitisation, as you've called it, Tom, does help to kind of tighten the...

disagreements within Chinese society it helps to bolster its power well it's the party power because you know the famous document nine which lists the which leaked in 2013 which was an official document that listed the what they saw as existential threats to the party and it included civil society and a free press and separation of powers and independent judiciary all those things which

we would regard as desirable in a healthy functioning polity. However you choose your leaders, those things are actually quite useful. So again, going back to the noughties, there were a lot of problems that the party wasn't solving. And that's how civil society flourished, because Chinese are fantastically good at organising and tackling things.

And they did. Yes, and they did, complaining, burning cars and attacking party headquarters when they're very cross. But, you know, that's actually a useful thing. AIDS, for example, the party was in utter denial about AIDS, and it was running rampant, particularly in Henan, because of a blood-selling scheme that was poorly managed and was actually giving the contributors to the blood-selling scheme AIDS. So, you know, that, again, civil society...

was really instrumental in tackling that and talking about things the party doesn't want to talk about. Now, one of the problems with Xi Jinping is there are more and more things that you don't want to talk about because it's not safe.

So amongst the difficulties of the system that he's creating is that, as you know, the more authoritarian a society gets, the more reluctant people are to voice their opinions or indeed to tell the leaders bad news. So if something's going wrong, the instinct is to suppress it. Wuhan, perhaps, rather than, you know, say there's been this kind of, oh dear. And the more you suppress it, you know, the more dangerous it becomes, and particularly in the case of health emergencies.

So the leadership gets out of touch. It becomes more concerned with, and certainly evident in Xi Jinping's case and the party's case, national security starts with Xi Jinping's security and the party's security and national security sometimes comes a poor second, third. So you enter this kind of, it's like the Brezhnev period, you know, you didn't solve, you didn't

You didn't put off the collapse of the Soviet Union by doing a Brezhnev. They are doing a Brezhnev, you know, turning inwards, tightening security, domestic security and becoming more authoritarian. So particularly if you're trying to build a high-tech society, you know, where's the innovation going to come from? They've cracked down on private sector. They're putting so much money, save money into it. They're putting money into it.

But you still, you know, you are still, for example, look at the cultural sector, you know, look at soft power. Chinese cultural sector is really dismal now. And that's not a lack of talent or a lack of ideas, you know, because again, you look at other eras and you see this fantastic blossoming of, you know, creativity in China across the arts. It's dead now. And because you can't, you can't,

be sure that what you say is going to get you into, or is not going to get you into trouble. And that's a real problem in the bureaucracy. They just, you know, they have experience of this. They just pull in their horns and they stay quiet. It's very hard to manage difficult problems when you don't have good information and you don't have people who can take local initiatives in a country as big as China.

Yeah, one of the things that I've noticed in my recent trips to China is that people have stopped calling Xi Jinping by his name. They call him La Da, the boss. You know, it was almost like Voldemort. You can't say his name. I mean, I don't know if it stems from fear. When I asked someone, one of my family members who was doing that, he was like, well, you know, my phone's always next to me and you never know who's listening kind of thing. So I haven't personally got to the bottom of why that is. But certainly they would have said previous leaders' names differently.

you know, Hu Jintao, Wen Jiabao, Jiang Zemin. It's all fine, but they call Xi Laoda. And I just think that's interesting in terms of mood that's changed. I also think that the regime is getting notably more paranoid. I mean, you've got an anti-corruption campaign, a standard kit if you come into power because you want to get rid of the people who've been planted. But 10 years on, 11 years on, you're still purging. You're purging people. You're purging the heads of the armed forces, people you've appointed. Right.

It begins to feel a little more like the latter days of Stalin than anything serious. It feels like insecurity rather than...

That's insecurity, absolutely. I mean, the anti-corruption campaign, which is really... If they wanted to deal with corruption, how about a free press? Or how about encouraging investigative journalism or an honest judiciary? But no, I mean, so systemically it's not working. And Austin, on this question of a lack of optimism and this shift towards tech, you have seen firsthand through your students that there has been a shift away from this...

seen property as the bright spot in the Chinese economy? Yeah, I mean, I think that first thing to say, again, on what's been said, is that I'm always surprised because

China is a, let's call it an authoritarian state, let's call it a one-party state. I mean, these are probably over-egging from the 2000s to 2010, as you said. It seemed less so, but obviously it was not a democracy. And in some ways, you kind of get what you pay for in China. So, you know, when there is a clampdown or when people feel afraid about speaking out, you kind of think, well, that's because it's not exactly a free society. So once you have a non-free society, a friend of mine said to me, you know,

soft power is a Western concept. And you'll only have, you know, a real sense that China's got soft power when they develop an Elvis Presley. Yeah.

And only America could have developed Elvis Presley because there was a kind of a freedom to experiment, to challenge, to kick back against the traces. Whereas in China, there's an element of liberalizing, giving people some kind of freedom, letting out enough rope. And then once they become too independent, autonomous, challenging to the stability of the state, then you wind their necks back in, right? Or you lock them up. Jack Ma had it coming to him, but everybody...

and recognises that that could be them. So I do think that the society itself negates it, almost by definition. But at the same time, there will be opportunities for flourishing. And you saw that, I think, in the beginning of this millennium, that the work of really interesting things, the concrete pouring and the development of cities, was one of those things. All sorts of weird architectural projects looking like all sorts of different things. Weird architecture.

Yeah, well, I mean, there's a great statistic which says, I don't know whether it's true or not, but between 2011 and 2014, there's been more concrete poured in China than in all of America's history. I'm probably willing to believe that when you look around you. And when you see ordinary houses, when you go to Tianjin Eco City, it's an actual eco city.

whatever that is. I've written a book on it just to show that it doesn't mean anything. But anyway, it's an ecosystem. But actually, all of the houses are made out of solid concrete, and then they put some timber on the outside and put some fake slates on the roof. So, you know, it's like one of those things. But I think that... But in terms of the construction industry or students and the actual university sector, I was saying earlier before we started that in my university, as was in Suzhou, in Jiangsu,

We had 200, just over 200 students when we first started back in 2011. And then this year we had four. And there's been a massive collapse. I taught in Shanghai Chow Tong University just six months ago. I asked all the master's students, final year master's of architecture, hands up those people who want to be an architect. Nobody, right? Because they all want to move into digital ID technology.

You know, the new tech, some super duper, I mean, I don't even know what the hell they're talking about, to be frank, right? But that seems to be the future where they want to go. And this is all old hat. And it's obviously a repercussions of Evergrande and the collapse of the construction industry. And the fact that therefore architects are going back to the old ways of making you work nine hours a day for six days a week, et cetera. And the pay is really low now. If you're an architect in Shanghai, you get paid $400 a month, right?

So it's like it makes London look fantastic. So there's a real problem in terms of, you know, I studied for five years, seven years, and are you telling me you're giving me $400 a month? Do me a favor. Let's go somewhere else. But I think it is deeper than that, that there seems to be a sense. I felt there was a sense that...

I was going to say Deng Xiaoping, but generally from the 1990s through to 2010, there was a sense that people were building something. There was an engineering mentality, so all the Politburo were engineers. Everybody thought literally building a new world, right? It was going to be China's century. And there was something that they were aiming at.

striving to achieve through the built environment but through the discourse around that. Whereas now, as we've said, there seems to be a lack of optimism and that optimism then reflects itself through architecture not meaning as much as we thought it did. And maybe if you build it and it stands up

Who needs an architect? Let's be frank, right? So just crack on, and I'll go and do something a little bit more exciting over there. I think it's more about tech now, you know? It's more about semiconductors, more about AI. It's more about this tech race with the US in particular, right? I mean, if they're going to...

ban exports of American semiconductors, then we've got to create our own via Huawei. So that kind of thing, you know, I think there's optimism in some sectors. You know, we've talked about green tech as well. But architecture seems to be one of those. Yeah, but there's a Taiwan thing going on, isn't there? There is a Taiwan thing. There's always a Taiwan thing. Maybe we don't want to raise it. But I also think, you know, whenever I go to, you know, Suzhou or Shanghai and you're in a coffee shop and there's this kind of automatic robot machine

floor cleaner, right? Or a robot roaming down the street with your parcels in it instead of a postman. You think, you know, if you sold that to Newcastle,

They'd have that kicked over, right, before you can shake a stick at it. It only works in a fairly rigid authoritarian regime, I think. Well, the bike rentals that are now ubiquitous in China as of like 15 years ago, that we have now, you know, line bikes, they're electric, but the ones in China are just normal bikes. I remember when they were first introduced in Birmingham and they ended up in the canal. But actually in China there was a mountain of...

Yeah, I mean, there's so many excess mics now as well. Can I just, on the optimism and pessimism front, I mean, for me the question is, how does the party manage this? Because the story the party tells has shifted, you know, every kind of couple of decades that I've been going to China. So when I was first in China, it was, you know, poverty, sacrifice, the glorious socialist future. And then there's a kind of terrible handbrake turn when Deng Xiaoping comes in and it's,

to get rich is glorious, open up, embrace the world. Then Tiananmen happens and it's stay out of politics and we will make you richer because the party is leading you to prosperity. When you can't tell that message anymore, then you default to the other thing that came out of Tiananmen, which is that the evil foreigner will always try and do China down. And that's a core message now.

you know, that comes into, you know, spying on people like Tom, who, you know, frankly, looks suspicious to me anyway. There's Tom spying on people in strange situations. Ah, yes. One way or the other. And that is, you know...

That can have dangerous consequences. We've got 22% youth unemployment at the moment. People don't see a future. So you need somebody to blame and blame the foreigner. It's 18% now because they've taken graduates out of the totals.

I'm a little worried that, yeah, so things in China are not what they were, right? Come on, let's give us the optimistic message. I want this, I want this. Yeah, and, you know, there's a lot of sort of low-level grumbling from people. Yes, if you're young, it's hard to get a job.

consumer confidence has never been lower, blah, blah, blah. This is all true, right? There are tough times in China. But I don't want to give the wrong impression. So I think if you're looking at it from the West and you haven't been to China recently, you may think it's some kind of dystopia, right? So it's a techno-authoritarian state. The economy's collapsing, blah, blah, blah. Yes, it is techno-authoritarian. Yes, the economy's doing badly. But when you go there...

There's still a lot of fun to be had. China looks, you can say this is superficial, but it looks

bits of it look incredible, right? So the kind of material advances that have happened are phenomenal. And there's been a lot of advance actually since pre-COVID, right? So I hadn't been back for four or five years and I went back and I was like, whoa, a lot of kind of beautification has happened. I mean, Shanghai particularly now, you know, Shanghai is kind of outlier, of course, right? And Shanghai is not China, et cetera, et cetera, et cetera. But it's also a place that some people here may have been to and people listening, you know, they probably have visited before.

And, you know, it looks incredible, everything works, the public transport is phenomenal. If you go to Suzhou Creek, which is the tributary of the main river in Shanghai, it used to be literally a sewer. It was where Shanghai basically dumped all its shit, right? And it absolutely stank. And dead pigs. Everything, right? It was hideous. The only good thing about it was that there was a sort of artist's kind of commune in some factories there, because it was cheap, right?

They've spent five and a half billion US dollars, I think it is, on cleaning it up. And now you go there, there are bloody herons in the river. It's incredible. But it's not just the centre of the city. I went out to where I used to live, which is in the suburbs. And the quality of life has improved so much, just looking at the parks, just the kind of living standards for ordinary people. And yes, there have been massive policy errors. Zero COVID and lockdown was absolutely hideous. Yes, the economy is not doing well, but...

But equally, people's living standards have improved so much. We mustn't forget that. And if there's one statistic that's worth pointing out, I think, here, and again, this goes to the whole peak China thing, your average life expectancy in China is now higher than that in the U.S.,

That is quite a remarkable thing, I would say. So, you know, let's be a little bit nuanced about it. You know, it isn't all doom and gloom. Yeah, brilliant. Thank you so much for that corrective. And maybe I'm just being a spoilt millennial, only child, little emperor, expecting better. But the point about the river is a really good one because environmental conservation has got better, it's very

I mean, at least in urban areas, people care much more about green and diversification. Hugely. And in that rapid, from Tiananmen to, I suppose, the beginning to the noughties...

It was GDP growth above everything. And if you talk to officials at that point, they would say, environment's something that rich countries can afford to think about, but grow first, develop first, clean up later. And they got to a point, the problem was that China doesn't have a lot of headroom, you know, in environmental terms. It's very scarce of water. It has too many people, not enough useful land, and almost no controls on the kind of dumping of, you know,

enterprise pollution onto the public. So we get to the noughties and you can barely see across the street in Beijing in smoggy days the water is in a massive crisis and that's when the NGOs start to organise and push. And

Actually, for all that Xi Jinping has his, I can disagree with a lot of what he does, but he has quite a long record of recognising that the environment needs to be taken care of because, one, it's a material factor. It was having a terrible effect on health. And it affects food security, it affects everything.

So he did introduce much firmer controls, much bigger penalties for breaking the law.

much more rigorous inspection and all of that has got a lot better. That's partly about, you know, again, you have a newly urbanised middle class who can't let their child out to play because the air's too toxic and they were getting out on the streets and telling you about it throughout the noughties. There were really, really big protests and the party listens and the party responded.

I think that's no different to Western development, but as we all know, China did it faster and more recently. It was a 19th century model. But it's also the fact that China was with one eye on globalisation.

one eye on joining the Paris Accords so you could tell off America for not joining the Paris Accords. And the idea that if you're going to try to be an attractive city or model for Western investment, you can't expect me to go and live in Shanghai if it's polluted shithole. So you're going to have to clean things up. Meanwhile, by the way, apparently every river in Britain is a shithole. Things have turned full turtle. To be fair, Shanghai was always all right. I'm a Beijinger, that's how I feel, but Beijing was...

Terrible. It was bad. Of course, of course. You ever been to South Wales? Not at all. It doesn't compare. No, no, let me tell you. Let me tell you. When I first visited, well, actually, when I went in 2011, I did a pollution odyssey, and I went to the five most polluted cities in China, Lanzhou and all the rest of it. And I was taken to depress. I loved it. It reminded me of my childhood.

But actually, they weren't as bad as I thought. I mean, if you see what's happened in Langeau, if you see what happened in Langeau, there's that famous story of Langeau New City, which they built, you know, because the airport is so far away. Was that when they knocked down, oh, there was a mountain, which they flattened? Yeah, you just killed my punchline. That was horrible.

No, sorry. No, it is the story. It is the story that to create the new city of Lanzhou, that they actually went to the area. And this was an ecological measure, which obviously doesn't resonate very well with an ecological mindset in the West. So again, the contradictions are there. But the idea that you take an area and you take off the tops of 400 mountains and use it to fill in the valleys to create a plateau in order for you to build a new ecological city.

And the solution-- and the point of doing that was it helped blow away the pollution further down the valley to some other poor--

peasant hovel and it left Lanzhou looking like an eco-city and they've got an eco-city certificate and they've got its investment. That is part of the problem with the Chinese approach and the dominance of the engineering mindset that they basically thought they could engineer their way out of all of these problems so that's why you've got the south-north water transfer and all of that instead of an ecosystem approach.

But it's beginning to dawn on them that you can't engineer your way out. Well, I'm glad we've managed to touch on some of the reasons for optimism as well as the reasons for pessimism. And I want to go to the audience questions now as well. Brilliant. We've got quite a lot. So why don't we take three at a time for now? I'll let you guys pick. Well, there's too much power! I can get more power.

Yeah, no, thanks for that. I was at the British Museum a couple of weeks ago for the very good Ancient Silk Roads exhibition. And while I was going around there, I thought, you don't hear very much about the modern Silk Roads anymore, at least kind of in Britain, in terms of the Belt and Road kind of initiative, which I know turned ten last year. But, you know, there has been...

a recognition of it played a role and sometimes you hear a report being brought up here or kind of questions of kind of debt diplomacy. But I was wondering if the, in China, what the view of that initiative has been. Is that a legacy project of its kind of periods of kind of expansion and now it's going to a little bit of a retrenchment, it kind of served its purpose or is it kind of more something they're looking forward to refine for a slightly different age? Brilliant question, thank you very much. Yeah, well who have you guys picked?

Oh, yeah, here we go. Yeah, I had a question about China's demographics. It's obviously China's aging rapidly, but also it doesn't have the history of migration that Western countries have. And we've seen what that's happened in Japan. So I was wondering if anyone had an opinion on how that would affect China's decline. It's pretty clear that Xi Jinping also sees China to a certain extent as an ethnostate when it comes to things like what he's doing with the Uyghurs as well. It's not like the Japanese and the South Koreans are going to go, let's go migrate to China.

And it would clearly be that if you're going to bring in loads of people that know the level of freedom we have in the West or in other Southeast Asian countries, it doesn't matter. But if it's values that are opposed to that that China currently has, Xi Jinping's going to go, I don't want them because they're going to be a threat to the state. But my point is, how do the demographics and a shrinking worker population, and that must then, things like...

increasing wages as well, it will not be the low-cost producer anymore, impact China's decline, as it's clear they can't just let those people in and continue and keep control. Thank you. My name's

Bill Dorody, I'm a visiting professor at the National Party School in Shanghai. The last time... Welcome, comrades. Thank you. The last time I was there, Tong Si, having lunch with the director, he pointed out what he thought China was worried about. And he said, we're not worried about Trump. We're not worried about the South China Sea. We're not worried about the Uyghurs in Xinjiang province or Hong Kong.

what we really worry about is that when we look at our young people in Shanghai on the metro, they're all facing their cell phones and we've got no idea what they're up to or where they are. And I thought that was quite an insightful comment because it kind of suggests that their concern is about controlling culture. And in that regards, that's my question really. To what extent do you as a panel think that what you've spoken about

is more focused on power than on authority.

China's an economic power and an economic player. To some extent, it's a political power, as Isabel pointed, in relation to kind of redrafting human rights stuff, although I don't know how much traction there really is in Chinese characteristics and Chinese wisdom in some of their documents. But I don't think they've got much cultural authority when it comes even to their own neighbours. And so I was curious whether, you know, in terms of its peaking...

Has it even started in terms of achieving authority that inspires people around the world with what they're doing rather than browbeats them with what they've achieved? So that's what you guys are meant to do at the party school, is to exert that cultural power. Right. Any of... Feel free. Shall I start? Yeah, start with the one in Silk Road, Tom. Yeah, I did write a book about it, so I kind of feel obliged to say something about it. So...

So yeah, the Belt and Road Initiative. What are we going to call it? One Belt, One Road. So yes, it was a very big deal and we heard an awful lot about it a few years ago and it was very handy for me when I published my book in 2017 because it was everywhere. So I could sell a few copies. And yes, we don't hear as much about it now. I think that's absolutely accurate. I think there are a few reasons for this. But partly it's about the initiative kind of maturing.

So the way I look at it is I would divide it into sort of three sections. So like Belt and Road 1, 2 and 3, if you like. So during the first sort of five years, we're talking sort of 2013 to 17-ish, it was all, it was kind of gung-ho. It was, you know, it was,

Let's go out there and build as much stuff as we possibly can basically. And I've traveled the world looking at stuff that China's built and I used to have some very, very annoying clients who thought it was all kind of invented. I said, no, no, no, I've been from Ethiopia to Kyrgyzstan. You know, I've seen this stuff. There is an awful lot they've built. And yes, some of it was wasteful. There were white elephants, but actually a lot of it was very, very useful stuff.

But they did a lot of that, and they didn't worry too much about, you know, the... Obviously, they were financing it too, and they didn't worry too much about, you know, sort of getting the money back at first. And then there was a bit of a reckoning, really, in Belt and Road 2, I'd call it, from, say, sort of 2018 to 2022. So, you know, it all peaked in terms of financing and construction in 2016-17,

Then there was a little bit of retrenchment, if you like. You know, suddenly countries started getting in debt and perhaps they wanted to borrow less. You know, the Chinese banks that were financing this were suddenly thinking, you know what, we might not get our money back. And there is this whole idea of a kind of debt trap. You know, a lot of this was pushed, frankly, by the Trump administration. A lot of it was total nonsense. You know, there was this idea that China was going out there.

trying deliberately to sort of entrap countries and then steal the infrastructure that they were building. That was never the case. There was no evidence for it anywhere. But what did happen is that some countries did get into debt. And in that sense, they did get trapped by it.

And, you know, it's not in China's interest, frankly, to have a bunch of, you know, sort of indebted countries around the world. And these banks want to get their money back. Right. So it did slow down. And then, of course, there was COVID as well. And so there was much less there was much less going on. What we're seeing now, really from last year, Belt and Road 3, is that, yes, it is happening. China is still financing and building banks.

things around the world, but it's kind of changed a little bit. So they talk now about small but beautiful, if you like. So we don't have as many kind of mega projects, you know, they won't be building a new railway from Nairobi to Mombasa, for example. There will be some mega projects still, but not quite as many. But you'll see a lot more, for example, of investment in solar parks and wind farms and all those sorts of things.

And a lot of this stuff is going to countries that may or may not actually officially be Belt and Road members. So Brazil is one. Brazil is not, you know, officially hasn't joined up. Yet there's an awful lot of stuff happening there. So, you know, I, these days, I prefer not to talk about the Belt and Road, but just to talk about Chinese overseas investment and Chinese overseas financing.

So that's the Belt and Road. Oh, one other thing on that, actually, is that, yes, it is still there because it was written into the party constitution, right? And it's very much associated with Xi Jinping himself. And so there is a legacy issue there, as you said. Very briefly, I'll come to the demographics, too, because obviously this is one of the big headwinds that China has to face. And one of the reasons why people talk about a decline or a kind of peak in China is

So, you know, if you look at the Chinese population, you know, we've had two years of absolute declines, you know, so China is actually shrinking. And the population will fall below 1.4 billion, they think, by about 2030.

Then the other important number is that the working age population, I think that's defined as 16 to 64, don't quote me on that, but I think it is, peaked in 2012. So it's been shrinking since 2013. And you then kind of think, well, if you've got a shrinking working age population, does that mean that the economy is kind of screwed?

You know, certainly it makes life a lot more difficult. I know China is already a sort of aged society under, I think, the UN definition. It'll be a super aged society by the 2030s. That's tough.

But one thing that is worth pointing out, though, is that China right now does a very, very bad job of squeezing sort of juice out of the lemon, if you like, right? So there are an awful lot of people in China who don't do very much.

And there are a lot of people who retire very, very young indeed, right? So particularly if you're working for the government or state-owned company, if you're a woman, you retire at 50. If you're a man, you retire at 55 or 60. I mean, the numbers are a little vague, but basically it's very, very young. They're trying to push up the retirement age, but it's kind of voluntary.

But there's an awful lot they could do to squeeze more productivity out of their workers. And Austin was mentioning before, he was talking about how a lot of people in China still aren't very qualified. That's true. It's not so true among the youth, actually. There's actually quite a high rate now of people going to university, at least in China's cities. And China graduates, to use the American verb, more engineers than any other country a year, all these things. Maybe India is now kind of getting there.

But they could actually, they can still grow with a shrinking working age population. It'll be tough. They've got to make some tough changes. They haven't quite done those. But it's not, it doesn't mean the economy is completely dead in the water. Throw it to you guys. I agree on Belt and Road. If you look at the 10th anniversary celebration, slightly in air quotes, last year,

The attendance was low. There was a lot of kind of sloganeering. But the investment peaked, as Tom said, in 2017. And there was a lot of not doing due diligence in the first enthusiastic phase. Everybody wanted to get in because the boss had

endorsed it and that's one of the problems of China's system. Oh, Xi Jinping likes the Belt and Road, let's, you know, so all the provinces, all the enterprises were hastily repainting their boxes, Belt and Road project and, you know, off they went.

Debt-track diplomacy was nonsense invented originally by an Indian commentator, actually. On my dinner with him. Yeah, yeah. He's a very bright chap, actually. Well, he's all right, but he's wrong about a lot of things, including that. But the

The current phase of China's external operations to leave out Belt and Road, you can't do big projects anymore because most host countries can't absorb any more debt or finance. And what they need, mostly what they need, are new energy projects. Now, in the first phase, you might think that China being a new energy powerhouse would export solar panels to Africa, for example.

And why didn't they? Well, because solar panel manufacturers were largely private, didn't have the depth of capital to go abroad, whereas the big coal companies had state-owned enterprises with state-owned banks backing them, and off they went. And they could put a package on the table and say, you know, we can finance it. And the new energy companies couldn't do that. So there's been a transition now that more state-owned enterprises are buying into new energy products, and you're beginning to see that happen.

happen and you will see that happen much more because that's where the demand is and China will meet that demand. But Belt and Road, it's a plaque on the wall at this point rather than a project.

Global Development Initiative is kind of moving up in the rhetorical stakes. So we're seeing a kind of recategorization of China's definition of itself in the world, the cultural initiative, the development initiative, the security initiative, and all of those things which we, again, really ought to pay more attention to. On the demographics, it's a bit of a mystery to me, and maybe someone can explain why.

that all the statistics you quote are accurate, but why is there 20% youth unemployment? So we have a shrinking working population, but we still don't seem to be able to employ the ones we have. And it's a bit of a mystery.

But what I'm sure you will have noticed, Cindy, is that after 20 years of telling couples that they could only have one child, they're now on their knees begging them to go out and procreate. And any minute now, they'll make it mandatory. So the state is back in the bedroom. But it's kind of cheering people on instead of telling people to stop. And it's getting more and more strident. It's not involved before we get more.

Your generation is just not playing ball. They're just saying, no, thank you. The women are saying, no, the cost's too high. You don't give me the support that I might have. So I don't think they're going to get a baby boom. And so then they have the problem of having to meet those requirements.

how to look after the older generation. On the cultural authority and the worry about young people on the metro looking at their cell phones, and you say, "We don't know what they're looking at,"

Frankly, I'm very surprised they don't know what they're looking at because this is the most penetrated digital system in the world. And they not only can make sure that they're not looking at the wrong thing, but they can pretty much track what they are looking at. So, yeah, what people are not doing. In fact, it got so bad that studying Xi Jinping thought is now compulsory.

I'm sure I heard a resounding cheer across China saying, oh, good, we're going to have to study Xi Jinping thought. There's an app for it. There is an app for it, exactly. And the app actually monitors. So you can't just, you know, press the button and go and make a cup of tea or walk the dog. It actually pays attention to whether your face is there. And if your face isn't there, you're not clocking the hours. But I don't need the party officials at the moment.

It's also, it's in education. It goes beyond that too. And in enterprises now, they've got party cells. And also just, so my father-in-law and mother-in-law have had to do sort of classes just with their neighbours, right? So it's, you know, and they've spent hours in the evening having to mug it up and then they're tested.

And they'd been in trouble for getting the answers wrong, right? There was one night where my father-in-law had to go through the night mugging it up, and then he had a stroke at four in the morning. Because... It is darkly funny, but, you know, because he'd been mugging up Xi Jinping thought for kind of eight hours and basically collapsed. Right, and there are volumes and volumes of this stuff. And if that is China's major cultural export, I have to say it may not thrive. LAUGHTER

He should have embraced the Winnie the Pooh thing. He should have gone for Winnie the Pooh. That would have been straight to the heart of the American imperialism. This is Winnie the Pooh's revenge. I come to this in as much as there's this phrase in the West about military authorities are contradictory in terms. And I do think that we sometimes overstate...

the ability of the state to know exactly what people are doing. I mean, China's pretty good at it. But when I was logging on last time to a meeting

I think it was Alipay. And, you know, you have to go through this whole process of you have to tell them everything about yourself, your bank account, your age, your wife's bank account, you know, all the rest of it, right? And then at the very end, you get to this, like, 20th page, and it says, right, put your face in front of the screen and take a screenshot so we can recognize you against your passport. And as I did it, it says, stop covering your chin. And you think, if the entire apparatus of the Chinese state is fooled by a beard...

then they've got a long way to go, I think. But I recognise the nature of the problem that the Chinese state, it's a bit like the Labour Party back in the 1990s in this country were saying, no, we have all these members of our party but we don't know who they are or what they think or...

or whether they're actually voting for us or whatever. So the Chinese state might know what you're watching, but they don't know what you're thinking, which is really the one last refuge of freedom in China. And that's springing up a lot in a lot of kind of private networks and social media. So there's a lot of anger in China, as we've pointed out, you know, in protest. And I've always found it remarkable that since we've mentioned COVID several times,

When you look at the West, and that could be any country in the West, it was always, look at UK. We stopped lockdown in,

because the government said, okay, we'll stop lockdown, right? You can now have Christmas, right? Whereas in China, China was the only country as an authoritarian technocratic state or however you described it, where people went out on the street and demanded an end to lockdown. However, I mean, I'm overstating that, but you know what I mean? But there were massive protests in Shanghai and in Shanghai. I'm making a...

polemical point. But I do think that there's something interesting about Chinese anger and the way that people get it done, and a resentment of the party, even though they know

that they can't do much about it. So there's a really incipient kind of tension there. As some people have said, there's a tension in this country about the fact that the government maybe doesn't pay any attention to ordinary people's concerns. They're too busy with the Westminster bubble. In China, that's like a million times more tension.

true. But in terms of the demographic issue, I mean, 850,000 fewer people this year than there was last year or two years ago, I can't remember. So there's a decline. But, you know, obviously China's premised, as has been said, on a lot of zombie activity, on a lot of labour-intensive, unnecessary activity. And in some ways, if you think, because I'm interviewing Paul Moreland tomorrow, who's written the book on demography, and we're having a conversation about this,

It is interesting to say that actually, you know, old people... It's not that, like, young people are dynamic people who are the only people who can get involved in productive activity. Older people can if they're allowed to. And also, if you...

industrialize or if you automate society, pressing a button when you're 85 years old or pressing it when you're 21 to make a car is the same deal. So actually, older people can become productive elements of society if you see them in that way. But there's a funny shift in China, which I've noticed in the last 20 years. When you see China in the past, it was this kind of filial Confucian duty that you owed a responsibility to look after your grandparents.

Even if you didn't want to, you had to take them in, you had to give them a granny flat. Whereas, you know, from 2011, young people were saying, bugger that, right? I want to have a flat on my own, let alone with my missus. And so people were now talking about how do you take care of old people outside the family? And the state provision only really kicked in in the mid-2010s.

of providing old people's homes and state care and what have you. And I think in the last couple of years, Xi Jinping has actually said that there will be more benefits, that local authorities, when they try to recover the property sector, which is that all this empty assets... Sorry, let me go back one sec.

Evergrande, as the company which went into liquidation with 300 billion pounds worth of debt, actually had 250 billion pounds worth of assets. So it sounds a lot worse than it is. But those assets are unrealized. What the Xi Jinping has now given the authorities, for local authorities to buy up or to seize a lot of those assets and then sell them on, kind of a very grandiose kind of social housing mechanism. The problem is that they're inept.

And they don't really know who their target audience is and how they're going to do it. But they're making it allowances for people to have tax relief, old people buying those flats and actually using them as kind of care home by another name. So there's a lot going on behind the scenes, but it's kind of naff, right? And it's kind of after the event.

Like somebody said to me once, you know, isn't it wonderful how Shanghai has got more metro lines than all the world put together, right? And then you think, yeah, but if they'd thought about it, right, they could have made a much better city where you didn't need all that metro connection. So it's kind of a planned society where planning is kind of really badly done.

That's what I think. Could I come back to something just very, very briefly? Because I don't think we've really answered the question about soft power or cultural authority. Yeah, I mean, we mentioned before that China doesn't have as much soft power as perhaps it really ought to have. My colleague, who is Malaysian-Chinese, tells me that actually there's a lot of it in Malaysia and people watch Chinese dramas and that sort of thing. And I think there is, in Southeast Asia, there may be more than some people might think

But I think one other interesting thing is I was in Taiwan last year looking at the big Taiwan question or whatever, and one thing that people did say to me was that they were worried that young Taiwanese were being kind of sucked in by Chinese propaganda. And that was partly a soft culture thing, and it relates also to that incredible mobile ecosystem that the Chinese have put together, which, if anything, is more sophisticated, actually, than ours.

which is also why they spend their entire lives on their phones, even more than people do here. But, yeah, soft power is weak, but there are pockets where it is growing. And another one, of course, is Chinese television in places like Africa, along with Russian television. You know, they are making inroads. As often as news channels, right? Yeah, exactly. They've spent a lot of money on it. But actually, the...

Taiwan question, I mean, they're particularly concerned about TikTok and the influence of Chinese social media. And that's really where, I guess, the influence is. It's not so much in cultural product. Because if you, I mean, if you look at South Korea's soft power, for example, you know, I mean, it's massive. And little South Korea, big China. And it's all about, you know, having a creative industry that can create rather than the pervert children. Although I wouldn't call their stuff to be creative. It's the most commercialised kind of thing.

But it's massively successful. I think it also depends on if the state recognised that as a merit, right? It wasn't clear that the state cared about the kind of thing that ByteDance and TikTok was doing until the US started being worried about it. And now it's been saying, oh, OK, this is something. But it's just, you know, you've got these kind of old leaders of the CCP being like, what is social media? Yeah.

Yeah, well, indeed. But they have, for example, another project, which is the 10,000 Village Project in Africa, where they're installing Chinese satellite television in all these villages. And you get it free for about a month. And then you have to pay for everything that's not CCTV news or CGTN news.

So, you know, there's a lot, but that's about discourse control. That's about shaping perceptions. It's not so much the attraction. It's providing, it's filling a space. You know, there's no television in a village. Chinese television arrives and, you know, telling the Chinese story well, I believe, is the expression. We had Voice of America and BBC Worldwide for an awful long time, so it's like... Yeah, but you had options. I mean, you also had, you know, everything from the Daily Telegraph to the Daily Mirror, so, you know...

I think the other point about cultural authority is, I think, patriotism, right? The patriotic education campaign of the 1990s. Of course, yes, Xi Jinping thought itself may not be very sexy or persuasive, but this broad...

broader environment of linking the Chinese Communist Party to the strength that China has now has since Tiananmen Square been a very effective campaign, I think. He's just creating future generations of Chinese who just kind of learn a certain version of history or always link the Chinese flag, which is inherently communist, with what it means to be Chinese itself.

All of these things are now coming to fruition, which I think actually that campaign has had huge success because it links the party with... If you love China, in China, if you think of yourself as a patriotic person, you wouldn't be questioning the party. That linking, I think, is something that the party has done incredibly well, notwithstanding, of course, that some young people are very critical of the party, but such a big country, so many different things. There have been times, too, when that patriotic education really amounts to...

kind of teaching hate, if you like. So I remember an occasion when sort of 20 years ago, I was teaching in a primary school in Beijing and these kids were happy kids aged 10 or 11. But there was one day when they came back in and

there was this young guy who just had this look of sheer fury on his face and he had his little fists wearing balls and I said, "What the hell is wrong with you?" And he said, "Oh, we've just been learning about Nanjing and the Japanese." And yes, it did happen. Yes, it was awful, but they were very much being taught

to feel that national pride but also to hate the enemy at that stage. It's ironic that it's a soft power conversation. If you ask a student or a young person in China, it's K-pop

they want to listen to and it's japan they want to visit jimmy so i always think it's very interesting how with such a close proximity of such terrible events that happened in china right i'm i'm always surprised that they're not more pissed off with them but generally that idea that that's seen as the kind of westernized model that they want to try to strive for and that level of kind of freedom and openness and experimentation it's also a disaster if you want to go to japan by the way i was there in the summer

And you go to Kyoto, my God, right? It's partly because Japan is cheap now and people don't have as much money in China as they did a few years ago. So they're all going to Japan instead. It's terrible. It's just, you know, you cannot move. Move for Chinese. But it's also an example of how the party's story...

just goes through these handbrake turns over time. Because I remember in Fudan University in Shanghai, noticing suddenly, to my surprise, a large banner that said, may the friendship between the Chinese and the Japanese people go from generation to generation. And I thought, oh,

And I observed to a fellow student that I was hoping that the next generation's warmth and friendship was more convincing than the previous generation. And this was regarded as unhelpful. And then come another few years, and they're being taught to hate Japan again. So pity the poor Chinese citizen, really.

Let's go to another round of audience questions and then we will have to wrap up for the session. Yeah, I'm happy for you guys to choose. Again, I'm quite happy not to have this power. Although it would be nice to, in my woke millennial phase, to have non, like a lady back.

Go on, yeah. Oh, no, no, sir, you go first. Yeah, yeah. Well, thank you very much, Cindy. Just two quick questions. The party, because we're talking about China in decline, the party, is the panel in agreement that China is a dictatorship? Question one. Question two, one of the biggest causes of potential economic decline is corruption, and that's been mentioned. What is the panel's view of corruption at the moment? Great question. Thank you very much. Yes, indeed.

Oh, sorry. You mentioned the increasing paranoia of Xi Jinping. Do you think that that will lead to an increase in the social credit system that we had in Guangcheng and maybe more systems like the ones we see in Xinjiang? Right, great question. I'm glad we've got social credit bringing up. Five minutes left. Okay, great. Yeah, let's have one more. Who did you guys choose? We've got five minutes left. Um...

I think they did raise the retirement age for women last month and it coincided with the showing of a film called Like a Rolling Stone, which is about women being undervalued over the age of 50, which I really appreciated and enjoyed, even though the English translation didn't turn up. So I think they're kind of making that adjustment, but I don't think that we can underestimate the anxiety about disengagement that Bill talked about.

One of the things that's been circulated to me by a sort of senior academic recently is a video of a guy in Beijing at a famous art school, a foreigner, giving a lecture in which he says in the middle of the lecture, there's half of you that have been spending your whole time looking at your phones and I'm leaving. And he walks out and it's being celebrated by academics all over China. I mean, there's a very profound sense that

that this generation, the middle classes, educated graduates, are disengaged and disappointed. I think that shouldn't be underestimated. Do you have a question? Yeah, what about Siberia? No, seriously, those people that are really pro-party, the bit of utopian optimism they get is about the fact that there's new points of investment in the car industry in Russia at the moment, which is a new release for Chinese capital.

Fantastic non-secretary. I loved it. Okay, can we take one question each just because I don't want to get in trouble with the guys at the back. Yeah. Well, the party says it's a dictatorship of the proletariat, so who am I to argue with the party? On Xi Jinping's paranoia, I really don't know that it will result in a kind of ramping up of social credit, but I think that the real...

that China faces, and again, it's endemic to authoritarian systems, is the succession problem. The most dangerous job under Mao's China was to be the designated number two. They just didn't survive.

And, you know, you get an authoritarian leader reluctant to designate a succession. We've only had, what, two peaceful transfers of power in the entire history of the People's Republic, if we don't count Xi Jinping, which I don't because of Bo Xilai, so it was contested.

So we've had two orderly transfers of power in a time when there were term limits and constitutional niceties of that order. Those have gone. So I think we're back in a kind of law of the jungle, which will assert itself again within, you know, what, who knows, but not many years. Tom, briefly. OK, so I won't deal with that one then. So corruption. I mean, this is a tough one.

I mean, obviously, China used to be super corrupt. When it was growing really, really fast and there was lots of opportunity, corruption often actually lubricated the Chinese economy. And it can be quite useful, actually, to a certain extent. Then, of course, we've had Xi Jinping, as Isabel mentioned before, his anti-corruption campaign, which, yes, sort of bagging tigers and swatting flies, all that stuff.

So a lot of it was a purge. It was about grabbing your enemies. But I think it was kind of real as well. China today feels a much, much less corrupt place than it used to feel. It's just much more regulated. There isn't the kind of money changing hands, at least as far as I can see, that you used to have. I used to be woken up every night. I used to live in central Beijing near the workers' stadium.

And you could guarantee, particularly at weekends, that people would race their Ferraris and Lamborghinis outside my window every night. And I'd be waking up at three in the morning if I wasn't out myself. Or children of communist leaders. Exactly right. So these were the children of communist leaders. And in fact, there was one occasion when one of these guys managed to smash his car up with two naked women in the car with him. What a legendary way to go out. It is. It's, you know, you've got to go anyway.

So there is much, much less of that. So of course there's corruption. There's corruption in every country. And at the very, very top, who knows what's going on? But I think that sort of casual corruption at the lower levels, not nearly as much as there was. People do follow the rules a lot more now than they used to. And also, not at the very, very top, but...

those sort of people, those sort of local government officials, they're not taking money and gambling into Macau anymore as they used to. That kind of corruption, I think, has kind of gone. Just quickly, I mean, I think that on that point, I think there's a lot of outsourcing of corruption.

By which I mean that the regulatory authorities, the police and what have you, are very often in the back line, not the front line, of actually targeting people who are protesting. It's normally the local hired thugs that do the hard work for people and it's very difficult to fight back against those guys because all bets are off if they want to beat the hell out of you.

Whereas the police are slightly marginalized in that conversation. But I only wanted to talk very quickly about disengagement in the university sector. As much as there's this saying, I don't think it's so prevalent now as it was maybe five years ago, the idea that in the West, Chinese students say, it's easy to get to university, but it's hard to pass. Obviously, anybody in university knows that's automatically false.

But anyway, easy to get to university in the West, but hard to pass. In China, it's really hard to get into university, but so easy to pass, right? So in terms of graduation statistics, very often any donkey can pass a graduation ceremony. In our university, we used to have a certificate of non-completion.

which means somebody who couldn't be asked to turn up, we gave them a certificate. It was in English, so they could at least take it home to their village and show their parents. I put it on the wall proudly. I failed to complete. And, you know, you might get a job out of it. So I think that there's a... I actually got one in China myself. Well, put it this way. I have a patent...

because everybody has to do patents in China as well just to get on the global stage and you know you had to tick box so I invented a stupid thing and sent it in and I got a patent for it if you want to know what it is I'll tell you later but it's kind of everybody just it's like there's a regime and you just have to play the game and then you get past like certification culture and it's it still has that level of Stalinist type bureaucracy that you can't escape from because it's

in society. It's built into the society. So that's the problem that they really have to escape in order to flourish and kind of move on to what we all want them to do, which is a dynamic, modern, soft power society. But it's not anywhere near happening soon. That's my prediction. One thing we haven't mentioned was a social credit question. I was just going to... Sorry, I've been told to shut up, but basically it's always been massively exaggerated. It's not really a thing.

No, no, no. I meant I was just going to tackle the social credit system, which is just to say I did a whole episode about how it doesn't exist. So it has been so over-reported. And actually, the whole thing is more of a cautionary tale about Western reporting than it is about Chinese surveillance, which does exist but not in a social credit scheme. So...

We just recommend you guys listen to that episode because we don't have enough time to get into it right now. But on your broader point about surveillance with Xinjiang and the rest of the country, for sure, the technology is...

trained and developed and used interchangeably. Of course Xinjiang was a particular test case because of the issues and ethnic issues there but we see more and more of those technologies coming back into the rest of China and vice versa. So facial recognition is pretty much ubiquitous in China at least in urban areas now. And surveillance since COVID in particular which digitised so much of your movement has still not really rolled back to that pre-COVID age. So I think that is just the new normal now.

I will just end with an interesting question, which is that when I was getting a foot massage with my aunt and my grandma in China, the local masseuses, the local ladies who were giving us a foot massage, were saying, you know, how creepy is it that there's facial recognition everywhere? And, you know, this was so fascinating to me because I asked, you know, they hadn't completed secondary school. They were out-of-towners. You know, I live in Nanjing. It's a relatively wealthy city. So they weren't from that city. They were internal migrants there.

And so not what you would consider educated or political at all, but they were there, ordinary Chinese people saying, this is creepy. Like, I didn't sign up for this. And I just thought that was so interesting in terms of, yes, of course, we're talking about the closing of freedom of speech in China, but a lot of these conversations do happen even now. Just kind of people reflecting on why is the country like this now? What is going on? They might not have the language for it or the platforms for it,

or the communities to talk about it, but those conversations are still happening. Anyway, we'll finish there. Thanks.